When the civil war kicked off, most stocks only moved a percentage point or two in the cotton markets.
Edit:
That there is no lack of hotheads who assert that there is here a clear
casus belli in the event of the country’s not obtaining complete satisfaction,
need scarcely be mentioned: nevertheless, the more moderate will hold the
field and people will await the decision of the Crown lawyers and the government with composure. On the Stock Exchange, consols had rapidly fallen one per cent with the arrival of the news from Southampton; at closing, however, they had somewhat recovered again. In the City, as on all sides, firm confidence is placed in
the self-possession and energy of Lord Palmerston. There is no lack of
rumors of the worst sort, in particular that the American government had
foreseen a quarrel with England; that in anticipation of this it had already
bought up the entire saltpeter supply (60,000 cwt.) during the past week,
and that Lord Palmerston, because he had exact knowledge of the American
Cabinet’s intentions, had dispatched troops to Canada and warships to the
American stations in good time.
So not cotton specifically, but the consol (I'm guessing similar to an index fund) fell 1% before recovering immediately after the Trent affair.
Because no formal declaration had been made after the Trent affair, and the English textile industry had always worked off warehouse stock for cotton so some people thought the crown was going to declare war, and sold (driving down the stock), but the people in the know expected that any formal declaration of war would be held off at least for a year in hopes that the blockade would be lifted in time for the cotton crop for the next year to be shipped on time.
Over time the markets did in fact shift very heavily, but it's still telling that even a civil war in the United States had less of an immediate effect on the stock prices than this.
When the civil war kicked off, most stocks only moved a percentage point or two in the cotton markets.
Edit:
So not cotton specifically, but the consol (I'm guessing similar to an index fund) fell 1% before recovering immediately after the Trent affair.
Why?
I'm mystified as to why a civil war would have that little effect.
Financialization makes everything fucky
Market anarchy baby, it doesn’t have to make sense
Because no formal declaration had been made after the Trent affair, and the English textile industry had always worked off warehouse stock for cotton so some people thought the crown was going to declare war, and sold (driving down the stock), but the people in the know expected that any formal declaration of war would be held off at least for a year in hopes that the blockade would be lifted in time for the cotton crop for the next year to be shipped on time.
Over time the markets did in fact shift very heavily, but it's still telling that even a civil war in the United States had less of an immediate effect on the stock prices than this.