Key Takeaways
\nPresident Trump’s renewed calls for the U.S. to take control of Greenland have fired up a fresh round of investor concern about the effect trade and geopolitical affairs could have on their portfolios.One measure: The VIX, Wall Street’s “Fear Gauge,” climbed this morning above 20 for the first time since November, a move into a territory suggesting concern but shy of outright panic.<\/p>\n
A period of relative calm in markets looks to have ended. What did it? It’s an oversimplification, but Greenland is at its core.\n<\/p>\n
President Donald Trump has stepped up his language\u2014and actions\u2014in pursuit of ownership of the North Atlantic land mass, injecting fresh uncertainty into both geopolitics and trade. Market measures of fear have moved higher, contributing to a substantial decline for major U.S. stock indexes<\/a> Tuesday on the back of a downbeat finish to last week<\/a> and ahead of a planned speech by Trump<\/a> on Wednesday at the World Economic Forum in Davos, Switzerland.<\/p>\n The VIX<\/a>, Wall Street’s so-called fear gauge, is above 20 for the first time since November, a move into a territory suggesting concern though shy of panic. CNN’s investor Fear & Greed Index is just on the bearish side of its midpoint, an essentially neutral level; a week ago it pointed toward greed. CoinMarketCap’s crypto-specific<\/a> Fear & Greed measure, meanwhile, has slipped to the low end of a neutral score.\n<\/p>\n Why This Matters to Investors<\/p>\n Wall Street worries haven’t reached panic levels, though several measures of sentiment have moved in that direction lately\u2014and trading this week is off to a rocky start. In addition to earnings season and the future of the Fed, investors are now wondering about affairs involving the U.S. and Greenland\u2014and, more broadly, how they might affect trade and geopolitics.<\/p>\n \u201cThere are people that are worried about what the president\u2019s gonna say tomorrow, when he comes\u2014 vis-a-vis Greenland,” Carlyle Group Co-Chairman David Rubenstein told CNBC today. “A lot of business people are saying ‘Look, we\u2019re happy to negotiate on Greenland, we\u2019re happy to do many things,’ but they\u2019re not sure that\u2019s the best policy.\u201d\n<\/p>\n The latest action highlights other signals of caution from investors. A Deutsche Bank survey of investor positioning from late last week showed a move away from tech and toward cyclical assets. Google data today showed increased searches for information on widely held market exchange-traded funds such as SPY<\/a>, which tracks the S&P 500, as well as on defensive assets like gold and silver, which are trading at record highs<\/a>.\n<\/p>\n