20 July 2014
The Malaysian airliner that was shot down over eastern Ukraine drew the world’s attention to the horrible killing of 295 people on board. Available evidence suggests that pro-Russian militants have accidently shot down the plane. This may lead to further and more hardened US and European sanctions on Russia. The highlighted tensions in Ukraine rippled through airline stocks around the world with Malaysian Airline System falling hard, -11.0%, following the disappearance of another of the airline’s aircraft. Air NZ fell 3.7% in sympathy and is now down 6.3% July month to date. Neither the Malaysian jet downing nor the geo-political issues with Israel’s launch of a ground offensive into Gaza were really able to dent the advance of equities in the US for long. European stocks fell on concerns surrounding these conflicts. In the US however, earnings releases from a number of household names like Google and Honeywell pushed the markets higher. Google rose over 4% on Friday after announcing its third quarter numbers which were ahead of analysts’ expectations. US bond prices fell with the yield on the benchmark 10-year Treasury note rising to 2.4%.