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Stocks are set to finish the week in the red as the alleged chemical attack by President Assad against his own people could end in a US-led invasion of the troubled state. David Cameron’s call to arms was dismissed by most members of parliament last night; however when it comes to war traders tend to fear for the worst, and just because the UK isn’t getting involved is not to say there won’t be a western invasion. Rather than run the risk, investors are taking their money out of the equity markets until political tensions lighten.
Across the pond the the Dow is down 40 points at 14,800 as traders hold their breath regarding Syria, as the US government rallies troops at home and abroad in case a military invasion is required. The situation in the Middle Eastern nation won’t be resolved anytime soon and while uncertainty looms traders will not be keen to go long. Strong GDP figures from yesterday and positive consumer confidence numbers today have triggered tapering fears.
Oil and gold are lower today as traders have taken their profits from recent gains, after US Light Crude hit a two-year high on Wednesday as dealers feared supply lines would be restricted. Oil is still up on the week despite losing ground in the past two trading sessions.
The US dollar is benefiting from its safe haven status as uncertainty surrounding Syria has led traders to the quality investment. On the other hand encouraging economic updates from the US could mean the US Federal Reserve will initiate tapering sooner rather than later.