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Bloomberg
5 days ago
- Business
- Bloomberg
Bloomberg Surveillance: Israel-Iran Conflict
Watch Tom and Paul LIVE every day on YouTube: Bloomberg Surveillance hosted by Tom Keene & Paul Sweeney June 23rd, 2025 Featuring: 1) Richard Haass, Senior Counselor with Centerview Partners & President Emeritus at Council on Foreign Relations, joins for a discussion on the Israel-Iran conflict. Iran vowed retaliation and continued attacks on Israel following US strikes on its nuclear facilities, fueling fears of a wider war in the Middle East and rattling global markets. The conflict has also raised concerns about oil prices and inflation. 2) Robert D. Kaplan, author and foreign affairs expert, joins for a discussion on the Iran-Israel conflict and whether the US involvement stops at this weekend's strikes. The US operation targeted nuclear sites at Fordow, Natanz, and Isfahan, and included 125 aircraft, strikes by Tomahawk missiles, and the use of 14 Massive Ordnance Penetrator bombs. 3) Lori Calvasina, Head of US Equity Strategy at RBC Capital Markets, on why oil has now become central to her 2025 S&P target. US equity futures advanced and crude prices fluctuated on speculation that Iran's response to Washington's bombing of its nuclear sites is unlikely to significantly disrupt oil traffic from the Middle East. 4) Steven Englander, Global Head of G10 FX Research and of North America Strategy for Standard Chartered Bank, brings us into the market open and discusses how the Fed's approach to rates could be reshaped by a potential oil and inflation spike. The yield on 10-year Treasuries rose two basis points to 4.39%, and a data release showed private sector activity in the euro area barely grew in June, as erratic US trade policy and geopolitical conflicts leave companies uncertain about what's next. 5) Paul Sankey, Lead Analyst at Sankey Research, discusses the path for oil and energy from here. Oil prices initially surged after US strikes on Iranian nuclear sites, but later dropped as fears of an immediate supply disruption faded. The oil market remains gripped by an escalating crisis, with risks including a potential disruption to supplies through the Strait of Hormuz and attacks on crude infrastructure in rival suppliers.
Yahoo
17-06-2025
- Business
- Yahoo
Israel-Iran conflict poses three challenges for stocks that could slam market by up to 20%, warns RBC
Amid the tragedy of the Israel-Iran conflict, stocks are proving stoic. Futures early Monday, as the missile attacks continued, showed the S&P 500 once again reclaiming the 6,000 mark. That's only about 2% shy of the record high struck in February. However, there are three possible ways that the Middle East conflagration may still negatively effect the equity market, according to Lori Calvasina, head of U.S. equity strategy research at RBC Capital Markets. Israel-Iran clash delivers a fresh shock to investors. History suggests this is the move to make. 'I prepaid our mom's rent for a year': My sister is a millionaire and never helps our mother. How do I cut her out of her will? These defense stocks offer the best growth prospects, as the Israel-Iran conflict fuels new interest in the sector 'He failed in his fiduciary duty': My brother liquidated our mother's 401(k) for her nursing home. He claimed the rest. My friend is getting divorced. Her husband offered to sign over their house. What's he hiding? The first concern is an adverse impact that the Israel-Iran escalation could have on the multiples that investors are prepared to apply to stocks, says Calvasina in a note published late Sunday. 'Similar to what we see with economic policy uncertainty, when national security policy uncertainty rises, P/Es for the S&P 500 have tended to contract,' she says. P/Es refers to the share price to earnings multiples of a stock, or price-to-earnings. Calvasina reckons this factor is particularly important now because the S&P 500's P/E multiples didn't even get cheap during the tariff-induced market tantrum of March and April, and have quickly retuned to levels that are well above long-term averages. Consequently, the fresh Middle East conflict 'comes at a time when stocks should be vulnerable to bad news from a valuation perspective,' she says. The second issue is the damage the heightened geopolitical tension may wreak upon investor, consumer and business sentiment — which have been showing signs of healing recently after the trade war scare. According to Calvasina: 'These inflections in sentiment, which have been stronger on the investor side than the consumer and small business side, have been a key driver of the recent rally in stocks.' For example, nascent optimism about initial