Geopolitical tensions are heating up globally, but it isn’t clear whether investors need to react, with stock markets not paying the conflicts much attention so far.
“You can be forgiven for thinking that the world is a pretty terrible place right now,” Michael Cembalest, global head of investment strategy at JPMorgan Asset Management said in a recent note, citing everything from Russia-Ukraine tensions, the Gaza conflict, civil wars in Syria, Afghanistan, Iraq and Somalia, insurgencies in Nigeria and Mali, and even the long-running North Korea rumblings.
“Strange as it might seem, such conflicts are not affecting the world’s largest equity markets very much,” he noted, adding that’s “nothing new.”
Currently, war zone countries have a small global footprint, representing just 0.7 percent of global equity market capitalization, 0.4 percent of portfolio investment flows and 0.8 percent of corporate profits, offset only by their 9.0 percent share of global oil production, Cembalest noted.
via CNBC 
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