Latest news with #B_Riley_Wealth
Al Arabiya
2 days ago
- Business
- Al Arabiya
Middle East tensions put investors on alert, weighing worst-case scenarios
Investors are mulling a host of different market scenarios should the US deepen its involvement in the Middle East conflict, with the potential for ripple effects if energy prices skyrocket. They have honed in on the evolving situation between Israel and Iran, which have exchanged missile strikes, and are closely monitoring whether the US decides to join Israel in its bombing campaign. Potential scenarios could send inflation higher, dampening consumer confidence and lessening the chance of near-term interest rate cuts. This would likely cause an initial selloff in equities and possible safe-haven bid for the dollar. While US crude prices have climbed some 10 percent over the past week, the S&P 500 has been little changed as of yet, following an initial drop when Israel launched its attacks. However, if attacks were to take out Iranian oil supply, 'that's when the market is going to sit up and take notice,' said Art Hogan, chief market strategist at B Riley Wealth. 'If you get disruption to supply of oil product on the global marketplace, that is not reflected in today's WTI price and that is where things get negative,' Hogan said. The White House said on Thursday President Donald Trump would decide on US involvement in the conflict in the next two weeks. Analysts at Oxford Economics modeled three scenarios, ranging from a de-escalation in the conflict, a complete shutdown in Iranian production, and a closure of the Strait of Hormuz, 'each with increasingly large impacts on global oil prices,' the firm said in a note. In the most severe case, global oil prices jump to around $130 per barrel, driving US inflation near 6 percent by the end of this year, Oxford said in the note. 'Although the price shock inevitably dampens consumer spending because of the hit to real incomes, the scale of the rise in inflation and concerns about the potential for second-round inflation effects likely ruin any chance of rate cuts in the US this year,' Oxford said in the note. Oil impact The biggest market impact from the escalating conflict has been restricted to oil, with oil prices soaring on worries that the Iran-Israel conflict could disrupt supplies. Brent crude futures have risen as much as 18 percent since June 10, hitting a near 5-month high of $79.04 on Thursday. The accompanying rise in investors' expectations for further near-term volatility in oil prices has outpaced the rise in volatility expectations for other major asset classes, including stocks and bonds. But other asset classes, including stocks, could still feel the knock-on effects of higher oil prices, especially if there is a larger surge in oil prices if the worst market fears of supply disruptions come true, analysts said. 'Geopolitical tensions have been mostly ignored by equities, but they are being factored into oil,' Citigroup analysts wrote in a note. 'To us, the key for equities from here will come from energy commodity pricing,' they said. Stocks unperturbed US stocks have so far weathered rising Middle East tensions with little sign of panic. A more direct US involvement in the conflict could, however, spook markets, investors said. Financial markets may be in for an initial selloff if the US military attacks Iran, with economists warning that a dramatic rise in oil prices could damage a global economy already strained by Trump's tariffs. Still, any pullback in equities might be fleeting, history suggests. During past prominent instances of Middle East tensions coming to a boil, including the 2003 Iraq invasion and the 2019 attacks on Saudi oil facilities, stocks initially languished but soon recovered to trade higher in the months ahead. On average, the S&P 500 slipped 0.3 percent in the three weeks following the start of conflict, but was 2.3 percent higher on average two months following the conflict, according to data from Wedbush Securities and CapIQ Pro. Dollar woes An escalation in the conflict could have mixed implications for the US dollar, which has tumbled this year amid worries over diminished US exceptionalism. In the event of US direct engagement in the Iran-Israel War, the dollar could initially benefit from a safety bid, analysts said. 'Traders are likely to worry more about the implicit erosion of the terms of trade for Europe, the UK, and Japan, rather than the economic shock to the US, a major oil producer,' Thierry Wizman, Global FX & Rates Strategist at Macquarie Group, said in a note. But longer-term, the prospect of US-directed 'nation-building' would probably weaken the dollar, he said. 'We recall that after the attacks of 9/11, and running through the decade-long US presence in Afghanistan and Iraq, the USD weakened,' Wizman said.
