When studying the impact of war on asset prices, six wars with international influence were selected from near to far, including the Syrian civil war, the Libyan war, the Iraq war, the Afghan war, the Kosovo war and the Gulf War. Considering that the current potential war has the characteristics of regionality, asymmetry and short duration of fierce combat, the control sample dates back to the Gulf War in 1990, while the protracted comprehensive wars such as Vietnam War, Korean War and two world wars were not included in the study.
The window period for resumption of trading is from 6 months before the formal war to 12 months after the formal war. On the one hand, the civil war in Syria, the war in Iraq and the war in Afghanistan lasted for several to 20 years, but their fierce fighting time was short, and their main military objectives had been completed within a few months, followed by a long-term low-intensity security war. On the other hand, the fierce fighting time of previous wars is generally short, so more attention is paid to the impact of key nodes on asset prices.
Considering that the impact of the war is comprehensive and extensive, we choose four categories of assets: Stocks (US stocks, Hong Kong stocks, a shares), US dollars, gold and bulk commodities (crude oil, industrial metals, Shenzhen Agricultural Products Group Co.Ltd(000061) ), and take the main asset indexes and international trading varieties as indicators.
The following core conclusions are obtained:
Conclusion 1 (equity): the long-term does not change the bull and bear of the stock market, but the short-term impact on the key nodes.
1) from the perspective of different equity markets, the closer the relationship between the country and the war, the greater the impact. US stocks > Hong Kong stocks > A shares. The United States directly or indirectly participated in six wars, with the greatest impact; The impact on Hong Kong stocks is more transmitted through US stocks. For example, during the Gulf War and Afghanistan war, it was clearly observed that Hong Kong stocks followed US stocks out of the U-shaped market; A shares have little relevance. Only during the Kosovo war, NATO bombed the Chinese Embassy, A-Shares fell briefly.
2) for US stocks, the deeper the US war, the greater the reflection of US stocks; At the same time, the impact on US stocks is not a single direction. The Gulf War was the most obvious and had the longest impact on US stocks; At the same time, U.S. stocks showed a U-shaped market during the Gulf War, which fell at the initial stage. When the war situation tended to the United States, U.S. stocks rebounded.
3) the impact of the war on US stocks is not just a single direction of decline. When the war situation tends to the United States, US stocks rebound. For example, US stocks have a U-shaped market during the Gulf War.
Conclusion 2 (USD): the USD was not affected for a long time due to the rise of risk aversion before the war. Before the war officially started, international capital often bought the US dollar under the influence of risk aversion, which will lead to the rise of the US dollar index on the eve of the war. Only in the Gulf war stage, when the United States was deeply involved, the trend of the dollar was slightly different, falling first and then rising, showing a U-shaped trend.
Conclusion 3 (gold): the pre war risk aversion pushed up the gold price in the short term, the situation was clear, and the gold price fell. In the brewing stage before the war, gold prices generally rose due to risk aversion; However, when the events that determine the short-term war situation occurred in previous wars, the situation became clear, and the gold price weakened accordingly.
Conclusion 4 (commodity): it has the most significant impact on oil, and as a safe haven commodity, oil is similar to gold in the impact of war. In the brewing stage, the price rose and fell after the situation became clear, maintaining the previous trend in the long-term dimension.
Risk tips:
There are some errors in the definition of the time of war. The changes of asset prices during the war are also affected by the macro and market environment.
