Investors are Calm and Confident Despite Trade Wars and Historic Political Meetings

June 12, 2018
799 Views

All the political drama has surprisingly had little impact on investors confidence. In fact, most markets are up, and that’s good news whether you are a short stock trader, a long-term dividends investor, or even if you are part of a mutual fund or any diversified investment product.

There has been monumental change on the political landscape in the past month. New tariffs have been imposed on the European Union, Canada, and Mexico, and President Trump has become the first sitting president to meet a North Korean leader.

For the political observer, these stories would have seemed extremely unlikely just two years ago. For financial analysts, this type of political drama can sometimes be a threat to stability.

Are Investors Ignoring the Supposed Trade War?

The headlines in recent weeks have been dominated by trade tariffs and the threat of a full-scale trade war between the U.S. and key allies. Canada, the European Union, and Mexico have all vowed to hit the United States with tariffs to retaliate for the Aluminum and Steel tariffs that Trump introduced earlier this year.

Make no mistake, tariffs from these countries will hurt some industries, particularly in areas of agriculture and food processing. However, investors just don’t seem overly worried. Some analysts believe that the average investor has been desensitized to trade headlines, because of how drawn out the tariff saga has been this year.

Regardless of the reason, investors maintaining confidence is good news if you also hold stocks.

U.S. and North Korea Meeting Won’t Have an Immediate Impact on Finance

There is plenty of long term financial potential in peace or at least a relaxed relationship with North Korea. With denuclearization and a dropping of trade sanctions, North Korea could open to U.S. investment, and markets around the Korean Peninsula would benefit from increased trade.

Both leaders signed a document pledging to work towards denuclearization and hold negotiations in the future.

However, those benefits are a long way off, if they even eventuate. For now, the high-profile meeting between the two leaders is doing nothing to impact investor confidence.

How the Markets Look Today

The U.S. markets are healthy this morning, with all major indexes posting positive numbers after Monday’s trading. The Dow is up 0.02% ahead of market opening, the S&P 500 is up 0.11%, and the NASDAQ is up 0.19%.

Despite some worries about trade, things are good in the U.S. this month. Investor confidence is stable, and we are a long way away from the period of frightening volatility that hit the stock market earlier this year. You can afford to take a breath, because at least for today, the stock market is healthy, and indexes are trending up.

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