NEW YORK (CNN/Money) - Bombs keep falling, shots keep ringing. The briefings from Central Command and the Pentagon continue. On the front pages of newspapers it's still war, war, war.
The war is over.
No, the generals aren't saying that, nor are the reporters, the people with the White House or even the talking heads. But traders have begun to believe that it's done with. Watching it now is sort of like watching the end of Saturday's match-up between Kansas and Marquette -- you did it, but with Kansas up 30 points, you damn well knew who was going to win.
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And so the news out of Iraq isn't quite affecting the market like before. In Iraq Tuesday morning the United States again launched an attack targeted directly at Saddam Hussein. There's no way of knowing, but he may very well have perished in it. But markets around the world largely shrugged that news off -- sure it was positive, but as far as Wall Street is concerned, it's time to move on.
"The news in general was still favorable, but the focus is on what's next," said Brown Brothers Harriman senior foreign exchange economist Nick Bennenbroek. "People aren't only looking at the progress in the war in Iraq, they're starting to think about what's going to come after."
Those are thoughts that raise fresh concerns and may mean that the market is due for a pause, at the least.
Nobody knows what postwar Iraq is going to look like, whether it evolves into a fresh force for democracy, as the Bush administration believes it will, or descends into bitter factionalism. And then of course, everyone will want to have a say in how things are set up. Look for more fights at the United Nations, and more reports of internecine battles within the Bush administration.
And then what of the rest of the Middle East? What sort of rancor toward the United States is brewing in the Arab world, and is there any way to defuse it? Has the war in Iraq diminished the terrorist threat, or raised it?
Finally, there is the economy, which is in absolutely sorry shape. Was its most recent bout of weakness all about the war, and will the end of war resuscitate it? Or are we sliding back into recession? Monday Merrill Lynch chief North American economist David Rosenberg warned that "once the focus shifts from Baghdad to the domestic economic backdrop, investors could be in for a rude awakening."
All of these concerns may be resolved positively, of course, meaning the market's rally may only have begun. But for now the watchword is uncertainty, and investors are holding their breath.
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