The AP Twitter hack created panic on Wall Street. We can look back to the LinkedIn breach and learn that security events can move markets in unexpected ways. As the media reported, all of the major stock indexes experienced a miniature flash crash. We can see this in the S&P and NASDAQ futures. According to Bloomberg, $136 billion in value was set on fire.
The reaction in other markets did not receive as much coverage, but were very interesting. The 30 year Treasury and the Japanese Yen had a near opposite reaction. This is very much like the buy it on a breach behavior that we saw with LinkedIn. Is it surprising Treasuries and the Japanese Yen turn out to be the place to go if something were to happen to The White House and the President and what does that say about the herd mentality? If we view the President as the CEO of the country, it seems a little strange to be buying the “stock” of a company that is in need of a new CEO. Perhaps the market is simply bullish on Joe Biden.