Breakout

Wall Street Decides Syria No Longer Matters

Breakout

Though the Senate isn't set to vote on a military strike in Syria until later this week a consensus is building on Wall Street that little or nothing will happen. This apathy is supported by trading Monday when market participants all but completely ignored U.S. Secretary of State John Kerry's suggestion that Syrian President Bashar al-Assad had one week to turn over his chemical weapons if he hoped to avoid a missile strike.

Kerry quickly added that he didn't expect Assad to comply with the demand and emphasized that any strike would be an "unbelievably small, limited kind of effort." With the stakes getting ever lower attention on Wall Street has turned from Syria to taper talk with some Breaking Bad chatter thrown into the mix for good measure.

The breaking point for traders seemed to come last Friday when Russian President Vladimir vowed that his nation would provide aid to Syria in the event of a U.S. strike. Putin's comments initially took about 1% out of the market, stopping a rally dead in its tracks. Once it occurred to them that Russia already supports Syria investors quickly bought the dip, bringing the market back to even for the day. As of mid-morning Monday the S&P500 (^GSPC) had tacked on more than 20 points from the Friday morning Putin-lows.

Paul Hickey of the Bespoke Investment Group thinks there is some headline risk related to Syria but only if there's an extreme outcome. "Eventually the news is going to go to the back burner," he says in the attached clip. "Six months from now we're probably not going to even remember what happened."

At this point only a worst case scenario of the U.S. launching a strike and followed by Assad launching more chemical weapon attacks would rattle Wall Street. Barring a major shift in the thinking within the DC Beltway such an outcome seems all but impossible.

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