Osama Bin Laden is Killed by US Special Forces – US Stock Market Surge Expected

Finally, Osama Bin Laden was caught and killed by US Forces

A few months short of the 10-year anniversary of 9/11, its author, Osama bin Laden has been killed by US forces in Pakistan.  The news was announced by President Obama last night at about midnight ET.  He said that bin Laden was killed by US Special Forces 150 miles north of Islamabad in Pakistan.

Cheering crowds gathered immediately outside the White House and every news outlet immediately began carrying the story.

President Obama said there was a firefight, after which US forces took possession of Bin Laden’s body. The President declared, “Justice has been done.”  He added that Bin Laden’s death marked the most significant achievement in struggle against al-Qaeda.  He paid tribute to intelligence officials – but he also said there’s still more to be done.

The President’s mood was somber, seeking to avoid being triumphalist, perhaps for good reason.  Bin Laden’s death is significant, but hardly denotes an end to the Al Qaeda and allied organizations.  However, there is no denying the achievement that this represents for the Obama administration.

President Obama Announces Bin Laden's Death

According to a senior defense official, U.S. Navy Seals were involved in mission that killed Osama bin Laden. In addition, all US consular locations worldwide have been placed on alert following bin Laden’s death.

There is likely to be a positive reaction from the world financial markets when they open on Monday.  Our own analysts expect a surge in stock prices from the announcement.

While the death of the mastermind of 9/11 hardly affects the market’s fundamentals directly, there may be indirect effects on US financials if it ultimately affects the war in Afghanistan and US relationships in the Middle East.

There will also likely be indirect effects if the death affects the President’s prospects in 2012 (quite likely) and perhaps strengthens his popularity and consequently his hand in budget negotiations with Republicans.  It is too early to tell, but the next few weeks will see this play out.