Markets will not flatter us by mirroring our views of a war (“this war is smart/dumb, so markets will go up/down!”). Even if our analysis of the war is correct, markets are not good at looking far into the future, which is the timeframe in which wars’ effects play out. And in the short term, I’ve never seen any evidence that markets are particularly good at discounting geopolitical risk. Most importantly, financial markets do not reflect the world economy: they contemplate the solvency of nations and the profitability of companies, but only some nations and some companies, and only relative to embedded expectations, not in absolute terms.