US indexes dropped back severely Thursday after a Malaysia Airlines jet crashed near the Ukraine-Russia border. Oil gained more than 2,5%, VIX and Gold rallied as typical in these situations. Investors turned to risk off mode and opened big volume of short positions. The beginning of the trade was promising, the day started well, all indices jumped in green territory at opening of the session, but upon the news from Ukraine the market turned into red and SP500 suffered its biggest daily drop since 10 April. On DJIA mostly the airline stocks hit and the benchmark index did its biggest drop since May 15. On the contrary which is a bit surprising the Russian Stock Index gained with 1,42%.
- SP500 -1,18%
- DJIA - 1,41%
- Nasdaq -1,4%
There is a massive geopolitical risk in the interpretation of investors. Now the fear is about some kinds of escalation of war.
Now seems the DAX and CAC40 are consolidating after the opening bell this morning and might rebound today a bit. We don’t know yet on the long term horizon what this event mean, we have to follow for 1-2 days and if the market won’t drop further that would be a meaning of the long trend continuing.
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The BFM Assets Team.
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