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Markets feeling the ripples from Europe and earthquake

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Jeremy Hobson: There were several massive earthquakes off the coast of Indonesia today, triggering tsunami warnings across the Indian Ocean. Those warnings have been cancelled and no serious damage has been reported so far.

But let’s start there with Josh Brown of Fusion Analytics, who’s us live as always from New York. Hi Josh.

Josh Brown: Hey, how’s it going?

Hobson: Doing well. So when there’s a natural disaster like this — and this one looks like it may not be so bad — what’s an investor to do? Because obviously, we just had the tsunami in Japan a year ago, the floods in Thailand; and there were some big economic effects.

Brown: Yeah, I think if you look at Fukushima and the lingering effects of that in a lot of different markets, there definitely was an adjustment. But then there are some natural disasters that really have no impact. So I think what happens is, when pros hear that there was a natural disaster, the first thing that they try to figure out is what kind of exposure do they have — especially if there’s any kind of commodity bent to it. So I think in this case, though, we probably won’t see much of a market impact, even though it’s still something that people want to keep in mind.

Hobson: Well it seems like the markets are watching Europe more closely right now — what is going on there? We had a 200 point drop in the Dow yesterday.

Brown: I know, I thought we were done with that.

Hobson: Yeah.

Brown: Europe lives on; the problems are still very much around even though the ECB and Germany are acting more Fed-like in their approach, there are a lot more backstops and there’s a lot more liquidity in the system. But we saw Italian and Spanish bond yields above 5 percent, and that’s always vexing.

So I think the market is not so much focused on it, but it is now reacting to some extent, which it hasn’t for a while. And that’s a new development for 2012 — it’s really the first time Europe has captured our attention.

Hobson: Josh Brown of Fusion Analytics, thanks as always.

Brown: Thank you Jeremy.

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