How Crises Impact Markets
Our friends at Stock Trader’s Almanac sent along this table, noting how past terror events have generated different market reactions.
STA: "When the market was in decline or weak, the terror attack merely seemed to accelerate the process. But with the Bali bombing, after the 2002 bottom, the market shrugged off the horrific event and never lost ground."
How Crises Impact Markets (Based on Dow Industrials)
|Date||Crisis||1-Day Change||1-Month Change||Subseq. Low Change||Days to Bottom||Days to Recover||1-Year Change|
|12/7/41||Pearl Harbor Attack||-3.5%||-3.0%||-8.8%||16||335||12.0%|
|6/25/50||N Korea Invades S Korea||-4.7%||-7.8%||-12.0%||18||81||28.8%|
|10/15/62||Cuban Missile Crisis||-0.1%||6.7%||-5.4%||8||16||33.8%|
|11/22/63||Pres Kennedy Shot||-2.9%||3.5%||-2.9%||1||4||25.0%|
|10/19/73||Arab Oil Embargo||-0.3%||-10.5%||-18.2%||47||4||-25.5%|
|8/2/90||Iraq Invades Kuwait||-1.2%||-9.9%||-18.4%||70||193||26.2%|
|9/11/01||Terrorists Attack USA||-7.1%||-3.8%||-14.3%||10||59||-3.0%|
|10/12/02||Terrorists Attack Bali||0.3%||6.5%||N/A||N/A||1||32.9%|
|3/11/04||Terrorists Attack Madrid||-1.6%||2.1%||-1.9%||4||6||6.4%|
|7/7/05||Terrorists Attack London||0.3%||?||?||?||?||?|
Thanks for the chart, Jeff.
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