Global stocks jump as analysts say widespread protests in the US will have 'little to no effect' on markets
Investor optimism has been fueled by economic reopening and a decline in new coronavirus cases in recent weeks, butProtests started last week afterwhile in police custody in Minneapolis. Floyd became unresponsive when a police officer knelt on his neck for more than eight minutes last Monday.
The large majority of protests have been peaceful, but many US cities have now seen civil unrest, with the destruction of property, violence, and looting in some places. On Monday night,While analysts think it odd to see a rise in stocks when the president has threatened to mobilize the military, they say investors are shrugging off widespread unrest and geopolitical risks because of unprecedented ongoing support from central banks. Zach Abraham, chief investment officer at Bulwark Capital Management, told Markets Insider that the US protests will have"little to no effect" on equities. He pointed to US markets being at all-time highs despite mounting economic issues of record unemployment and an ongoing recession. Moreover, the protests could"possibly be considered bullish as they would only serve to increase federal spending and government intervention," Abraham said.GOLDMAN SACHS: Buy these 25 beaten-down stocks all poised to jump more than 18% from current levels Jeoff Hall, managing economist at Refinitiv, said he believes violence, the destruction of property, and the looting of stores, will have an economic impact on the private and public sectors, and specifically on insurance companies, but shouldn't impact markets too much. "Other than insurance and possibly reinsurance, the protests themselves should not directly impact financial markets," he said. "Insurance should cover most if not all property losses, including theft of merchandise and damage to structures," Hall said. "These would come at a time where state and local balance sheets are already in poor shape due to COVID-19 responses, higher payments to unemployment insurance and lower tax receipts from individuals and corporations."
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