Markets have a tendency to be influenced in different degrees. A person who has a sprained ankle is much more susceptible to an additional sprain situation than a completely healthy ankle. Similarly, the chronic or perhaps terminal health of the bond markets has raised rates. This is a contagion that will eventually spread to stocks. The stock market is vulnerable and will be affected by the degree of anxiety that influences will create.
The Syrian crisis has reached prominence in a very short time frame. This is similar to another ankle sprain to an already stretched ligament weakened appendage. There is chronic pain with the Federal Reserve chief uncertainty that can become permanent injury to the ankle the longer the pain is present.
President Obama has an almost no-win situation with this Syrian crisis. His quick announcement that military action was the absolute course of action, has left him no exit door. Congress is not his puppet and this is evident. A fracking in our Federal government process sends a resounding scare not just in our country but throughout the world. Has the U.S. been called on their bluff? Intimidation has been the status of the U.S. military might for decades. Has this intimidation factor now the called bluff?
Russia has the U.S. in a compromised position. It is not the U.S. versus Syria. It is the U.S. creating uncertainty to allies and adversaries alike. The stock market will not like this cloud. The Federal Reserve is trying to pump the stock market but that institution has uncertainty within its ranks as candidates jockey for aligning with or being the new Fed chief. My greatest concern is that the Syria crisis will take the focus that is needed in the Fed chief selection thus diminishing the emphasis on criteria and judgment on this important appointment.
Reality takes time to become ingrained in a stock market. The heaviness of factors that appear to magnify concerns and thus uncertainty tend to turn a sprain into permanent disability. Our stock market refuses to use crutches thus irritating and escalating pain. A wheel chair is next as the ageing process of this bull market becomes clearly evident.
The bonds sprained the stock market. The Syrian crisis may put our market in a wheelchair with Russia pushing the conveyance. Putin would like a cliff for that wheelchair.