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Speaker 1: We've moved from tariff headline shockers and then we've moved

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Speaker 1: sadly into geopolitical headline shockers. How are global investors thinking

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Speaker 1: about this that thus far? How can they navigate this uncertainty?

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Speaker 1: We've got Sam Dickey from Fisher Funds with us to

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Speaker 1: explain this. Hey Sam, here, that's it going very well?

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Speaker 1: Thank you. So we're a week into this thing now

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Speaker 1: between Israel and Iran. How do you see the global

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Speaker 1: investors thinking about things? How are the asset markets and

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Speaker 1: the equities and bonds and commodities and stuff responding to this.

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Speaker 2: Yes, it's always awkward talking about a war or real

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Speaker 2: human tragedy through the lens of asset markets, and sadly,

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Speaker 2: geopolitical risk is something that you and I to regularly

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Speaker 2: talk about. So if we look at equity markets, currencies,

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Speaker 2: and commodity prices since the attacks, the local stock market

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Speaker 2: of Tel Aviv, it fell initially, but it's now actually

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Speaker 2: up two percent since then. The Iranian stock market is

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Speaker 2: hard to get a beat on as it's sanctioned by Bloomberg,

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Speaker 2: but it's a little weaker. Globally, equities have been very resilient.

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Speaker 2: The only interesting thing I'd call out there is while US,

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Speaker 2: Ozzie and New Zealand markets are near flow, that Europe

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Speaker 2: is a decent amount weaker because it's more exposed to

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Speaker 2: an oil price shock as it relies more heavily on

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Speaker 2: imported oil, and it's simply closer to the situation and

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Speaker 2: oil is probably worth thirty seconds. It's still up fifteen

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Speaker 2: percent from this time last week, so it hasn't calmed down,

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Speaker 2: and that's because it run itself was five percent of

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Speaker 2: global oil exports, which is meaningful, especially when you considered

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Speaker 2: the oil market is always one percent either side of

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Speaker 2: being in balance. And then of course people are pricing

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Speaker 2: in a small probability that the conflict escalates in the

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Speaker 2: Middle East accounts for fifty percent of global oil exports.

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Speaker 3: SAM.

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Speaker 1: In the past, when we've had similar situations like this,

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Speaker 1: how have the markets responded.

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Speaker 2: Yeah, So you and I talked in February twenty twenty

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Speaker 2: two when Russia invaded Ukraine, and we talked in October

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Speaker 2: twenty twenty three when Harmus attacked Israel and the market

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Speaker 2: did not behave the way everyone thought it would back then.

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Speaker 2: So with Ukraine, the main impact was expected to be

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Speaker 2: European gas prices or energy prices, because remember, europe gas

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Speaker 2: prices face the perfect storm of the threat of Russian

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Speaker 2: supplies being cut off and a lack of alternatives. However,

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Speaker 2: after an initial spike, European gas prices fell eighty percent

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Speaker 2: from their peaks, driven by.

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Speaker 3: Excess supply of a demand.

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Speaker 2: Equally, after the Harmless attacks, oil prices did rise ten

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Speaker 2: percent initially, but a month or two later they were

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Speaker 2: much lower. So the pointers markets typically overreact in the

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Speaker 2: short term, but normalizing the medium term, and when it

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Speaker 2: comes to commodities, there's that famous saying that the best

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Speaker 2: cure for high commodity prices is high commodity prices. In

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Speaker 2: other words, oil spikes higher at the margin that will

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Speaker 2: slow demand and at the margin that'll encourage a marginal

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Speaker 2: barrel of oil into the market.

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Speaker 1: Interesting, yeah, And so what does this all mean for investors?

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Speaker 2: Then it just really hard to You shouldn't construct your

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Speaker 2: long term portfolio based around these painful events.

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Speaker 3: It's they're really hard to predict.

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Speaker 2: If we zoom out, what drives equity markets over the

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Speaker 2: medium term is corporate earnings growth and economic growth, which

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Speaker 2: drives corporate earnings growth is still fairly solid.

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Speaker 3: As you and I have been discussing in the last few.

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Speaker 2: Weeks, and Powell said overnight, the US jobs market is

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Speaker 2: still robust. But the final point I'll make here, and

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Speaker 2: you and I have been discussing this for a couple

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Speaker 2: of weeks, is the twenty two percent bounce in the

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Speaker 2: US equity market the last few weeks means the risks.

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Speaker 3: Are now a little bit more balanced.

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Speaker 1: From here, Aunte Josh, Hey, thank you very much. Sam,

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Speaker 1: appreciate and enjoy your long weekend that Sam Dickeye.

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Speaker 2: Officier funds for more from hither Duplessy Allen Drive. Listen

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