Do you think the market's initial reaction to crises is often overblown?

Question

Do you believe that the stark imagery and urgent headlines lead to exaggerated market reactions?  Have you noticed any changes in your trading strategies based on these initial market responses?

Jade Tynan · Accepted Answer

Hi @Zabeeh Afaque

Yes, stark imagery and urgent headlines absolutely influence initial market reactions in my opinion. However what we’ve seen time and again is that those first moves rarely reflect the full story. Markets often panic at first, only to correct once fundamentals reassert themselves. The Russia-Ukraine invasion showed how headline risk fades fast when actual supply disruptions don’t materialize as initially being reported or thought of.

I was once told - don’t trade the footage, trade the fundamentals.

Kira · Accepted Answer

While my current role doesn't involve direct market exposure, I still draw from my experience as a price reporter/editor. During the peak of the EDF outages, combined with the war in Ukraine and widespread droughts across Europe, electricity and natgas prices were hitting record highs daily (!). Despite fundamentals suggesting relatively stable supply and subdued demand, the market responded with extreme volatility - often driven by headlines rather than facts. Sentiment and perception can dramatically outweigh fundamentals!