public offerings, and mergers and acquisitions, could falter if market volatility spikes. And Calvasina notes that corporate transcripts have shown in the past how other events like the Los Angeles fires, bad weather and the flu are said to impact consumer behavior, and she thinks it's likely investors will be reading about the Middle East tension in future earnings calls. The final factor is the impact rising oil prices may have on inflationary pressures. RBC's commodity strategists see further significant upside for Brent crude BRN00, the international benchmark, if a material disruption to oil supply occurs in the Middle East. This could muddle the Federal Reserve's inflation outlook, a problem for stocks given one support for the market has been expectations of rate cuts later in the year and into 2026. Indeed, RBC's valuation model suggests that higher headline inflation would be a drag on P/E multiples. The bank's newest valuation stress test took personal consumption expenditure price index inflation (the Fed's favored measure) up to 4%, applied just two 25 basis point Fed rate cuts for the rest of 2025, and assumed 10-year Treasury yields BX:TMUBMUSD10Y were around current levels, just below 4.45%, until the end of the year. '[D]epending on what EPS is used, this stress test points to fair value for the S&P 500 at the end of 2025 in the 4,800-5,200 range, near the bottom of our 2nd tier of fear and a retest of the early-2025 lows,' says Calvasina. The S&P 500 SPX closed Friday at 5,977. U.S. stock-indices SPX DJIA COMP are higher as benchmark Treasury yields BX:TMUBMUSD10Y rise. The dollar index DXY is lower, while oil prices CL.1 slip back and gold GC00 is trading around $3,415 an ounce. Key asset performance Last 5d 1m YTD 1y S&P 500 5976.97 -0.39% 0.31% 1.62% 10.04% Nasdaq Composite 19,406.83 -0.63% 1.02% 0.50% 9.71% 10-year Treasury 4.439 -3.90 -1.50 -13.70 15.30 Gold 3438.4 2.74% 6.38% 30.28% 47.34% Oil 72.5 10.89% 16.65% 0.88% -9.31% Data: MarketWatch. Treasury yields change expressed in basis points Need to Know starts early and is updated until the opening bell, but to get it delivered once to your email box. The emailed version will be sent out at about 7:30 a.m. Eastern. Israel and Iran have continued to trade attacks for a fourth day, though oil prices gave back their early-Monday gains. The Treasury will announce the result of a $13 billion 20-year bond auction at 1:00 p.m. China has refused to approve export of specific rare earth materials used in U.S. weapons systems, according to reports. A man suspected of shooting two state Democratic lawmakers was arrested late Sunday. Not paying a couple of hundred bucks for patent protection may cost Novo Nordisk DK:NOVO.B NVO billions. Kering shares FR:KER are jumping 10% on reports the luxury-goods company behind Gucci, Yves Saint Laurent and other brands, has lured Renault's chief executive to run the company. Sarepta Therapeutics shares SRPT are diving by more than a third after the company reported a second case of acute liver failure resulting in death from taking Elevidys. Red vs. Blue is dividing stock portfolios like never before. Trump says he decides what 'America First' means. They asked an AI chatbot questions. The answers sent them spiraling. Perspective is always required in markets. Jay Kaeppel, senior market analyst at SentimenTrader, says traders can see whatever they want to see in a chart, depending on its duration. 'Case in point — Crude Oil. Are you in the 'WHOA' crowd or the 'Meh' crowd? (BTW: The market doesn't care either way),' he wrote on X. Here were the most active stock-market tickers on MarketWatch as of 6 a.m. Eastern. Ticker Security name TSLA Tesla NVDA Nvidia GME GameStop PLTR Palantir Technologies AAPL Apple MLGO MicroAlgo AMD Advanced Micro Devices TSM Taiwan Semiconductor Manufacturing AMZN NEON Neonode Bruce, MLBs bat retriever. British pubs have their own set of rules. Here's what you need to know, besides returning your glasses after you've done drinking. The secret psychology of dogs and cats: do we ever really know what they are thinking? For more market updates plus actionable trade ideas for stocks, options and crypto, . My husband is in hospice care. Friends say his children are lining up for his money. What can I do? My mother-in-law thought the world's richest man needed Apple gift cards. How on Earth could she fall for this scam? My second wife says her 2 kids should inherit our estate, but I also have 2 kids. Is that fair? 'I'm not wildly wealthy, but I've done well': I'm 79 and have $3 million in assets. Should I set up 529 plans for my grandkids? 'It might be another Apple or Microsoft': My wife invested $100K in one stock and it exploded 1,500%. Do we sell?
