The horrible attacks orchestrated and carried out by ISIS in Paris on Friday night shook not just the French Capital, but people around the free world. And as the world’s financial markets continued to function after having the weekend to digest the news, there was quite an amount of concern that the markets would be as unsettled as many people were by the attacks.
But it didn’t quite turn out that way. Certainly not in the stock market.
A few things did go as would be expected. With the war with ISIS now physically entering Europe, the Euro had a fairly bad day, dropping about 1% versus the US Dollar. The EURUSD was sitting at about 1.069 as of the time of writing, the first time it fell below 1.07 since April 2015, renewing speculation of Euro-Dollar parity being not too far away.
Shares of companies involved in travel and tourism – from online booking outfits such as Priceline Group Inc (NASDAQ:PCLN) (-3%) and Expedia Inc (NASDAQ:EXPE) (-3%) to airlines such as Delta Air Lines, Inc. (NYSE:DAL) (-3%) – had a bad day.
There was some tightening of commodity markets, which very much dislike uncertainty, especially the political kind involving in any way the Middle East. Gold popped about 1% early in the day, but had settled in to be mainly unchanged. Same for oil, but in the reverse order (first down to near $40/bbl for US crude futures, then back up).
However the overall stock market is, somewhat surprisingly, performing very well in the first trading day following Friday night’s attacks. The UK’s FTSE 100 closed Monday up 0.5%, France’s CAC 40 opened down 1% but recovered to be essentially flat on the day (down marginally 0.08%), and benchmark US equity indices are up nearly 1% as of the time of writing.
This morning’s call by many market strategists for a fall in equities following Friday’s very upsetting events in Paris was quickly forgotten once trading started. Ironically, traders started buying stocks in the belief that there was now less of a chance for the US Fed to raise interest rates as planned in its December meeting, possibly pushing off a rate hike into 2016.
Markets can indeed be very unpredictable.