The U.S.-led war against Iraq has altered the short-term view of many industries that appeared to have been in limbo before the start of military action, said Brian Bruce, head of equity investments at PanAgora Asset Management. Now portfolio managers might consider travel and tourism stocks that they would have avoided previously. Also, portfolio managers may be forced to reduce energy exposure if oil prices decline.
An increase in crude oil prices could, however, improve the performance of Treasury inflation-indexed bonds, said Gemma A. Wright, director of market research at Barclays Capital.
Still, the war has diminished the appeal of Treasury securities as a safe haven, says Luke D. Knecht, managing director at Deerfield Capital Management. "The uncertainty that had driven bonds to 50-year lows has reversed itself, he said. Nonetheless, Mr. Knecht does not expect interest rates to rise significantly in the short term because the economy is still weak.
From a domestic travel standpoint, Mr. Bruce said its business as usual despite the war. "You cant put off your plans, said Mr. Bruce, whos hopping a plane next week on business. "We could be in this mode for weeks.
In San Francisco today, anti-war protesters blocked streets in the Financial District starting at 7 a.m., forcing many to head for work on foot. "The protests made it difficult for everyone in the financial community to get to work ... Some of our people couldnt get in ... or they were delayed getting here, said Tom Taggart, director-communications at Barclays Global Investors.
However, protests failed to disrupt business at nearby Seneca Capital Management, where staffers routinely start at 4 a.m., said Gail Seneca, CIO and managing partner.