United States stock indexes on Tuesday, closed lower. Shares of airlines, cruise companies, and travel booking sites fell after the bombings in Belgium. The news of the attacks pulled the market as a whole lower for much of the morning, the market rose a little bit in the afternoon, and then lowered later. Overall, trading has been relatively light signaling the upcoming Easter holiday as well as signaling that traders were not as rattled by the potential market implications of the attack in Belgium. The major European stock markets declined early on Tuesday, but ultimately closed higher. For example, in Belgium- the BEL 20 index rose 0.2 %.
It is interesting that the stock markets in the United States and Europe do not immediately reflect the panic that has set in both nations. While the shares declined, the market seems relatively stable considering the situation at hand. Only time will tell, whether that is here to stay.
NY Times, The Associated Press
Wow, I'm pretty shocked that in Belgium, the BEL 20 index actually rose.... Apparently investors think that these attacks will have minimum effect on the performance of the companies. I would bet that airlines are especially worried about these attacks, since two of the bombs were at an airport. I wouldn't be surprised if airlines begin pleading for more security measures to be enacted, so that their customers can feel safer.
ReplyDeleteRelative to other Easter weeks from years prior I'm curious as to how different sales will be. Though what is a bit strange is how sales decreased for cruises fell as they are ultimately unrelated, besides the only relation being that they are both travel.
ReplyDeleteWe talked situations like this in class today. For example, after 9/11 stocks in the US dropped. Hopefully, for Belgium, stocks will not drop too far and they will not have to deal with a recession, and hopefully this will not have too much of an effect on the US economy.
ReplyDeleteThe ministers of Belgium have offered to resign after intense criticism regarding the attacks and security worries. Shares I think will continue to fall as instability continues with leadership roles changing hands.
ReplyDeleteI think that these kind of shocks really reflect how strong an economy is and goes to show the importance of economic resilience. For example, if the situation wasn't handled as well as it was by the Belgium government, it is possible that markets and other airlines would've panicked much more than they did. This would impede economic growth, so it really goes to show how important strong institutions are to react to events like this are.
ReplyDeleteFirms have gotten better in their responses. From identifying personnel, to clearing offices or sanctioning remote working, even at recovery sites, they manage to contain the disruption. The people have shown a willingness to get back to life as usual as soon as they can, whether it be shopping, boarding a train or having a meal. And governments learn to put in place security measures they hope will deter more attacks.
ReplyDeleteTerrorist attacks and other extreme events such as this one typically affect stock prices. People get scared and pull out of their investments due to the uncertainty of what's to come. We recently discussed this in class with how 9/11 affected the economy.
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