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Straits Times
21-06-2025
- Business
- Straits Times
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. PHOTO: BLOOMBERG NEW YORK - 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 are honed in on the evolving situation between Israel and Iran, which have exchanged missile strikes, and are poised for action if the US decides to join Israel in its bombing campaign. That would likely cause an initial selloff in equities and possible safe-haven bid for the dollar on concerns US military action against Iran would send inflation higher, dampening consumer confidence and lessening the chance of near-term interest rate cuts. The move by the US to deploy B-2 bombers to Guam on June 21 has caught the attention of market participants. While the bombers could be used to deliver the 30,000-pound bombs able to destroy Iran's underground nuclear programme facilities, it is unclear whether the move is tied to Middle East events. The move 'just underscores the administration's willingness to threaten to intervene,' said Mr Mark Spindel, chief investment officer of Potomac River Capital LLC. 'I think this will help oil prices stay higher; the easy direction for them right now is up at this point,' Mr Spindel added. While US West Texas Intermediate crude prices (WTI) have climbed some 10 per cent over the past week, the S&P 500 has been little changed, 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 Mr 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,' Mr Hogan said. The White House said on June19 that President Donald Trump would decide on US involvement in the conflict in the next two weeks. Israeli officials, however, have told the Trump administration they do not want to wait the two weeks and that Israel could act alone before the deadline is up, two sources said. Analysts at Oxford Economics modelled three scenarios, including 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 US$130 (S$167) per barrel, driving US inflation near 6 per cent by the end of 2025, 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. Global benchmark Brent crude futures have risen as much as 18 per cent since June 10, hitting a near five-month high of US$79.04 on June 19. 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 conflict with little sign of panic. A more direct U.S. involvement in the conflict could, however, spook markets, investors said. As the days pass, Potomac River Capital's Spindel said, markets have become increasingly focused on the Middle East. 'The stock market can only digest one thing at a time, and right now we're all focused on if, whether and when the US enters this conflict.' Economists warn that a dramatic rise in oil prices could damage a global economy already strained by Mr 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 per cent in the three weeks following the start of conflict, but was 2.3 per cent 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,' Mr Thierry Wizman, Global FX & Rates Strategist at Macquarie Group, said in a note. But longer-term, the prospect of U.S.-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,' Mr Wizman said. REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.
GMA Network
21-06-2025
- Business
- GMA Network
Middle East tensions put investors on alert, weighing worst-case scenarios
Global oil prices may jump to around $130 per barrel in the most severe case scenario resulting from the tensions between Israel and Iran, according to Oxford Economics analysts. File photo NEW YORK - 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 are honed in on the evolving situation between Israel and Iran, which have exchanged missile strikes, and are poised for action if the US decides to join Israel in its bombing campaign. That would likely cause an initial selloff in equities and possible safe-haven bid for the dollar on concerns US military action against Iran would send inflation higher, dampening consumer confidence and lessening the chance of near-term interest rate cuts. The move by the US to deploy B-2 bombers to Guam on Saturday has caught the attention of market participants. While the bombers could be used to deliver the 30,000-pound bombs able to destroy Iran's underground nuclear program facilities, it is unclear whether the move is tied to Middle East events. The move "just underscores the administration's willingness to threaten to intervene," said Mark Spindel, chief investment officer of Potomac River Capital LLC. "I think this will help oil prices stay higher; the easy direction for them right now is up at this point," Spindel added. While US West Texas Intermediate crude prices (WTI) have climbed some 10% over the past week, the S&P 500 has been little changed, 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 that President Donald Trump would decide on US involvement in the conflict in the next two weeks. Israeli officials, however, have told the Trump administration they do not want to wait the two weeks and that Israel could act alone before the deadline is up, two sources said. Analysts at Oxford Economics modeled three scenarios, including 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% 