Firstly, our thoughts are with the victims of the Brussels attacks and their families at this sad time. It’s not easy to sit down at your desk at 7am to be greeted by the word ‘explosions.’ Neither is it long since last year’s terror attacks in Paris. We were somewhat surprised back then when stock markets reacted largely indifferently – a little short term volatility and then onwards with the preceding trend. Today was no exception.  But this isn’t aiming to be a distasteful piece about ‘the marvellous opportunities you’ll find terrorism bringing out of the woodwork.’ It’s not about ‘buying the airlines on the dip.’ It’s about what the market can tell us about how people feel, often before anyone else can.

The thing about watching the market is that it gives one a pretty good perch from which to watch people. It’s not perfect but it’s never more than the click of a mouse away. One can almost instantly see whether people are feeling greedy, fearful, manic or in a state of panic. Even viewing a chart of the UK 100 with a 15-min time delay on Google can give insight into how people are feeling hours before you’ll read it in the paper (or on Google!).

The way stock markets digested the Paris attacks last year and Brussels attacks this morning was both sombre and defiant in equal measure.  Sombre because the lack of big market downturns, things that happen when markets are surprised, is a signal that markets are not surprised. If the markets aren’t surprised, that indicates market participants aren’t surprised. While a good few of those are now robots that feel no emotion, the vast majority are still regular human beings.

It’s a sombre sign that these events are becoming an expected part of life in the west. Indeed, let’s not forget that while terrorism and unspeakable violence are a major part of everyday life in parts of the Middle East and Africa, you’ll seldom hear anyone mention that as a driver for, say, the oil price these days. We’re either de-sensitised to it or simply (perhaps blissfully) unaware, which is sad.

But the markets’ reaction to the Brussels attacks and other more recent terrorist atrocities also signals defiance, since in the face of an ideology that seeks to return the world to the dark ages we continue to go about our lives. Thousands of people still crowd onto public transport in the major capital cities, get on aeroplanes, go to concerts, work in skyscrapers, make goods, offer services and make purchases – just a few of the things that define life not only here in the west, but in far more violent places too.

Sorry, Daesh, but this won’t change. Brussels will not forget about this tragedy but it will dust itself off just as Paris, London, Madrid and New York all have – just as people in Baghdad, Kabul and Damascus do every day. It’s hard to imagine but the economic treadmill will continue to turn. The world will continue to turn away from the dark ages, just as it has been since the 14^th Century.

All this from a simple price chart.

Augustin Eden, Research Analyst (22 March)