Market Watch: What Will Paris Attacks Mean to Markets?


Following the horrific terrorist attacks in Paris, U.S. markets advanced in all three major indices in the first session since Friday’s barbaric actions at six different locations in the French capitol.  Generally in the first week following an international terrorist act, markets experience a substantial dip.  For example:  following the Beirut bombing of 10/23/83 stocks dropped 1.6%, and after the bombing of the USS Cole on 10/12/2000, stocks fell 1.7%.  Stocks in the defense industry saw big gains today while oil prices rose as well.

In the aftermath of the terrorist bombings in Paris, IG France analyst Alexandre Baradez told CNBC:

“Stocks that are angled towards consumer goods or tourism, notably the luxury industry with the Christmas season, could be affected. These attacks were aiming at an entire population. There may also be a purely psychological effect that pushes investors to stay on the sidelines until more clarity emerges.”

See more on how the global markets have reacted historically after an international act of terrorism here at CNBC.

According to analyst Peter Boockvar, chief market analyst at The Lindsey Group:

“People are on edge. People don’t want to panic”

Meanwhile, many experts say that the terror attacks on Paris are not likely to dissuade the Federal Open Market Committee from raising interest rates when they meet next month, unless the terror strikes lead to more volatility in the markets and financial conditions deteriorate significantly. Investors are watching to see if France, which bombed dozens of ISIS targets yesterday, asks all of NATO to step up military efforts.  Investors are also awaiting the release the Federal Reserve meeting minutes on Wednesday.

Here are the numbers from Monday, 11/16/15 on Wall Street:

Dow Jones Industrial Average: 17, 483.o1 (+237.77/ +1.38%)

NASDAQ: 4,984.62 (+56.73 / +1.15%)

S&P 500: 2,053.19 (+30.15/ +1.49%)


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