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. Global benchmark Brent crude futures LCOc1 have risen as much as 18% since June 10, hitting a near five-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 conflict with little sign of panic. A more direct US involvement in the conflict could, however, spook markets, investors said. As the days pass, Potomac River Capital's Spindel said, markets have become increasingly focused on the Middle East. "The stock market can only digest one thing at a time, and right now we're all focused on if, whether and when the US enters this conflict." Economists warn 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 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 U.S., 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. —Reuters
Time of India
31-05-2025
- Business
- Time of India
Trump acronyms: Wall Street loves the laughs: Trump acronym parodies like TACO and FAFO take meme markets by storm
What are traders saying with acronyms like TACO and FAFO? How are markets reacting to Trump's unpredictable policies? How did the White House react to the acronym parodies? ADVERTISEMENT Could these acronyms be considered as mere jokes or do they serve as meaningful indicators? ADVERTISEMENT ADVERTISEMENT FAQs Wall Street is more than just numbers and financial jargon; apparently, it's also got jokes. During President Donald Trump's second term, traders are transforming his slogan-heavy style into meme-worthy "TACO" to "FAFO," these acronym parodies are popping up on trading desks and in market chatter. Although they are often amusing, these memes reflect serious investor concerns regarding changing policies and economic risks during Trump's second observers have taken advantage of President Trump's habit of shortening slogans into acronyms like MAGA, DOGE, and MAHA, and they have been circulating among trading desks for the past four months of his second abbreviations devoid of a trading strategy capture elements that traders claim are crucial in Trump-era markets, like volatility and uncertainty, which investors should take into account when making strategies that benefited from Trump's trade, economic, and international relations policies are linked to some of the new labels. Others discuss his economic ramifications or abrupt reversals in response to his proposals from trade partners and to Potomac River Capital LLC 's chief investment officer Mark Spindel, the market is stuck in a "pinball machine as a result of Trump's policymaking process."In an email, White House spokesperson Kush Desai said that these ridiculous acronyms demonstrate how uncritical analysts have ridiculed President Trump and his agenda, which has already produced a number of inflation and employment reports that exceeded expectations, as quoted in a report by the following acronyms have gained popularity in the investment community, as per a report by Reuters:A Financial Times columnist came up with the term "TACO" (Trump Always Chickens Out), which has been used to characterize Trump's back and forth on tariffs following his "Liberation Day" speech on April 2. During a recent press conference, the president snapped at a question about TACO, calling it "nasty."The term "MEGA" (Make Europe Great Again) was first used to discuss European competitiveness last year, but it reappeared this spring to refer to the surge of investor interest in and flows into European markets. Online shopping for MEGA hats, which mimic their MAGA counterparts, is simple. Due to the outperformance of European stocks immediately following Trump's "Liberation Day" tariff bombshell, traders and investors have given it new America Go Away (MAGA): Although the original Trump trade was also referred to as the MAGA trade, this version adopted the president's motto. It initially surfaced in reaction to Vice President JD Vance's short-lived and unsuccessful trip to Greenland, a Danish autonomous territory that Trump has indicated he would like to annex. The joke is circulating among trading desks in Toronto and Montreal, according to at least one Canadian investor, and it is causing "wishful thinking" about merely boycotting U.S. (Fuck Around and Find Out) is an acronym that was coined long before Trump was elected president, but it is becoming more and more common in trading desk discourse. It is employed to record the chaos and volatility of the financial markets brought about by Trump's policymaking process."YOLO (You Only Live Once) seemed to encourage outsized risks in concentrated investment themes," Art Hogan, a strategist at B. Riley Wealth, stated after the tendency that was a part of that Trump trade to pursue high-momentum strategies, like cryptocurrency, is referred to by the acronym YOLO. "While the term YOLO was popular for a period of time, it contradicts all conventional advice," Art Hogan stands for "Trump Always Chickens Out,' it mocks Trump's inconsistency on key issues such as tariffs, implying that he frequently backs down from bold use them to mock the chaos, volatility, and mixed signals in Trump-era markets. They're entertaining, but they also address legitimate investor concerns.
