Summer has brought as a great novelty the events that are unfolding in North Korea. Because in effect the warlike movements that are affecting this Asian country and the United States are being reflected, and in what way, in the equity markets around the world. To the point of turning last week into worst of the year for all international places. Not surprisingly, operators are following with special attention everything that is happening in this part of the planet. Because the declarations of both governments lead to more concern about what could really happen in this geographical area.
When tranquility was the common denominator this summer in the financial markets, a factor impromptu that has North Korea as its reference point. This is the main fact that stock markets around the world have collapsed with great intensity. Where a good part of the investors have directed their savings towards the main refuge values to try to protect their monetary positions. In an unusual scenario in recent years. In any case, it will be a fact that will mark the evolution of the stock market during this month of August. And maybe for a longer time depending on the evolution of events.
This is a scenario that few analysts counted on, but it is affecting the positions of small and medium investors. In a period in which many of them are on vacation. A fact that is very important because it is still generating more volatility in the stock price. To the point that it can make them lose a lot of money in their portfolios. It is not surprising that the most savvy savers have taken advantage of these pre-war movements to structure their investments. In this way, adjust them to the new scenario that has just been presented these days.
North Korea: price adjustment
There are also a good number of financial analysts who estimate that what is happening in North Korea is a pretext that have taken the financial markets to correct the prices of the main financial assets. As has happened in other events with similar characteristics and that have developed through more modern history. Whether or not this is the case, the truth is that it has had a direct reflection on stock markets around the world. Where it will be very important what can happen during the next seven days. You may need to sell your positions if the positions of North Korea and the United States sharpen.
One of the bags hardest hit by this event is the Spanish one. It has lost almost 4% in the week, with values that have collapsed on the Madrid floor. Its evolution has been much worse than other indexes of special relevance in the old continent. Where the losses generated by this uncertainty are around an average of 2% per week. Specifically, the Ibex 35 has lost support at levels of 10.500 points to finally reach very close to 10.200 points. And it may even be to see if the facts get worse from now on.
Securities and sectors most affected
Not all sectors and stocks have reacted in the same way to the events that have been unfolding these days in North Korea. Banks have been one of the main victims. With depreciation of around 5%, being one of the segments most sensitive to these events. Also listed companies that are linked to raw materials have done worse than the rest. As for example in the Spanish case, with the heavy losses suffered by the shares of Acerinox and Arcelor Mitall. Leading the declines in Spanish equities and with perspectives to continue depreciating in the next trading sessions.
Tourism values are another of the great harmed by this unpredictable diplomatic crisis between North Korea and the United States. Both in regard to airlines, hotel accommodations or reservation agencies, among some of the most relevant. In this case, their shares have fallen in financial markets above the average, with percentages greater than 3%. These are the sectors in which investors should not be under any circumstances. Because the risks they have are enormous and that can cause depreciations to be even more acute from these precious moments.
Sectors that benefit
On the contrary, there are other series of stock market sectors that can benefit from this very worrying scenario for all. One of them is companies linked to national defense and armament. In any case, they are segments that have very little presence in the national stock market indices. Quite the opposite of what happens in the United States stock market, where its presence is very relevant. For this reason, it has not been surprising that these companies have been the ones that have best come out of this difficult week for small and medium investors.
As is customary in these situations, food companies have also appreciated at minimum levels during these days. Not surprisingly, they act as refuge values in scenarios as worrying as the one we are experiencing. It is the case of DAY in the Spanish stock market that during the week its shares have appreciated around 0,50% and in contrast to the large losses of other trading partners in the selective index of Spanish equities. With one of the most stable evolutions that the financial markets have given us.
What are the refuge values?
However, these events also generate real business opportunities. Because in effect, some financial assets are increasing operations also in the most unfavorable scenarios. As in the specific case of gold who has seen how in these days their positions have risen with a great verticality. You cannot forget that it is one of the refuge values par excellence in any of the scenarios that may be generated. Another that meets these requirements are products that target sovereign debt. With important appreciations during this week and with excellent prospects if the conflict with North Korea continues or even worsens.
Within the Forex market there are also opportunities to improve investors' bottom line. For example, in the Swiss franc that has appreciated against its main competitors in the financial markets: the euro, the dollar or the pound sterling. In any case, you must be very fast in your operations because any slippage can mean that you leave a lot of euros in some of these financial markets. You can even formalize these movements through investment funds that are based on any of these proposals. Even combining them with other financial assets to reduce risks.
Tips for these days
The events that take place in North Korea can help you change your investment strategy from now on. Through the following lines of action that we expose you below.
- Look for equity sectors that have a better behavior than the rest. It will be one of the best ways to weather this war storm that can unfold in Asia.
- It will be the best time for you to restructure, not only your investment portfolio, but also in other kinds of financial products. As for example, in exchange-traded funds, warrants or credit sales.
- You do not have to make decisions hot, but it will be better check the evolution of these events in the next few days. So yes, you will have to make a very radical decision about all your investments.
- Although the stock market crashes down, there are other financial assets that can benefit from this new scenario. To the point that you can make profitable operations more successfully than before. A clear example of this trend is the price of yellow gold.
- It will be very important that define the term of stay of your investments. Because in effect, it will not be the same if they are destined for the short, where you will have to make a decision. Or if it is long-term, where it will not affect the performance of any of your operations so much.
- Don't expose yourself to the most aggressive sectors of equities. Because it is in them where you can lose more money in open positions. The best thing you can do is refrain from opening positions in any of these values. You will already have better opportunities to be interested in these proposals.
- Another alternative goes through close all positions in the financial markets. So that in this way you can enjoy your last days of this summer vacation with greater peace of mind. So that you make your decisions when you return when the intentions that can be made in North Korea are clearer.