Markets tumble on heightened tensions

• Increased tensions push stock markets lower
• Travel stocks hit on geopolitical concerns
• US GDP revised higher

Turkey’s downing of a Russian fighter has raised the spectre of further global tensions in an already inflamed trouble spot. While both nations retire to work out their next move – which in Turkey’s case involves calling an extraordinary meeting of NATO – investors are left wondering what the ramifications will be. We have seen oil prices spike again today as markets factor in a greater level of disruption to supplies, while major airline and travel names are under pressure once more. After a shaky start to the week, stock markets are coming under pressure yet again, and while a Thanksgiving rally is still a possibility, at present broader geopolitical concerns seem to be trumping confidence in US consumer spending. Luxury firms have been the target of selling of late, and Burberry is the latest victim, helped along by negative commentary from a number of banks. Slowing Chinese tourism and spending continues to be a major driver, leaving the share price at risk of further falls.

US growth was revised upwards for the third quarter, although the news was not entirely unexpected. For those convinced that a December rate increase is on its way, the data merely acts as confirmation, while those that think the Fed will hold fire can point to weaker consumer spending. Disappointing US consumer confidence figures will add weight to the latter thesis, but overall the decision still looks like a close call. For now however, equities remain out of favour.