Economic Times
31-05-2025
- Business
- Economic Times
Wall Street loves the laughs: Trump acronym parodies like TACO and FAFO take meme markets by storm
Wall Street traders are using acronyms to comment on Donald Trump's policies. These acronyms, like TACO and FAFO, reflect market volatility. They also highlight investor concerns about economic risks. The White House dismisses these acronyms as ridicule. Tired of too many ads? Remove Ads What are traders saying with acronyms like TACO and FAFO? How are markets reacting to Trump's unpredictable policies? Tired of too many ads? Remove Ads How did the White House react to the acronym parodies? Could these acronyms be considered as mere jokes or do they serve as meaningful indicators? Tired of too many ads? Remove Ads FAQs Wall Street is more than just numbers and financial jargon; apparently, it's also got jokes. During President Donald Trump's second term, traders are transforming his slogan-heavy style into meme-worthy "TACO" to "FAFO," these acronym parodies are popping up on trading desks and in market chatter. Although they are often amusing, these memes reflect serious investor concerns regarding changing policies and economic risks during Trump's second observers have taken advantage of President Trump's habit of shortening slogans into acronyms like MAGA, DOGE, and MAHA, and they have been circulating among trading desks for the past four months of his second abbreviations devoid of a trading strategy capture elements that traders claim are crucial in Trump-era markets, like volatility and uncertainty, which investors should take into account when making strategies that benefited from Trump's trade, economic, and international relations policies are linked to some of the new labels. Others discuss his economic ramifications or abrupt reversals in response to his proposals from trade partners and to Potomac River Capital LLC 's chief investment officer Mark Spindel, the market is stuck in a "pinball machine as a result of Trump's policymaking process."In an email, White House spokesperson Kush Desai said that these ridiculous acronyms demonstrate how uncritical analysts have ridiculed President Trump and his agenda, which has already produced a number of inflation and employment reports that exceeded expectations, as quoted in a report by the following acronyms have gained popularity in the investment community, as per a report by Reuters:A Financial Times columnist came up with the term "TACO" (Trump Always Chickens Out), which has been used to characterize Trump's back and forth on tariffs following his "Liberation Day" speech on April 2. During a recent press conference, the president snapped at a question about TACO, calling it "nasty."The term "MEGA" (Make Europe Great Again) was first used to discuss European competitiveness last year, but it reappeared this spring to refer to the surge of investor interest in and flows into European markets. Online shopping for MEGA hats, which mimic their MAGA counterparts, is simple. Due to the outperformance of European stocks immediately following Trump's "Liberation Day" tariff bombshell, traders and investors have given it new America Go Away (MAGA): Although the original Trump trade was also referred to as the MAGA trade, this version adopted the president's motto. It initially surfaced in reaction to Vice President JD Vance's short-lived and unsuccessful trip to Greenland, a Danish autonomous territory that Trump has indicated he would like to annex. The joke is circulating among trading desks in Toronto and Montreal, according to at least one Canadian investor, and it is causing "wishful thinking" about merely boycotting U.S. (Fuck Around and Find Out) is an acronym that was coined long before Trump was elected president, but it is becoming more and more common in trading desk discourse. It is employed to record the chaos and volatility of the financial markets brought about by Trump's policymaking process."YOLO (You Only Live Once) seemed to encourage outsized risks in concentrated investment themes," Art Hogan, a strategist at B. Riley Wealth, stated after the tendency that was a part of that Trump trade to pursue high-momentum strategies, like cryptocurrency, is referred to by the acronym YOLO. "While the term YOLO was popular for a period of time, it contradicts all conventional advice," Art Hogan stands for "Trump Always Chickens Out,' it mocks Trump's inconsistency on key issues such as tariffs, implying that he frequently backs down from bold use them to mock the chaos, volatility, and mixed signals in Trump-era markets. They're entertaining, but they also address legitimate investor concerns.