Yahoo
16-06-2025
- Business
- Yahoo
Why US stocks aren't bracing for 'significant escalation' in Israel-Iran conflict yet
US stocks have remained resilient despite escalating tensions between Israel and Iran. Since Israel first launched missiles on Iran before the market open on Friday, the S&P 500 (^GSPC) is essentially flat. "So far, we think the US equity market hasn't baked in a significant escalation or broadening [of the conflict]," RBC Capital Markets head of US equity strategy research Lori Calvasina wrote in a note to clients on Sunday. Calvasina said the key risk to markets from the conflict would be an escalation of the attacks that leads to a jump in oil prices. Oil prices initially surged on Friday, with West Texas Intermediate futures (CL=F) hitting a high of $77 before paring back gains. By Monday morning, WTI futures had fallen to about $70 per barrel, reflecting just a 3% increase since the start of the conflict. Strategists have argued that a closure of the Strait of Hormuz — a waterway between the Persian Gulf and the Gulf of Oman that accounts for about 20% of global oil flows — would be the likely catalyst to keep sending oil prices higher. But that is looking increasingly unlikely. On Monday, the Wall Street Journal reported Iran is seeking to deescalate the conflict, citing insight from "Middle Eastern and European" officials. Stocks moved higher on the report, while oil futures quickly hit their lows of the session. For investors, the prevailing market fear of the conflict is that a large increase in oil prices could disrupt an already murky inflation picture, with investors waiting for increased tariffs to eventually lead to price increases later this year. This could keep the Federal Reserve from cutting interest rates and potentially weigh on the health of the US consumer. But as DataTrek Research co-founder Nick Colas pointed out in a note on Monday morning, that would typically require a large spike in oil prices. Colas analyzed the time period from 1987 through 2019 and found that WTI crude prices typically double compared to the previous year prior to recessions. Colas argued this puts the key level to watch for WTI crude at $120 a barrel, a far cry from the roughly $70 it sat at on Monday morning. This large of a jump in oil would require a "protracted bout of military action," per Colas. "While we assume Mideast tensions will soon subside, as they have repeatedly done over the last few years, oil prices can eventually impact the US economy and investors are best served by maintaining exposure to the Energy (XLE) sector," Colas wrote. Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer. 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
Yahoo
16-06-2025
- Business
- Yahoo
US Stocks Risk 20% Drop in High Inflation Scenario, RBC Says
(Bloomberg) -- The S&P 500 Index risks sinking 20% if inflation spikes on the back of higher oil prices, according to a report by RBC Capital Markets LLC strategists that laid out three possible pullbacks. Shuttered NY College Has Alumni Fighting Over Its Future Do World's Fairs Still Matter? As Part of a $45 Billion Push, ICE Prepares for a Vast Expansion of Detention Space As American Architects Gather in Boston, Retrofits Are All the Rage The strategists, led by Lori Calvasina, said US equities are vulnerable given the recent rally and valuations look stretched. The broader the Middle East conflict becomes and the longer it lasts, the more negative it will be for US stocks, they said. In a worst-case scenario, they see the S&P 500 returning to its April lows if the attacks drive up energy prices. And in a less-severe case, the index may fall about 13%, the strategists said. 