The US and Iran agreed to a two-week ceasefire on Tuesday evening, not long after President Trump had warned Iran that “a civilisation will die tonight”.  Perhaps this belligerent rhetoric was effective, or perhaps not.  In any event, the bombing stopped – or at least most of it – on Tuesday evening as a fragile two-week ceasefire was agreed and started.  US and Iranian delegations are in Islamabad this weekend negotiating what will hopefully be a permanent solution to this c

Markets deteriorated further as the US threats amount to nothing more than deferred deadlines as Iran digs in its heels. Higher oil prices and an unclear picture of how this war might play out is rattling nearly all corners of the financial markets.

Global stocks and bonds continued to spiral down as the war in the Middle East continues with no end in sight. In this update, I discuss the Fed's dilemma in a stagflation scenario, and how oil prices are likely to affect both headline and cor inflation.

Investors got hammered again this week with few places to hide. Having said this, it could be worse. The Trump Administration continues to release conflicting information about the status of the war, but it is clear that the Iranians are not about to capitulate. This is causing all sorts of problems with the oil market, and this in turn is splattering both global stocks and bonds.

War breaks out with rather significant effects on the global economy, including sharply higher oil prices and increasing inflation expectations. This filtered through to stocks and bonds, both of which took a beating this week.

US stocks lost ground and are performing poorly YtD, especially compared to stocks in the UK, Europe and Japan, all of which closed at record highs on Friday. US Treasuries suddenly have a safe haven bid, with the yield on the 10y finally dropping below 4%. Gold remains strongly bid, Bitcoin remains largely without a bid.

Stocks eked out small gains and US Treasuries had small losses this past week, with plenty of economic news – especially on Friday – largely resulting in a "meh" response. European stocks closed at record highs, while gold and the greenback gained ground. Bitcoin continued to suffer losses.

I am going to start the update this week by focusing on markets, which is probably what most of my readers care most about.  The table below is a summary of the week. As far as equities, portfolio allocations so far this year have favoured value stocks over growth stocks in the U.S., and international stocks over US stocks on a macro global basis.    U.S. stock rotation: out of growth and into value :  As far as U.S. stocks, the culprit continues to be tech shares.  As the “l

It was a holiday shortened, rather lacklustre week in markets. Good that 2022 is over. FY returns were poor across equities and bonds.