Possible scenario
Coercive Blockade Rehearsal
25% Chance
China uses the militia presence east of Taiwan to practice elements of a quarantine or blockade from multiple directions. The activity remains below the threshold of open war but meaningfully raises the perceived risk to shipping, aviation, and Taiwan-linked semiconductor supply chains.
Initial impacts
- Riskier companies' borrowing costs Up
- Market volatility Up
- 10-year Treasury yield Down
- Oil prices Up
- US dollar Up
Secondary impacts
- Technology -3.4%
Portfolio impact
S&P 500-2.2%
Each figure is the modeled move of the S&P 500 if the outcome occurs. For information only. Not investment advice.
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