This bull market won't be stopped. As tragic and worrying as the big geo-political crises in the Ukraine and Gaza may be, they have failed to rattle Wall Street.

There was an initial sell-off on Thursday (US time) as news of MH17 broke but normal service has quickly resumed in the US.

For all the shocking drama unfolding around the world, all it took was some better than expected results from Google to flick the switch and bring the buyers back.

The S&P 500 and Dow Jones surged up 1 per cent Friday, regaining most of the ground lost the day before. History will record that US markets ended the second week of July 2014 in the black.


At first glance it seems callous. How can Wall Street be so insular, so unaware of the wider risks that the events of the last few days may provoke?

What this illustrates is the extreme power of market sentiment. A few years ago, when investors were still fragile and bearish and economic recovery was a distant hope, events like these would have sent global markets into a tailspin.

Now, it seems, all eyes are on the recovery prize. Global events are a distraction to be shrugged off. There are implications for the aviation sector but those are manageable.

Energy? Gas supply to Western Europe isn't an issue for US consumers. Oil prices are already spiking on Middle Eastern turmoil but the US has reserves at record levels.

It is hard to make a case that global conflict is inherently bad for the US economy if you consider the two biggest wars of the 20th century.

A new Cold War with Russia? Politically difficult, sure, but economically? When the last one was at its height the US economy was unstoppable in its growth.

A Chinese property crash and financial crisis might be a bigger concern but it is not one tied directly to any of last week's events.

It is easy to underestimate the scale and power of America's domestic economy when it really hits its straps. Momentum is growing around a US economic recovery. Slow and lumbering it may be, but when it starts rolling it takes a lot of stopping. Strong earnings reports from US companies last week are the latest evidence of that.

According to Bloomberg nearly 80 per cent of the 77 S&P 500 companies that have reported so far beat market expectations. A further 140 will report this week including big names like Netflix, McDonald's, Boeing, Apple and Microsoft.

Meanwhile, merger and acquisition activity, led by the 20th Century Fox play for Time Warner, is also underpinning market strength. There's been more than US$1 trillion ($1.15 trillion) worth of deals announced so far this year.

Certainly commentators have identified a bubble risk in US markets. If Wall Street loses touch with the reality of the domestic recovery in the US there could be problems. Markets do come crashing down, but only when investors lose faith in the fundamentals underpinning growth.

That's not happening yet. Right now America remains optimistic. And American optimism is one of the most powerful forces modern history has seen.