In the latest developments in the Korean peninsula, in a statement carried by the state owned Korean Central News Agency, the North Korean army said it is seriously considering striking Guam - Guam is a US territory in the Pacific. The threat comes after a sharp warning from President Donald Trump where he said Pyongyang (capital of North Korea) will be met with fire, fury, and frankly, power, the likes of which this world has never seen before.
In an interview to CNBC-TV18, Geoff Lewis, Global Strategist-Capital Markets Group at Manulife AMC and Michael Every, Head of Markets Research for Asia-Pacific at Rabobank assessed the impact of this news on the markets.
Below is the verbatim transcript of the interview:
Latha: What would you assessment be. Do you think this will all be more talk and it is going to subside?
Lewis: Assuming both sides are rational, I think this is just rhetoric. It might encourage China to put a bit more pressure on North Korea. We haven't seen a big selloff in markets because of geopolitical risk so far this year. The improving economics of the global expansion has won out of politics. If we did see a sharp selloff then that would be a buying opportunity but we are not seeing that sort of opportunity at the moment. Presumably this will blow over. It's not clear what Donald Trump can do. Hopefully calm will prevail.
Latha: Is there any market that looks attractive to you now?
Every: If we look at the background of geopolitical risks and central bank pricing, there is not a single market that looks attractive to me. But if we look at the fact that nothing matters anymore, everything looks attractive to me. So it depends on how you want to play, whether you are prepared to just ignore everything and keep buying because the trend is your friend till the end.For entire interview, watch accompanying video...