Investor Insights

I know everyone is focused on Iran and oil at the moment, but when the conflict eventually ends, investors will cheer…and return to the themes that previously dominated markets. And that theme is artificial intelligence (AI).

Pivots galore Few global macroeconomists have carried as much recent optimism as Ed Yardeni, who, as president of Yardeni Research, has spent the better part of this decade championing a ‘Roaring 2020s’ thesis – a nod to the roaring 1920s, on the back of productivity gains, technological innovation, and a resilient American consumer, Yardeni’s thesis has included a very bullish end…

The question on the back of every analyst’s mind is when will the war end. Sure they’re promoting their key picks and hosting company briefings but there’s a cloud hanging over them and which they’re unable to escape. For those analysts confronting the conflict head-on will be looking for any signal in the noise.

While Israel pursues a high-stakes military campaign and President Trump plays ‘Deal or No Deal” with an Iranian regime that might not even have a leader in charge, investors are doing the only sensible thing left: Hiding. With the Islamic Revolutionary Guard Corps (IRGC)’s ‘asymmetric’ threat to the Strait of Hormuz continuing and the U. S.

As Agentic artificial intelligence (AI)’s threat to jobs spreads ever wider, the concept of Universal Basic Income (UBI) is shifting from theory to, frighteningly, a central pillar of Silicon Valley’s vision for our future.

I know everyone, at the moment, is focused on the Middle East, oil prices and inflation, and some are also considering the second and third-order effects on, for example, plastic and food supply chains.

I was fascinated by this morning’s Australian Financial Review (AFR) article, which pointed out markets appear to be disconnected from reality in the Middle East.

When investors are confident, greater risk is taken, greater debt levels are serviced, and greater liquidity is prevalent. And the opposite is also true.   The response to a loss of confidence is to reduce risk, pay down debt, and “batten down the hatches”. Liquidity can quickly get tight.

I realise the war in the Middle East and fuel prices are dominating headlines and investors’ current concerns, however, there will come a time when markets and conversation will return to those topics that made headlines before Trump triggered the latest conflict in the Middle East.

Throughout history, there’s been a tidal quality to the flow of capital because there is a tidal quality to the human condition. Every new technology, after welding on its inventors, attracts its devotees who, believing – often correctly – the tech will change the world, become the pied pipers for many more investors.

In a fascinating Wall Street Journal (WSJ) article, published this week, the U. S. state of Wyoming reportedly bought 2,312 ounces of gold in December after passing a law requiring the state’s investment portfolio to add precious metals as a hedge against economic turmoil.

With the International Energy Agency’s 32 member countries agreeing to release 400 million barrels of oil, the largest ever since its creation in the 1970s, to lower crude prices from the war with Iran, it might inspire some investors to believe the threat to markets has been assuaged.