Yahoo
2 days ago
- Business
- Yahoo
Middle East tensions put investors on alert, weighing worst-case scenarios
By Saqib Iqbal Ahmed and Lewis Krauskopf NEW YORK (Reuters) -Investors are mulling a host of different market scenarios should the U.S. deepen its involvement in the Middle East conflict, with the potential for ripple effects if energy prices skyrocket. They have honed in on the evolving situation between Israel and Iran, which have exchanged missile strikes, and are closely monitoring whether the U.S. decides to join Israel in its bombing campaign. Potential scenarios could send inflation higher, dampening consumer confidence and lessening the chance of near-term interest rate cuts. This would likely cause an initial selloff in equities and possible safe-haven bid for the dollar. While U.S. crude prices have climbed some 10% over the past week, the S&P 500 has been little changed as of yet, following an initial drop when Israel launched its attacks. However, if attacks were to take out Iranian oil supply, "that's when the market is going to sit up and take notice," said Art Hogan, chief market strategist at B Riley Wealth. "If you get disruption to supply of oil product on the global marketplace, that is not reflected in today's WTI price and that is where things get negative," Hogan said. The White House said on Thursday President Donald Trump would decide on U.S. involvement in the conflict in the next two weeks. Analysts at Oxford Economics modeled three scenarios, ranging from a de-escalation in the conflict, a complete shutdown in Iranian production, and a closure of the Strait of Hormuz, "each with increasingly large impacts on global oil prices," the firm said in a note. In the most severe case, global oil prices jump to around $130 per barrel, driving U.S. inflation near 6% by the end of this year, Oxford said in the note. "Although the price shock inevitably dampens consumer spending because of the hit to real incomes, the scale of the rise in inflation and concerns about the potential for second-round inflation effects likely ruin any chance of rate cuts in the U.S. this year," Oxford said in the note. OIL IMPACT The biggest market impact from the escalating conflict has been restricted to oil, with oil prices soaring on worries that the Iran-Israel conflict could disrupt supplies. Brent crude futures have risen as much as 18% since June 10, hitting a near 5-month high of $79.04 on Thursday. The accompanying rise in investors' expectations for further near-term volatility in oil prices has outpaced the rise in volatility expectations for other major asset classes, including stocks and bonds. But other asset classes, including stocks, could still feel the knock-on effects of higher oil prices, especially if there is a larger surge in oil prices if the worst market fears of supply disruptions come true, analysts said. "Geopolitical tensions have been mostly ignored by equities, but they are being factored into oil," Citigroup analysts wrote in a note. "To us, the key for equities from here will come from energy commodity pricing," they said. STOCKS UNPERTURBED U.S. stocks have so far weathered rising Middle East tensions with little sign of panic. A more direct U.S. involvement in the conflict could, however, spook markets, investors said. Financial markets may be in for an initial selloff if the U.S. military attacks Iran, with economists warning that a dramatic rise in oil prices could damage a global economy already strained by Trump's tariffs. Still, any pullback in equities might be fleeting, history suggests. During past prominent instances of Middle East tensions coming to a boil, including the 2003 Iraq invasion and the 2019 attacks on Saudi oil facilities, stocks initially languished but soon recovered to trade higher in the months ahead. On average, the S&P 500 slipped 0.3% in the three weeks following the start of conflict, but was 2.3% higher on average two months following the conflict, according to data from Wedbush Securities and CapIQ Pro. DOLLAR WOES An escalation in the conflict could have mixed implications for the U.S. dollar, which has tumbled this year amid worries over diminished U.S. exceptionalism. In the event of U.S. direct engagement in the Iran-Israel War, the dollar could initially benefit from a safety bid, analysts said. "Traders are likely to worry more about the implicit erosion of the terms of trade for Europe, the UK, and Japan, rather than the economic shock to the US, a major oil producer," Thierry Wizman, Global FX & Rates Strategist at Macquarie Group, said in a note. But longer-term, the prospect of US-directed 'nation-building' would probably weaken the dollar, he said. "We recall that after the attacks of 9/11, and running through the decade-long US presence in Afghanistan and Iraq, the USD weakened," Wizman said. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Reuters
