STOCK INDEX FUTURES, TRADE WARS AND INTEREST RATES
From when the recession lows for stock index futures were made on 9 March 2009, there have been a variety of geopolitical events that have temporarily interrupted the advance.
I stress the word temporary because every time traders and analysts have has been rescued by central bank accommodation. The recoveries were often swift with new highs not far behind.
In fact, since the lows were made over nine years ago, there has been a multitude of geopolitical issues, which pressured stock index futures. Many of them appeared insurmountable at the time with little hope of being resolved any time soon and were feared to have catastrophic consequences for the stock market and the economy. In the early stages of the bull market for stock index futures, there were times that these negatives came in faster than some central banks could ease credit conditions, including the European Central Bank, the People’s Bank of China and the Bank of Japan, and faster than the Federal Reserve and the Bank of England could talk back their hawkish rhetoric.
In hindsight, there was no need to worry about the adverse market Russian sanctions, Chinese economic slowdown fears, China’s currency devaluation, the oil market collapse, the Brexit vote, ongoing tensions on the Korean peninsula and ramped-up political turmoil in Washington. Every time stock index futures fell due to the bearish geopolitical recovered and ultimately made new highs.
14 | ADMISI - The Ghost In The Machine | March/April 2018
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