r/stocksMar 9, 04:17 PM
The WAR Report: High Volatility During the Wars in Afghanistan and Iraq
This is just a couple of the most volatile dates from the past two wars we got into with Afghanistan and Iraq. Only days with – or + 2% volatility on the SPY are pulled.
tl;dr: Watch those headlines when you're trading
October 10, 2001 Wednesday
DOW +2.1%, S&P + 2.3%, NASDAQ, +3.6%.
The first day with real movement related to war was 10/10/2000. At this point, the US had been striking Afghanistan for the past three days. Apparently, ''people are starting to get some level of comfort with the way we're handling it,'' said Stephen J. Massocca. It helped that the week before, Bush had proposed around $100 billion in emergency stimulus and spending related to the 9/11 attacks, and the market had been greatly depressed before it.
October 29, 2001 Monday
DOW -2.9%, S&P -2.4%, NASDAQ -3.9%
Just a few weeks later, there didn’t seem to be an end in sight for the conflict in Afghanistan. Concerns that it would be longer than expected and inhibit the recovery of the economy (still suffering from the dotcom fiasco). Of special note here is Boeing losing one of the largest military contracts in history (at the time), which dropped the company’s shares by -10.4%. The news headlines of the prior weekend had also been grisly, anthrax scares, rumors of additional conflict in Iraq, and nothing good coming out of Afghanistan. Consumer confidence and unemployment reports were scheduled later in the week, none of which were expected to be rosy.
Afghanistan got resolved pretty quickly and doesn’t seem to have caused too much trouble, Iraq on the other hand…
November 11, 2002 Monday
DOW -2.1%, S&P -2.1%, NASDAQ -3%
About a year after Iraq war rumors started circulating and the US economy being freshly out of the dotcom bubble crash, markets dived on 11/11 with news that American troops were likely to be deployed against Iraq. The Pentagon had just approved plans for an invasion of around 250,000 soldiers, if the United Nations should fail in the arms inspection efforts. Iraq and Saddam Hussein had until Friday to eliminate any weapons of mass destruction and open up their arms sites to inspectors. Considering WMDs were never found, he probably should have done it. No other major news was there to distract traders and the prior month had seen a rally so a sell off here seemed appropriate.
January 24, 2003 Friday
DOW -2.9%, S&P -2.9%, NASDAQ -3.3%
War with Iraq was now becoming imminent, the dollar sank about 1% against the euro, down 8.3% since December. Gold hit a six year high of $368. The problem didn’t seem to be war, but rather that the international coalition that the U.S. had hoped to build against Iraq was crumbling, many of it’s allies did not seem keen on getting involved. ''It's not the going to war. The problem is that we don't have the support of many other countries.'' Profit estimates getting slashed by a variety of companies like Microsoft, Intel, AT&T, and IBM helped the pessimistic atmosphere that day as well.
January 30, 2003 Thu