markets are often accused by those on
the left of being immoral the reaction
to the attacks in Paris seems to give
this the lie what some have called a
patriotic rally kicking in to lift
shares while above where they stood
before Isis killed 129 people on Friday
equity markets are showing little in the
way of patriotism in fact though if they
were their shares to buy to express
solidarity with the City of Light will
be those most exposed to an intensified
French terror threat aeropuerto Perry
and air france-klm instead markets are
doing their usual job has a moral wires
of likely outcomes both companies saw
their shares hard-hit on Monday
rebounded by less than the market today
investor's have concluded that extra
security checks and fear of further
attacks somewhat reduces the prospects
for French tourism particularly by air
the European hotel and holiday stocks
have also been hurt particularly Frances
Akal the amoral processes of the market
have on the other hand pushed up the
price of defense companies demand for
heavy weapons to bombard the isis-held
parts of Syria will surely rise but so
too will other aspects of defense even
the supposedly cash-strapped UK
government already digging deep to find
two billion pounds for extra equipment
for the SAS and the resources to hire
another 1,900 spies French defence and
aerospace company tallies was picked
immediately as an obvious winner can see
that up at the top here with both drones
and cybersecurity featuring among its
products though as well as the division
of the Spoils nesters also need to
consider the possible overall effect on
the economy the attacks have already
sparked political backlash across Europe
and even bizarrely among Republicans in
the US or obviously relevant though the
insistence by President Hollande that
the need for extra spending on state
security Trump's European austerity
demands sort of a liberal Keynesian
stimulus overall though the market
reaction has been relatively subdued you
can see some of that there were these
sharp drops in
reporter Perry that's the red line and
in Air France the green line relative to
the overall market that's the French
market here in blue and you can see
whilst they were quite big drops on the
day they're really not particularly out
of line with the sorts of things that
we've seen earlier this year and in fact
far less important than what had been
going on in the broader market we can
compare hear what happened after the sep
tember the 11th attacks in 2001 when US
airlines plunge by a third that's the
airline sector there an SP 500 airlines
the blue line shows S&P 500 as a whole
and Northrop Grumman there jumped by a
third I picked out just as a sample
defense stock but it was one among many
to benefit now this isn't about markets
putting a different value on French
versus American lives that were after
all more than 20 times as many
casualties in 2001 market does of course
put much higher value on both French and
American lives compared to Syrian lives
where as many people has died in Paris
die pretty much every day unnoticed by
investors they don't spend much and so
really don't matter to global stock hot
stock market but really the smaller
reaction in Europe than in the u.s.
reflects the fact that what happened
doesn't appear to be a major turning
point unlike 2001 France and its
European allies may spend a little more
on defense and they may pummel Isis
controlled areas of Syria a little
harder european central bank might be
somewhat more willing to ease monetary
policy again at next month's meeting
while a specifics of friday night's
tragic attacks was shocking more terror
attacks in Europe were widely expected
none almost certainly be more to come to
for all the spending by governments for
the moment investors are betting that
Parisians and the rest of the continent
will carry on with our lives and
there'll be little lasting effect on
most companies costs revenues or profits
now this might of course turn out not to
be correct but it's a moral not immoral