How Are Safe Havens Faring in This North Korea Fear?
The safe havens that benefit the most in times of uncertainty include gold (GLD) and U.S. Treasuries (GOVT).
Some companies benefit in times of uncertainty, and some sectors provide cover for investors.
Markets these days are concerned about geopolitical risks more than ever, given the rapid growth in globalization and the interconnections between global markets.
Wall Street indices fell lower on April 12. President Trump’s comments and prevailing geopolitical tensions weighed on US stock markets.
After starting the week on a stable note, the S&P 500 fell on Tuesday. The lower risk appetite increased the demand for safe-haven assets.
Shortly after Trump’s criticism about the costs of the F-35 program, Canadian Prime Minister Justin Trudeau stated that the country would consider the F-35 in an open competition for acquiring fighter jets.
Following Trump’s shot at the F-35 program, major suppliers in the program saw their stock prices slide.
In a derisive tweet, Trump said, “The F-35 program and cost is out of control. Billions of dollars can and will be saved on military (and other) purchases after January 20.”
Are these dislocations warnings or opportunities? Unfortunately, we won’t know until all the Brexit dust settles…
Whether investors believe it or not, presidential elections influence markets in various ways, from increased market volatility to changes in fiscal policy.
Brent crude oil (USO) prices fell ~5% to $48.41 on Friday, June 24, after the results of the Brexit referendum were announced. The concerns mostly revolved around the impact Brexit…
Stanley Black and Decker (SWK) generates around 47% of its revenues outside the United States. Further, 22% of total revenues are derived from Europe and 18% from emerging markets.
If the United Kingdom doesn’t strike a deal with EU, tariffs on industrial goods and services would range between 0% and 16%, depending on the nature of the products.
The UK (United Kingdom) exported goods and services worth 223 billion pounds to the EU (European Union) in 2015, and as the United Kingdom is a member of the EU, these exports didn’t attract any tariffs.
As Brexit became more imminent, the pound sterling plunged to its lowest level in over 30 years only to recover slightly and close 8% lower at 1.37 USD-GBP (US dollar to Great Britain pound) on June 24.
Industrial stocks took a plunge on Friday, June 24, 2016. Stanley Black & Decker (SWK), which has 35 subsidiaries in the United Kingdom, was hit hard by Brexit. SWK fell 6.8% to $107.23 on Friday.