The election year has begun with the economy facing a new stress which is the threat of the escalations of tensions with Iran.
The stocks of the oil had reached stabilization in the night however the market of 2019 and its rally have been stalled and will remain so until it is becoming clear that how and when the retaliation will take place from Iran. The bond yields are presently below the levels of 2% which signals that the existence of fear is still there.
The analysts of Wall Street have been gaming the scenarios out which are ranging from a quick and short military response to the cyber-attacks and the harassment to the Persian Gulf along with the terror attacks which may be conducted by the proxies.
History has shown that the terrorists which are unexpected and the military conflicts which range from Cuba, Pearl Harbor and even the 9/11 usually cause a major response in the marker and then comes consolidation which is followed by the recovery. The veteran of Wall Street, Sam Stocall has been charting the reactions of the market to these shocks and finding that in the course of time, the markets are likely to recover unless there is a shock which ends up bringing a major global recession.
He has said that this decline may prompt more buying rather than bailing. The only question though is the time it is going to take. The stocks saw a recovery from the lows of Monday on this very theory but the prices of gas and oil would be hampering the economy of Trump in the year when elections are going to happen.