Asia-Pacific markets opened higher on Monday. They also closed higher on Friday. This counts as causation now.
Investors assessed renewed Middle East hostilities the same way they assess everything else. They didn't. Some guy in Singapore glanced at a Bloomberg terminal while his coffee was brewing and decided the Nikkei looked pretty. A fund manager in Sydney saw green numbers and bought more green numbers. This is what passes for geopolitical analysis in 2024.
The Middle East could be hosting its annual "let's see how many ways we can f*ck up oil supply chains" festival and these markets would still open higher if Friday's close was green. Correlation equals causation equals my bonus check clears in December.
Renewed hostilities is a phrase financial journalists use when they can't remember which countries are shooting at each other this week. It means something happened somewhere and we're pretending it matters to the Hang Seng. It doesn't. The Hang Seng moves because algorithms detected other algorithms moving and nobody wants to be the last robot holding cash.
Retail traders will read this headline and think they've discovered actionable intelligence. They'll open their Robinhood apps and buy three shares of an ETF that tracks Asian small-caps because they saw the word higher. By Wednesday they'll be posting on Reddit about how geopolitical instability is actually bullish if you squint hard enough and ignore your account balance.
The markets opened broadly higher. Broadly means we're not going to name specific indices because that would require effort. Higher means up. Up means the line went the direction that makes people happy until it goes the other direction and makes them sad.
None of this has anything to do with the Middle East. The markets would've opened higher if the headline was "Investors Assess Renewed Competitive Eating Championships."
Photo by Emin Huric on Unsplash
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