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Stock markets usually fall before war breaks out, not afterwards

Professor Dr Bernd Meyer, Chief Investment Strategist & Head of Multi Asset
Berenberg Markets - Monitor, 28 February 2022

Stock markets usually fall before war breaks out, not afterwards

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Source: Bloomberg, Time period: 02/02/1964 – 25/02/2022

 

  • If you look at past geopolitical conflicts, stock markets usually fell before war broke out. Immediately after the escalation, markets usually rose again.
  • This is because while markets have already priced in potential damage to society and the economy beforehand, there is increasingly more clarity about the effects after the outbreak of war.
  • In the following 2 to 6 months, the S&P 500 even recorded a positive return in every case of the conflicts shown here.