2 days ago
- Business
- Reuters
Middle East tensions put investors on alert, weighing worst-case scenarios
NEW YORK, June 21 (Reuters) - Investors are mulling a host of different market scenarios should the U.S. deepen its involvement in the Middle East conflict, with the potential for ripple effects if energy prices skyrocket. They have honed in on the evolving situation between Israel and Iran, which have exchanged missile strikes, and are closely monitoring whether the U.S. decides to join Israel in its bombing campaign. Potential scenarios could send inflation higher, dampening consumer confidence and lessening the chance of near-term interest rate cuts. This would likely cause an initial selloff in equities and possible safe-haven bid for the dollar. While U.S. crude prices have climbed some 10% over the past week, the S&P 500 (.SPX), opens new tab has been little changed as of yet, following an initial drop when Israel launched its attacks. However, if attacks were to take out Iranian oil supply, "that's when the market is going to sit up and take notice," said Art Hogan, chief market strategist at B Riley Wealth. "If you get disruption to supply of oil product on the global marketplace, that is not reflected in today's WTI price and that is where things get negative," Hogan said. The White House said on Thursday President Donald Trump would decide on U.S. involvement in the conflict in the next two weeks. Analysts at Oxford Economics modeled three scenarios, ranging from a de-escalation in the conflict, a complete shutdown in Iranian production, and a closure of the Strait of Hormuz, "each with increasingly large impacts on global oil prices," the firm said in a note. In the most severe case, global oil prices jump to around $130 per barrel, driving U.S. inflation near 6% by the end of this year, Oxford said in the note. "Although the price shock inevitably dampens consumer spending because of the hit to real incomes, the scale of the rise in inflation and concerns about the potential for second-round inflation effects likely ruin any chance of rate cuts in the U.S. this year," Oxford said in the note. The biggest market impact from the escalating conflict has been restricted to oil, with oil prices soaring on worries that the Iran-Israel conflict could disrupt supplies. Brent crude futures have risen as much as 18% since June 10, hitting a near 5-month high of $79.04 on Thursday. The accompanying rise in investors' expectations for further near-term volatility in oil prices has outpaced the rise in volatility expectations for other major asset classes, including stocks and bonds. But other asset classes, including stocks, could still feel the knock-on effects of higher oil prices, especially if there is a larger surge in oil prices if the worst market fears of supply disruptions come true, analysts said. "Geopolitical tensions have been mostly ignored by equities, but they are being factored into oil," Citigroup analysts wrote in a note. "To us, the key for equities from here will come from energy commodity pricing," they said. U.S. stocks have so far weathered rising Middle East tensions with little sign of panic. A more direct U.S. involvement in the conflict could, however, spook markets, investors said. Financial markets may be in for an initial selloff if the U.S. military attacks Iran, with economists warning that a dramatic rise in oil prices could damage a global economy already strained by Trump's tariffs. Still, any pullback in equities might be fleeting, history suggests. During past prominent instances of Middle East tensions coming to a boil, including the 2003 Iraq invasion and the 2019 attacks on Saudi oil facilities, stocks initially languished but soon recovered to trade higher in the months ahead. On average, the S&P 500 slipped 0.3% in the three weeks following the start of conflict, but was 2.3% higher on average two months following the conflict, according to data from Wedbush Securities and CapIQ Pro. An escalation in the conflict could have mixed implications for the U.S. dollar, which has tumbled this year amid worries over diminished U.S. exceptionalism. In the event of U.S. direct engagement in the Iran-Israel War, the dollar could initially benefit from a safety bid, analysts said. "Traders are likely to worry more about the implicit erosion of the terms of trade for Europe, the UK, and Japan, rather than the economic shock to the US, a major oil producer," Thierry Wizman, Global FX & Rates Strategist at Macquarie Group, said in a note. But longer-term, the prospect of US-directed 'nation-building' would probably weaken the dollar, he said. "We recall that after the attacks of 9/11, and running through the decade-long US presence in Afghanistan and Iraq, the USD weakened," Wizman said.
