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The crisis in the Middle East fuels volatility and leaves Japan in the red

Date: July 18, 2024 Time: 04:29:20

April may become the first negative month for the S&P 500 since October 2023, when it signed its last month down. Increased tensions between Iran and Israel point to a possible extension of the conflict in the Middle East, which could invite investors to take profits. The Japanese stock market, as the futures anticipate, has opted for caution this Monday, but without any hint of panic. The Nikkei closed with a decrease of 1.06%.

Assets such as oil or gold are being the most sensitive in the prolongation and new conflicts in the Middle East. Thus, Brent is trading above $90 a barrel and has risen in four of the last few weeks, while gold has accumulated four consecutive weeks of rise. But the stock markets, including the North American one, which was being very resistant, are also beginning to doubt. The S&P 500 closed last week practically in a draw, after having dropped 1.32% in the first week of months. “April’s appearance seems more ‘heavy’,” Bankinter analysts reflected at the time.

Other US indices, such as the Dow Jones, or the Spanish Ibex 35 did end the week in the red, with falls of over 2%. The earnings season, which is gaining traction in the coming days, did not help the industrial index, which saw JP Morgan fall more than 6% after its results. This week the first quarter figures season also starts in Spain with the help of Bankinter, which will announce its numbers on April 18.

The VIX rises to levels not seen since the end of October-early November 2023

In the absence of a ruling from the European stock markets, the VIX – an index that measures stock market volatility and is used as an indicator of ‘market fear’ – already rose last week to highs not seen since the start of November and end of October 2023. In fact, one of the market’s biggest concerns was whether the international war scenario could intensify, which already supports several armed conflicts.

“The least good thing is that geostrategic risks are reactivated (Iran/Israel, above all, but not only) and that it is progressively becoming clear that the rate cuts will be late and shallow due to the strength of the economic cycle and spread of inflation during the second quarter,” the analysts of the entity chaired by María Dolores Dancausa reflected at the start of last week.

And in this scenario some assets are sending ‘risk away’ messages. The profitability of 10-year Spanish issues fell last week to 3.183%, while the interest of Americans rose for the third consecutive week due to the expectation that the rate cut will be delayed and the rise of some voices that warn . and that the United States could face a debt crisis.

* This website provides news content gathered from various internet sources. It is crucial to understand that we are not responsible for the accuracy, completeness, or reliability of the information presented Read More

Puck Henry
Puck Henry
Puck Henry is an editor for ePrimefeed covering all types of news.
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