Time of India
31-05-2025
- Business
- Time of India
Wall Street loves the laughs: Trump acronym parodies like TACO and FAFO take meme markets by storm
Wall Street traders are using acronyms to comment on Donald Trump's policies. These acronyms, like TACO and FAFO, reflect market volatility. They also highlight investor concerns about economic risks. The White House dismisses these acronyms as ridicule. Tired of too many ads? Remove Ads What are traders saying with acronyms like TACO and FAFO? How are markets reacting to Trump's unpredictable policies? Tired of too many ads? Remove Ads How did the White House react to the acronym parodies? Could these acronyms be considered as mere jokes or do they serve as meaningful indicators? Tired of too many ads? Remove Ads FAQs Wall Street is more than just numbers and financial jargon; apparently, it's also got jokes. During President Donald Trump's second term, traders are transforming his slogan-heavy style into meme-worthy "TACO" to "FAFO," these acronym parodies are popping up on trading desks and in market chatter. Although they are often amusing, these memes reflect serious investor concerns regarding changing policies and economic risks during Trump's second observers have taken advantage of President Trump's habit of shortening slogans into acronyms like MAGA, DOGE, and MAHA, and they have been circulating among trading desks for the past four months of his second abbreviations devoid of a trading strategy capture elements that traders claim are crucial in Trump-era markets, like volatility and uncertainty, which investors should take into account when making strategies that benefited from Trump's trade, economic, and international relations policies are linked to some of the new labels. Others discuss his economic ramifications or abrupt reversals in response to his proposals from trade partners and to Potomac River Capital LLC 's chief investment officer Mark Spindel, the market is stuck in a "pinball machine as a result of Trump's policymaking process."In an email, White House spokesperson Kush Desai said that these ridiculous acronyms demonstrate how uncritical analysts have ridiculed President Trump and his agenda, which has already produced a number of inflation and employment reports that exceeded expectations, as quoted in a report by the following acronyms have gained popularity in the investment community, as per a report by Reuters:A Financial Times columnist came up with the term "TACO" (Trump Always Chickens Out), which has been used to characterize Trump's back and forth on tariffs following his "Liberation Day" speech on April 2. During a recent press conference, the president snapped at a question about TACO, calling it "nasty."The term "MEGA" (Make Europe Great Again) was first used to discuss European competitiveness last year, but it reappeared this spring to refer to the surge of investor interest in and flows into European markets. Online shopping for MEGA hats, which mimic their MAGA counterparts, is simple. Due to the outperformance of European stocks immediately following Trump's "Liberation Day" tariff bombshell, traders and investors have given it new America Go Away (MAGA): Although the original Trump trade was also referred to as the MAGA trade, this version adopted the president's motto. It initially surfaced in reaction to Vice President JD Vance's short-lived and unsuccessful trip to Greenland, a Danish autonomous territory that Trump has indicated he would like to annex. The joke is circulating among trading desks in Toronto and Montreal, according to at least one Canadian investor, and it is causing "wishful thinking" about merely boycotting U.S. (Fuck Around and Find Out) is an acronym that was coined long before Trump was elected president, but it is becoming more and more common in trading desk discourse. It is employed to record the chaos and volatility of the financial markets brought about by Trump's policymaking process."YOLO (You Only Live Once) seemed to encourage outsized risks in concentrated investment themes," Art Hogan, a strategist at B. Riley Wealth, stated after the tendency that was a part of that Trump trade to pursue high-momentum strategies, like cryptocurrency, is referred to by the acronym YOLO. "While the term YOLO was popular for a period of time, it contradicts all conventional advice," Art Hogan stands for "Trump Always Chickens Out,' it mocks Trump's inconsistency on key issues such as tariffs, implying that he frequently backs down from bold use them to mock the chaos, volatility, and mixed signals in Trump-era markets. They're entertaining, but they also address legitimate investor concerns.
