Netherlands, Intermediary
Changechevron_rightSustainable Investing
Stewardship Principles
Investment Solutions
Funds
The views expressed are those of the author at the time of writing. Other teams may hold different views and make different investment decisions. The value of your investment may become worth more or less than at the time of original investment. While any third-party data used is considered reliable, its accuracy is not guaranteed. For professional, institutional, or accredited investors only.
Risks are now clearly elevated, but I think it’s unlikely this single attack by Iran, and Israel’s limited response thus far, spreads immediately to a wider regional conflict. Iran’s actions were well telegraphed, and the relatively minor impact has allowed Israel to temper its immediate response while the US and other regional players intensify diplomacy in the background. Statements from both Tehran and the US indicate that further escalation is not desired; though, of course, Israel’s government will have a final say.
While I see incentives for all sides to “manage through this,” the number of complex variables in play across the region could credibly trigger a significant geopolitical event over the next several weeks. To name a few, these include:
The risk here is an escalation cycle that neither side can effectively curtail. From a markets perspective, the key takeaway is that we have moved one step closer to the worst-case scenario of a direct and widening Iran/Israel war that brings in the US and sparks significant energy, inflation, and central bank policy implications.
The ongoing leadership transition in Iran means there’s a lot of behind-the-scenes maneuvering in Tehran, and therefore, less scope for Iranian leaders to look the other way if this continues to escalate.
There continues to be a real desire by some inside the Netanyahu government to address the Iran threat “once and for all.” In this line of thinking, the events of October 7 offer hardliners an unprecedented opportunity to deal a significant blow first to Hamas (a work in progress), second to Hezbollah (arrows continue to point lower here), and finally, to Iran, especially with the existential risk of Iran’s nuclear issue hovering in the background. These attacks will intensify this hawkish position.
Thus far, the Biden administration has been mostly successful in deterring these hardline approaches (including the latest developments), but that gets harder every day.
Great-power competition dynamics are running through all of this — especially with Iran as a key supplier of drones to Russia’s Ukraine war effort, and China such a critical economic and energy partner to Tehran, to say nothing of US relationships with Israel and other regional actors.
Policymakers will use these attacks as yet another data point that underscores how we’re now living through the most complex, dangerous, and unpredictable geopolitical environment in decades. This will reinforce a policy direction that favors security writ large, as well as the continuing protection and promotion of sectors deemed strategic in this deepening and increasingly global national security competition.
Expert
Fed stays its course while acknowledging brewing winds of change
Continue readingTrump 2.0: US election market impacts
Continue readingIt’s different this time: Trump faces challenging geopolitical dynamics
Continue readingBy
Trump win likely to accelerate macro trends already in motion
Continue readingWhat do the US election results mean for investors?
Continue readingMultiple authors
US election special: which investment themes win at the polls?
Continue readingMultiple authors
URL References
Related Insights
Stay up to date with the latest market insights and our point of view.
You've been subscribed
Thank you for subscribing. You can manage your subscription using the links provided in any of our subscription emails.
Fed stays its course while acknowledging brewing winds of change
Our expert examines the underlying data which drove the Fed to stay its rate-cutting course.
Trump 2.0: US election market impacts
In the wake of the US election, macro strategists Juhi Dhawan and Michael Medeiros join host Thomas Mucha to discuss the market, policy, and geopolitical implications of Trump 2.0.
It’s different this time: Trump faces challenging geopolitical dynamics
Our expert explores how Trump may approach the heightened geopolitical challenges his second administration faces.
By
Trump win likely to accelerate macro trends already in motion
The US election results could have significant implications for the global economy and markets. To help you understand these changes, US Macro Strategist Mike Medeiros provides a thorough analysis and discusses the potential market impacts.
What do the US election results mean for investors?
The US election results could have significant implications for the global economy and capital markets. Our panel of experts provides a thorough analysis of what happened and explores potential market impacts.
Multiple authors
Pre-election ideas for investors: Lean into what you know (not what you don’t)
Our expert offers investable ideas based on known macro and market conditions, rather than speculation.
Multiple authors
US election special: which investment themes win at the polls?
The upcoming US election could be one of the most momentous in recent history. How could the result affect different investment themes? Our thematic team investigate the potential implications for investors.
Multiple authors
Unearthing the unseen in geopolitics
Unearthing the unseen in geopolitics. Watch Geopolitical Strategist Thomas Mucha delve into the investment impact of structural geopolitical shifts and share his latest take on the upcoming US election.
Sahm rules are meant to be broken
Fed easing is finally here and fundamentals remain favorable. But what about that election? Members of our Investment Strategy & Solutions Group offer their outlook, including their latest views on equities, bonds, and commodities.
Multiple authors
An active investor’s guide to growth equities
Our experts offer their view on the current economic environment, explore best practices for investing in high-quality growth equities, and highlight where they see opportunity now.
Multiple authors
The US elections through the eyes of a European investor
Supriya Menon, Head of Multi-Asset Strategy – EMEA, explores what potentially material implications upcoming US elections could have for European investors and identifies key areas to monitor closely.
URL References
Related Insights
© Copyright 2024 Wellington Management Europe GmbH. All rights reserved.
WELLINGTON MANAGEMENT FUNDS ® is a registered service mark of Wellington Group Holdings LLP.
Wellington Management Europe GmbH. Registered office: Bockenheimer Landstraße 43-47, 60325 Frankfurt am Main, Germany. T: +49-69-677761-500. VAT-number DE 326304943 (Umsatzsteuer-Identifikationsnummer) Commercial Register of the local court Frankfurt am Main (Handelsregister des Amtsgericht Frankfurt am Main), HRB 115460 .
Wellington Management Europe GmbH, is authorised and regulated by the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht)
For professional investors and intermediaries only. This content is not suitable for a retail audience.
we’d love your feedback!
Help us improve our website. For every short survey taken, we give 2 to the Wellington Management UK Foundation to support educational charities helping economically disadvantaged children in EMEA.
Pre-election ideas for investors: Lean into what you know (not what you don’t)
Continue readingMultiple authors