Yahoo
2 days ago
- Business
- Yahoo
Middle East tensions put investors on alert, weighing worst-case scenarios
By Saqib Iqbal Ahmed and Lewis Krauskopf NEW YORK (Reuters) -Investors are mulling a host of different market scenarios should the U.S. deepen its involvement in the Middle East conflict, with the potential for ripple effects if energy prices skyrocket. They have honed in on the evolving situation between Israel and Iran, which have exchanged missile strikes, and are closely monitoring whether the U.S. decides to join Israel in its bombing campaign. Potential scenarios could send inflation higher, dampening consumer confidence and lessening the chance of near-term interest rate cuts. This would likely cause an initial selloff in equities and possible safe-haven bid for the dollar. While U.S. crude prices have climbed some 10% over the past week, the S&P 500 has been little changed as of yet, following an initial drop when Israel launched its attacks. However, if attacks were to take out Iranian oil supply, "that's when the market is going to sit up and take notice," said Art Hogan, chief market strategist at B Riley Wealth. "If you get disruption to supply of oil product on the global marketplace, that is not reflected in today's WTI price and that is where things get negative," Hogan said. The White House said on Thursday President Donald Trump would decide on U.S. involvement in the conflict in the next two weeks. Analysts at Oxford Economics modeled three scenarios, ranging from a de-escalation in the conflict, a complete shutdown in Iranian production, and a closure of the Strait of Hormuz, "each with increasingly large impacts on global oil prices," the firm said in a note. In the most severe case, global oil prices jump to around $130 per barrel, driving U.S. inflation near 6% by the end of this year, Oxford said in the note. "Although the price shock inevitably dampens consumer spending because of the hit to real incomes, the scale of the rise in inflation and concerns about the potential for second-round inflation effects likely ruin any chance of rate cuts in the U.S. this year," Oxford said in the note. OIL IMPACT The biggest market impact from the escalating conflict has been restricted to oil, with oil prices soaring on worries that the Iran-Israel conflict could disrupt supplies. Brent crude futures have risen as much as 18% since June 10, hitting a near 5-month high of $79.04 on Thursday. The accompanying rise in investors' expectations for further near-term volatility in oil prices has outpaced the rise in volatility expectations for other major asset classes, including stocks and bonds. But other asset classes, including stocks, could still feel the knock-on effects of higher oil prices, especially if there is a larger surge in oil prices if the worst market fears of supply disruptions come true, analysts said. "Geopolitical tensions have been mostly ignored by equities, but they are being factored into oil," Citigroup analysts wrote in a note. "To us, the key for equities from here will come from energy commodity pricing," they said. STOCKS UNPERTURBED U.S. stocks have so far weathered rising Middle East tensions with little sign of panic. A more direct U.S. involvement in the conflict could, however, spook markets, investors said. Financial markets may be in for an initial selloff if the U.S. military attacks Iran, with economists warning that a dramatic rise in oil prices could damage a global economy already strained by Trump's tariffs. Still, any pullback in equities might be fleeting, history suggests. During past prominent instances of Middle East tensions coming to a boil, including the 2003 Iraq invasion and the 2019 attacks on Saudi oil facilities, stocks initially languished but soon recovered to trade higher in the months ahead. On average, the S&P 500 slipped 0.3% in the three weeks following the start of conflict, but was 2.3% higher on average two months following the conflict, according to data from Wedbush Securities and CapIQ Pro. DOLLAR WOES An escalation in the conflict could have mixed implications for the U.S. dollar, which has tumbled this year amid worries over diminished U.S. exceptionalism. In the event of U.S. direct engagement in the Iran-Israel War, the dollar could initially benefit from a safety bid, analysts said. "Traders are likely to worry more about the implicit erosion of the terms of trade for Europe, the UK, and Japan, rather than the economic shock to the US, a major oil producer," Thierry Wizman, Global FX & Rates Strategist at Macquarie Group, said in a note. But longer-term, the prospect of US-directed 'nation-building' would probably weaken the dollar, he said. "We recall that after the attacks of 9/11, and running through the decade-long US presence in Afghanistan and Iraq, the USD weakened," Wizman said.