'The conflict has the potential to generate some additional angst about the health of the consumer, the broader economy, and the path of the Fed, a narrative shift that seems likely to be problematic for stock prices,' the strategists wrote in the note. For now, markets have been relatively calm despite the intensifying clash between Israel and Iran. Oil prices dipped on Monday after a 7% rally on Friday, with investors saying that the conflict so far has avoided major energy facilities and seems limited between the two countries. Still, with the attacks entering a fourth day, there's the fear that it may escalate to a wider regional war. The RBC analysis shows the benchmark could drop to as low as 4,800 points — nearly 20% below current levels — by the year end in the case of a 'severe' inflation spike to 4%, zero earnings growth from 2024, only two interest-rate cuts by the Federal Reserve and 10-year Treasury yields remaining at current levels. In the milder situation, they see earning growth this year at 7% and the S&P 500 ending the year around 5,200. The bank's year-end target for the index is 5,730, about 4% below current levels. Other strategists remain optimistic about the outlook for corporate earnings and the US stock market. Morgan Stanley's Michael Wilson said in a note Monday that some metrics suggested earnings would come in stronger-than-expected over the next year. American Mid: Hampton Inn's Good-Enough Formula for World Domination The Spying Scandal Rocking the World of HR Software New Grads Join Worst Entry-Level Job Market in Years As Companies Abandon Climate Pledges, Is There a Silver Lining? How a Tiny Middleman Could Access Two-Factor Login Codes From Tech Giants ©2025 Bloomberg L.P. Sign in to access your portfolio
Yahoo
16-06-2025
- Business
- Yahoo
US Stocks Risk 20% Drop in High Inflation Scenario, RBC Says
(Bloomberg) -- The S&P 500 Index risks sinking 20% if inflation spikes on the back of higher oil prices, according to a report by RBC Capital Markets LLC strategists that laid out three possible pullbacks. Shuttered NY College Has Alumni Fighting Over Its Future Do World's Fairs Still Matter? As Part of a $45 Billion Push, ICE Prepares for a Vast Expansion of Detention Space NYC Renters Brace for Price Hikes After Broker-Fee Ban As American Architects Gather in Boston, Retrofits Are All the Rage The strategists, led by Lori Calvasina, said US equities are vulnerable given the recent rally and valuations look stretched. The broader the Middle East conflict becomes and the longer it lasts, the more negative it will be for US stocks, they said. In a worst-case scenario, they see the S&P 500 returning to its April lows if the attacks drive up energy prices. And in a less-severe case, the index may fall about 13%, the strategists said. 'The conflict has the potential to generate some additional angst about the health of the consumer, the broader economy, and the path of the Fed, a narrative shift that seems likely to be problematic for stock prices,' the strategists wrote in the note. For now, markets have been relatively calm despite the intensifying clash between Israel and Iran. Oil prices dipped on Monday after a 7% rally on Friday, with investors saying that the conflict so far has avoided major energy facilities and seems limited between the two countries. Still, with the attacks entering a fourth day, there's the fear that it may escalate to a wider regional war. The RBC analysis shows the benchmark could drop to as low as 4,800 points — nearly 20% below current levels — by the year end in the case of a 'severe' inflation spike to 4%, zero earnings growth from 2024, only two interest-rate cuts by the Federal Reserve and 10-year Treasury yields remaining at current levels. In the milder situation, they see earning growth this year at 7% and the S&P 500 ending the year around 5,200. The bank's year-end target for the index is 5,730, about 4% below current levels. Other strategists remain optimistic about the outlook for corporate earnings and the US stock market. Morgan Stanley's Michael Wilson said in a note Monday that some metrics suggested earnings would come in stronger-than-expected over the next year. American Mid: Hampton Inn's Good-Enough Formula for World Domination The Spying Scandal Rocking the World of HR Software New Grads Join Worst Entry-Level Job Market in Years As Companies Abandon Climate Pledges, Is There a Silver Lining? The $7 Billion Nicotine-Pouch Market's Next Target? Women ©2025 Bloomberg L.P. 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
