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Speaker 1: With us. Now is Jeremy Hutton, Milford Asset Management. Hi Jeremy, Hi,

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Speaker 1: Heather he doing, I'm very well, thank you. Now, all

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Speaker 1: the financial market's attention has been on the Middle East.

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Speaker 1: What's going on there. I'd imagine oil and energy prices

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Speaker 1: are leading the moves across many asset classes globally.

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Speaker 2: Yeah, yeah, that's right. There are a few moving parts here.

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Speaker 2: But unsurprisingly, oil has shot up aggressively over the past

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Speaker 2: few days. Recruite oils up almost fifteen percent since the

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Speaker 2: Iranian strikes began on the weekend. Now, this is important

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Speaker 2: for many areas of financial markets, as it does flow

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Speaker 2: through into many areas. But I suppose all the markets

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Speaker 2: are trying to grapple with at the moment is how

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Speaker 2: long this disruption in energy delivery is going to be.

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Speaker 2: And I suppose that's really important for global inflation and

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Speaker 2: for how long we could have a little spike up

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Speaker 2: of inflation. And we know the straight up for moves

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Speaker 2: by Iran that carries about twenty percent of the world's

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Speaker 2: daily oil supply. And if this stays closed or impacted

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Speaker 2: for a while, then we could get some persistent higher inflation,

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Speaker 2: will get high costs flowing through into economies, and central

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Speaker 2: banks may have to increase interest rates and response to this,

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Speaker 2: And this could happen at a time where economic activity

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Speaker 2: is falling, and that's what the market fares is a

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Speaker 2: slightly ugly stakeflationary environment. Now Iran they've declared the straight closed.

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Speaker 2: You know, Trump was trying very hard this morning to

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Speaker 2: reassure markets and reopen it. But I think many countries

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Speaker 2: around the world will want this energy flow to continue

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Speaker 2: pretty soon.

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Speaker 1: So how have the major market indicy has been faring

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Speaker 1: so far?

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Speaker 2: At a headline level in the US markets, the SMP

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Speaker 2: five hundred and NASDAK, they've both opened down around one percent,

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Speaker 2: which doesn't seem like much given the situation, But below

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Speaker 2: the surface in certain sectors there's been some huge shifts

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Speaker 2: and a lot of volatility, but I suppose the mood

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Speaker 2: has generally been very risk off. Some of the economically

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Speaker 2: sensitive sectors like airlines, travel tourism unsurprisingly has been hit.

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Speaker 2: Commodities that are linked to economic growth have also fallen.

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Speaker 2: The US stoller. There's been plenty of discussion on this,

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Speaker 2: but at the moment, it's still acting as we expected

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Speaker 2: it as a safe haven and gold is probably the

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Speaker 2: most interesting one. I mean, this is down sharply. Normally

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Speaker 2: gold would be up in an event like this, but

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Speaker 2: I suppose it's given how hot it's been, how much

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Speaker 2: positioning and risk has moved into gold, it's actually moved

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Speaker 2: the other way. In this risk of environment.

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Speaker 1: I see the europe and the Asian markets are getting

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Speaker 1: hit a lot harder.

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Speaker 2: Yeah, this is arguably the story that markets are a

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Speaker 2: little bit more concerned about. I mean the European and

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Speaker 2: Japanese main indexes they're both down of five percent, and

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Speaker 2: Korea that's down around seven percent. And again this is

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Speaker 2: linked to energy and the flow of LNG and gas

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Speaker 2: this time. But it does show that how reliant these

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Speaker 2: countries are on Middle Eastern energy, and a lot more

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Speaker 2: so than the US. You're seeing spot gas prices in

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Speaker 2: Europe rise very sharply, and this is sort of reminiscent

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Speaker 2: of the Russia Ukrain crisis in twenty twenty two. And

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Speaker 2: then Japan and Korea. You know, they've got some very

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Speaker 2: valuable industrial and chip production that relies on the flow

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Speaker 2: of this Middle Eastern gas. So investors will get a

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Speaker 2: little bit more nervous on these markets if disruption continues

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Speaker 2: for an extended period of time.

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Speaker 1: Jeremy, can we quick run down on how we're doing

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Speaker 1: here on the INSIDEX.

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Speaker 2: Yeah, Insietet's been a little holding up recently well, but

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Speaker 2: it is still down one and a half percent over

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Speaker 2: the past few days and travel stocks are leading leading

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Speaker 2: the falls like Circle and tourism holdings Iman. In fact,

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Speaker 2: there are only a few companies in the green so

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Speaker 2: far this month or over the last few days. So yes,

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Speaker 2: the INSIDEX under a bit of pressure as well.

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Speaker 1: Good stuff, mate, Good to talk to you. Thank you,

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Speaker 1: Jeremy Hautton, Milford Asset Management. For more from Hither Duplessy

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Speaker 1: Alan Drive, listen live to news talks it'd be from

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