Free Malaysia Today
31-05-2025
- Business
- Free Malaysia Today
From TACO to FAFO, investors love parodies of Trump acronyms
US President Donald Trump was inaugurated in January after winning the November elections. (AP pic) NEW YORK : Four months into US President Donald Trump's second term, market observers have taken a cue from his fondness for condensing slogans into catchy acronyms like MAGA, DOGE and MAHA, and devised a few of their own that have been spreading across trading desks. Even those acronyms that do not directly reflect a specific trading strategy, still capture factors that traders say are important in Trump-era markets, such as volatility and uncertainty, that investors need to consider when making decisions. Some of the new labels are associated with investment strategies that aimed to capitalise on Trump's economic and trade policies, and international relations goals. Others riff off economic implications or his abrupt U-turns as markets and trade partners react to his proposals. The 'Trump trade' that played on the Make America Great Again theme in the wake of his November election victory and January inauguration, and contributed to record highs on Wall Street in February, is hardly discussed now that stocks, the dollar and treasury bonds have succumbed to worries about his tariff polices. 'Post the election, we heard a lot about YOLO (You Only Live Once), which seemed to promote taking outsize risks in a concentrated investment theme,' Art Hogan, strategist at B Riley Wealth, said. YOLO, is an acronym used to describe the tendency that was part of that Trump trade to chase high momentum strategies such as cryptocurrency. 'While the term YOLO was popular for a period of time, it goes against all traditional advice,' Hogan said. Here are a few more acronyms that have gotten play in the investment world in recent weeks: TACO (Trump Always Chickens Out) This one, coined by a Financial Times columnist, has been used as a way to describe Trump's to-ing and fro-ing on tariffs in the wake of his April 2 'Liberation Day' speech. When asked about TACO in a recent press conference, the president lashed out, calling the question 'nasty'. 'Where we end up might not be too far from what he promised on the campaign trail. So, does he always chicken out? I wouldn't go as far as to say that,' said Christian DiClementi, fixed income portfolio manager at AllianceBernstein. 'I think that he wants to rebalance the economy without pushing it off a cliff. And we're watching that being executed in real time. I think some of the ideas are thought out and some of them change on the fly.' MEGA (Make Europe Great Again) MEGA, first coined last year to address European competitiveness, resurfaced this spring as a way to describe the flurry of investor interest in and flows into European markets. MEGA hats, spoofing their MAGA counterparts, are easily purchased online It's been revived by investors and traders in light of the outperformance European stocks in the immediate aftermath of Trump's 'Liberation Day' tariffs bombshell. MAGA (Make America Go Away) While the original Trump trade was also known as the MAGA trade, this variation cribbed the president's motto, first appearing in response to vice-president JD Vance's brief and unfruitful visit to Greenland, the autonomous territory of Denmark, which Trump has expressed interest in annexing. At least one Canadian investor says that quip is making the rounds of trading desks in Toronto and Montreal and sparking 'wishful thinking' about simply boycotting US investments. FAFO (F*** Around and Find Out) Although the acronym also came into being well before Trump's inauguration, it is being heard with increasing frequency in trading desk conversations. It is used to capture the financial market's volatility and chaos that Trump's policymaking process has created. Mark Spindel, chief investment officer of Potomac River Capital LLC, described the market as being caught in a 'pinball machine as a result of that policymaking process'. When reached for comment, White House spokesman Kush Desai said in an email 'these asinine acronyms convey how unserious analysts have consistently beclowned themselves by mocking president Trump and his agenda that've already delivered multiple expectation-beating jobs and inflation reports, trillions in investment commitments, a historic UK trade agreement, and rising consumer confidence.'
