GEOPOLITICAL events & market movements
How have markets historically reacted to geopolitical crisis events, including wars and terrorist attacks? We look back at two dozen or so such events going back to World War II in the table below:
While the total drawdown related to this tragic event and recovery timetable are unknown, based on prior geopolitical events, the average drawdown is -4.7%, while the average time to reach market bottom is 19 days, and the average time to fully recover losses is 42 days. In other words, equities have historically held up well during geopolitical shocks, including wars and other military conflicts going back decades, with the average recovery taking roughly two months. Even the market recovery from 9/11 took only 31 days.
credit card debt in prospective
Headlines on the rise in credit card debt may sound concerning. It's always best to put these figures in context. As shown in chart below, the orange line (total credit card debt) in isolation looks concerning. Add in the blue line (credit card debt as percent of disposable income), Americans have far less credit card debt per unit of current income than anytime prior to COVID. A solid reminder to always take news headlines, designed to garner attention and "clicks", should be taken with a grain of salt.
Links to What Else We're Reading
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