The Paris Attacks and the French Economy

When something like the recent Paris attacks happens, there’s no way that global markets will not be impacted. The negative impact that markets experience, though, should not be a major ordeal. The past has shown us that these types of dips in the market do not last forever. In fact, they don’t last long at all. You can expect many markets to drop in price, but then over the next week, rise back to where they would have been pre-terrorist attack. Unfortunately, this is not the first act of terrorism that’s occurred, and time after time, the drop occurs followed by normal activities.

As a trader, it might seem wrong to try and take advantage of something like this, but it does create opportunity. And, by putting money into a market after prices have declined, you are actually doing a good thing by helping French businesses resume their normal activity. For example, as investors panic because of the attack and withdraw their money from stocks, you can be one of the smarter traders and buy when markets start to go down. That money will help companies to begin the process of restoring their stock prices back to normal. It also helps regulate the economy during this crisis by putting money in even though others are taking their money out. Binary options traders have the same opportunity, although their money does not go directly into the market and it doesn’t impact prices. And because binaries do not have an influence on stock (or any other asset) prices, you can use them guilt free to profit off of any declining prices, too.

Paris has announced that the French stock exchanges will be open as usual Monday morning. Although many businesses were shut down over the weekend, those that were not immediately impacted in the violence should be back to normal Monday morning as well. Still, it does need to be acknowledged that these attacks will have a psychological effect. Having explosions rock a city is a scary thing, and it’s quite normal to see money leave the marketplace as a result. An analyst from IG France has commented that the stocks most likely to be impacted are those that cater to consumer trades and tourism, especially those that focus on the luxury side of things. Even these should see business bounce back up once the damage is repaired.

There’s no easy way to tell how long the residual negative effects will last, but it shouldn’t be more than a couple weeks. With the Christmas boom about to occur, it’s not likely that the French economy will see much long standing ill done to it. It’s certainly a scary event, but the good news is that France will have the economic ability to move forward and beyond this. If the terrorists were hoping for a different result than this, then they will be sorely disappointed. Even though France does see a lot of international tourism—it accounts for more than 7 percent of the country’s gross domestic product—there are plenty of opportunities for the economy to make up this money in other places, especially if consumer goods are able to bounce back faster than expected thanks to the holidays. Plus, France does have the biggest tourist economy in the world, and that means that there’s a smaller chance that the economy will be impacted as heavily as a country that doesn’t see a huge number of tourists come in every day. It’s a big chunk of their economy, but because of the demand that Paris, the “City of Love” has, France will overcome this catastrophe economically speaking.