Geopolitical Event Tanks the Stock Market

By: PhilStockWorld

Courtesy of Doug Short. The apparent missile attack that brought down a Malaysian Airlines passenger jet with 295 passengers and crew also tanked today’s markets. The Eurozone’s Stoxx 50 fell 1.41%. The US markets also closed in the deep red with the S&P 500 down 1.18%, fractionally off its 1.31% intraday low about 15 minutes before the final bell. A CNBC afternoon news item puts takes a glass-half-full perspective with in a piece entitled “Market reaction to Malaysia jet crash could be short-lived“.

Today’s 1.18% decline was the biggest drop since the 2.09% plunge on April 10th.

The yield on the 10-year note ended the day at 2.47%, 8 bps below the previous close. It is now only 3 bps above its interim closing low of May 28th.

Here is a chart of the last five sessions. The index is up 5.94% year-to-date and 1.38% off its record close on July 3rd.

Here is a daily chart of the index. Volume was 27% above its 50-day moving average, but slightly below the 31% above yesterday.

For a longer-term perspective, here is a pair of charts based on daily closes starting with the all-time high prior to the Great Recession.

- Phil

www.philstockworld.com

Philip R. Davis is a founder of Phil's Stock World (www.philstockworld.com), a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders. Mr. Davis is a serial entrepreneur, having founded software company Accu-Title, a real estate title insurance software solution, and is also the President of the Delphi Consulting Corp., an M&A consulting firm that helps large and small companies obtain funding and close deals. He was also the founder of Accu-Search, a property data corporation that was sold to DataTrace in 2004 and Personality Plus, a precursor to eHarmony.com. Phil was a former editor of a UMass/Amherst humor magazine and it shows in his writing -- which is filled with colorful commentary along with very specific ideas on stock option purchases (Phil rarely holds actual stocks). Visit: Phil's Stock World (www.philstockworld.com)

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