Will political risks still matter for markets?

(Aug 28): Financial markets have been twisting and turning in reaction to political developments in recent times. Just in the past week, the perception of growing disarray in the Trump administration and tensions in the Korean peninsula caused markets to gyrate. Last year, it was Brexit and Trump’s shock election victory. However, an interesting pattern has been evident: While a political shock initially causes huge market moves, these reactions dissipate and a few weeks or months later, it is almost as if not much has happened.