Maybe they’re just tired. Stock markets have been a little jittery lately with worries about a trade war between the U.S. and China. And the political chaos currently rocking the United Kingdom is usually the type of political instability that scares investors. But somehow despite that, the last few days have seen a relatively stable market.
The last couple of weeks haven’t been nearly as placid. With escalating rhetoric on the sides of both of the U.S.-China trade dispute, stock markets dropped as investors feared it could get worse. Recent tariffs that the countries have slapped on each other haven’t helped either. The tariffs are making business more difficult for a number of industries, including any that use steel (which are a lot) and many agricultural industries as well. Investors take that into account when deciding which companies are strong enough to invest in.
Brexit, as the UK’s exit from the European Union has been known, is not going smoothly. Parliament rejected the prime minister’s plan for the divorce and no clear route has appeared to take its place. Political instability usually translates into economic instability which is often first manifested in markets. But in this case, the markets seem to have taken a wait and see approach, as the only measure that has seemed to be showing the strain is the value of the British currency, the pound.
Investors are generally not known for a zen attitude toward current events, so the present stability is surprising. And it probably shouldn’t be taken for granted moving forward.
