The Stock Market Could Get Ugly – Syria and U.S. Debt Limit
Early in the week global stock markets, including the U.S., reacted very negatively to the potential or even imminent U.S. military response to the Syrian government’s reported use of chemical weapons against its own people. From time to time, U.S. or global politics have short-term impacts on the markets due to the adverse economic effects that such conflicts may cause. Coupled with the uncertainties of how the conflict may escalate, markets go down as investors seek to avoid short-term risks.
Syria presents a complex problem due to intertwined political relationships. If the U.S. acts with a punishing military action, what will Russia, which supports the unpopular Syrian government, do? How might other Middle East players get involved? Can Israel stay out of the fray? Will oil prices spike and stay high? How much can another conflict in the Middle East hurt America?
All of these questions raise the anxiety level for all markets…
And looming for October? The debt ceiling battle between the Democrats and the Republicans could become a real doozy! And all of this going into historically the worst season for stocks makes for “edge of your seat” times ahead.
The important thing is to stay calm and look for buying opportunities at lower prices. Heed the wisdom of Warren Buffet, who advised that smart investors should be buying when others are panicking.
Today is Warren Buffet’s birthday! Happy 83rd, Warren…May you have 83 more!