Street Signals

Short-term market conditions remain subject to the headlines. Long-term questions of US equity market performance and whether investors require a rethink of their asset allocation preferences are the same and as valid today as they were before the eruption of Middle East hostilities. This week, Dan Gerard, senior multi-asset strategist for State Street Markets, talks to us about a new piece on the US stock market and whether concentration and valuation risks are as acute today as they were earlier in the year.
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In a decade full of seismic geopolitical events, the conflict in Iran had the potential to rank amongst the most impactful. Yet financial markets never priced it as more than a fleeting instance of volatility. And now, the most severe dislocations are almost fully closed with the onset of talks to deescalate tensions. Question marks remain over energy supplies and the macroeconomic impacts of higher equilibrium oil and gas prices. This week, Peter Vincent, head of FX trading for EMEA at State Street Markets, joins us to discuss the landscape for FX, rate and equity markets now that the dust has settled.
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Many of the consequences of the latest disruption to global energy supply have yet to surface. While oil has been the immediate focus, volatility across global interest rate curves is emerging as an equally consequential second-order effect. Markets are rapidly reassessing the scale and timing of inflation and growth shocks – and how central banks are likely to respond. Whether this period of upheaval deepens worries already evident in credit markets is a further concern. This week, Marvin Loh, senior strategist at State Street Markets, joins the podcast to share his outlook for rates, credit and the impacts on the global economy through the coming months.
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As the conflict in the Middle East enters a third week, markets remain uneasy but resilient. Lessons absorbed during past geopolitical shocks have so far kept this a slow-burn test of positioning and risk tolerance, rather than a volatility event with a specific breaking point. This week, we speak with Lee Ferridge, Head of Macro Strategy for the Americas for State Street Markets as to whether this equilibrium can hold. He notes the most relevant variables of investor positioning and activity and their current messages, if markets are correctly pricing the policy response and why the US dollar has reasserted its safe-haven status.
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A wider Middle East war and the closure of the Strait of Hormuz, seen for years as extreme ‘what-if’ risks, are now realities. The ranges of macroeconomic and geopolitical outcomes are as vast as they are unknowable, but reasonable future scenarios are starting to take shape. This week, we speak to Elliot Hentov, Chief Macro Policy Strategist at State Street Investment Management, about the evolving conflict in Iran and the market implications for a prolonged disruption in one of the world’s key energy chokepoints.
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