Uncertainty about Iran conflict duration is forcing traders to look at historical parallels with Russia's 2022 Ukraine invasion for market guidance on gas/oil prices, bonds, stocks, and dollar.
speaker1
Energy prices are most impacted - higher prices could trigger inflation and hurt economic growth, bad for both stocks and bonds.
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Fear and uncertainty mean investors rush to dollar safety - dollar rose sharply after Russia invaded Ukraine and has risen sharply again after US/Israel attacked Iran.
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JP Morgan drew parallels to 2022, noting retail investors avoided selling stocks for a month after Russian invasion but then offloaded equities and bonds - biggest market reactions may still be ahead.
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Goldman Sachs chairman David Solomon said it will take weeks to understand more about the situation, but market reaction so far has been benign.
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David Solomon
I don't think people are being complacent - market participants are looking and trying to say how this will play out, what's the endgame.
How much history will repeat itself is unclear, but markets are still on edge with main concern that extended Middle East conflict will trigger inflation shock rippling across world.