Is the Stock Market too Complacent about Iran?

After briefly falling after a United States drone attack killed Iran Republican Guard Major General Qaseem Soleimani, the stock market quickly regained its footing. It was as if nothing really important happened. My guess is that investors should not be lulled into a false sense of security as an inevitable counter strike from Iran will soon be coming. It will be then that we will know whether or not the current complacency is justified. Unfortunately the Mar-a-Lago generals are not the best ones to give us even a modicum degree of confidence.

I would also like to note a lesson from history. After the assassination in Sarajevo of Austrian Archduke Francis Ferdinand on June 28, 1914, there was little reaction on the London stock market for three weeks. To investors then it was just another day in the Balkans where three wars were recently fought. It was only in the fourth week that investors began to realize that a general European war was imminent. Thus investors should not take all that much comfort from the current benign reaction in the stock market to the justified killing of Soleimani. It might not be just another day in the middle-east.