Goldman Flows Guru Warns Relatively Calm Index Belies 'Fragile' Market With 'Poor Tolerance For Bad News'

The market reaction to the Middle East headlines so far has been fairly consistent with how equities historically trade around geopolitical shocks.

Since 1950, during seven major spikes in the Geopolitical Risk Index, the S&P 500 has fallen roughly 4% on average in the first week, but has typically recovered back to pre-shock levels within the following month.