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Markets will always react to geo-political events says Sharewise chief
By Leon Gettler, Talking Business >>
THE MARKETS have been reacting to, and will continue to respond, to geopolitical events. Everything from the invasion of Ukraine to the Gaza war to the outcome of the US presidential election in November.
Alex Perry, the managing director of stock investment company Sharewise, said investors were always adjusting to these new realities.
He said when Russia invaded Ukraine in 2020, the US S&P Index fell by 35 percent in the first month. It was quite significant. 
“Generally when a war happens, you get a contraction of global GDP by at least 1-2 percent because what happens is people don’t have the confidence to keep spending or the confidence to keep trading or to keep investing because they’ve de-risked which is only natural,” Mr Perry told Talking Business.
“It there’s a fire you get out of the house, if there’s smoke you get out of the house and it’s basically what we saw during the Ukraine war, which is still going mind you.
“But if you have look now, which is four years afterwards, we’re effectively at all-time highs again ion the S&P and we’re at all-time highs in the Australian markets.”
Markets accommodate conflict
People had more or less acclimatised to the war in Ukraine. Was the response different to Gaza?
“I think the Ukraine invasion was seen geopolitically as more of a risk to global markets than the Gaza war,” Mr Perry said.
For example, the price of oil had been rallying, with Hamas being open to the proposal from the US for a ceasefire.
He said the market was now responding to the prospect of a (former US President) Donald Trump victory in November.
“Like or hate Trump, he’s certainly a polarising character,” Mr Perry said.
“I think Wall Street loves Trump because Trump loves business and Trump loves the stock market.
“He likes using the stock market as a litmus test of his presidency. He’s pro-business, pro-stock market. He’s said he’s pro-Bitcoin and pro-cryptocurrency.
“So Wall Street, traders and stockbrokers are very bullish for a potential Trump victory with less company tax and a rallying market.”
Trade war risk?
While there was concern about Trump re-enacting the trade wars with China, US President Joe Biden was doing the same thing, by imposing tariffs on China as well.
“Trump put them in and while the Democrats like to hate everything that Trump did, they’ve continued a lot of the things that Trump had in place and there’s a continuation there,” he said.
“For instance, the blocking of TikTok in the US market. So all of those things are continuing with those geo-political tensions with China.”
Mr Perry said the stock market had also gone up under the Biden regime after Biden came into the presidency just as the economy was recovering from the Covid lockdown. This saw confidence increasing in the whole global economy.
How would the stock market respond to a Biden victory?
“Let’s not forget, the great thing about politicians is they can paint a very positive picture,” Mr Perry said.
“Nobody knows, I’m guessing, but a Biden victory will be seen as positive as well. [This interview was conducted just prior to President Biden bowing out of the 2024 US Presidential race in favour of Vice President Kamala Harris}.
“Because what the United States wants, and everyone else wants, is a continuation of good times.” 
Hear the complete interview and catch up with other topical business news on Leon Gettler’s Talking Business podcast, released every Friday at www.acast.com/talkingbusiness
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