WAR IN THE MIDDLE EAST IS IMMINENT - WHAT WILL BE THE EFFECT ON ASSET PRICES

 

6 October 2024

Here is Joseph Wang including geopolitics in his markets weekly report (and seems to be taking sides for the point of view of the investor, though he does say he's saddened by these developments in the Middle East).

The main point he is making is that Israel sees this as a generational opportunity and the window will likely be closed by the next presidential election. So if they're going to do anything they will do it now. "Now" means in the next couple of weeks!

Markets weekly 4 October 2024

But he doesn't actually go into what might be the effects of an all-out war between Israel backed by America, and Iran, on asset prices.

So in summary, here's what analysts, reading from previous wars, are saying we could expect:

1. Short-term sharp decline due to global uncertainty and market fear.

2. Oil price spike leading to higher costs, inflation, and pressure on corporate profits.

3. Sector-specific effects: Energy stocks may rise, while tech, consumer, and industrial sectors could face declines.

4. Safe-haven assets such as gold and US Treasuries would likely see inflows, while equities would experience outflows.

5. Long-term recovery possible, but dependent on the length and scale of the conflict and its impact on global trade and energy supplies.