N. Korea Said It Test-fired Hwasong-18 ICBM On Monday
Portfolio Pulse from Charles Gross
North Korea reportedly conducted a test-firing of its Hwasong-18 intercontinental ballistic missile (ICBM) on Monday, according to Yonhap news agency. The test is part of North Korea's ongoing missile development program and has implications for regional security dynamics.
December 18, 2023 | 10:22 pm
News sentiment analysis
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NEGATIVE IMPACT
The test-firing of North Korea's Hwasong-18 ICBM may increase geopolitical tensions in the region, potentially affecting investor sentiment towards Japanese markets.
The missile test by North Korea may escalate regional tensions, which historically can lead to increased volatility in nearby markets, including Japan. As EWJ tracks the Japanese market, it could face negative sentiment in the short term due to proximity and political ties.
CONFIDENCE 70
IMPORTANCE 50
RELEVANCE 60
NEGATIVE IMPACT
South Korea's proximity to North Korea and the latter's missile tests could lead to heightened security concerns, potentially affecting the South Korean market and assets like EWY.
Given South Korea's direct involvement with North Korea, any military actions by the North, such as missile tests, can have a significant impact on South Korean market sentiment and thus on EWY, which tracks the South Korean market.
CONFIDENCE 75
IMPORTANCE 70
RELEVANCE 80
NEUTRAL IMPACT
While the North Korean missile test may affect global market sentiment, the direct impact on SPY, which tracks the S&P 500, is likely to be minimal due to its broad diversification and distance from the Korean Peninsula.
SPY, as a diversified representation of the US stock market, is less likely to be directly affected by geopolitical events in East Asia. However, global market sentiment can be influenced by such events, which could indirectly affect SPY.
CONFIDENCE 80
IMPORTANCE 20
RELEVANCE 30