Trump's Tariffs Are Riskier, Here's What a US Entry into War Means for Investors (A fresh take)
Implications for Investors if the U.S. Enters into a Conflict
Hello again, folks! It's time to talk stocks, but not just any stocks – we're diving into the volatile world of US President Donald Trump and the potential impact on the stock market. But wait, it's not just about the Middle East crisis we're worried about.
War Ain't So Scary, Bro! Look Who's Got the Juice!
Capital market expert Stefan Riße, in a bold move, argues that if the US were to join the war between Israel and Iran, investors shouldn't panic. Why, you ask? Well, because the US's military strength is so intimidating that other countries in the region wouldn't dare to challenge the big, bad American might, Riße believes. To put it simply, we're talking chump change compared to the US Amazon Prime of military prowess.
But don't start popping champagne corks just yet! Although the US's air superiority is impressive, there could still be a bottleneck if oil tankers can't pass through the Strait of Hormuz. This four-week hiccup would mostly affect China, which buys relatively more oil from Iran compared to the West. However, China could easily compensate by importing more oil from Russia. So, all in all, the economic impact isn't expected to be catastrophic.
"We've seen this before, in the Gulf War, the Iraq War, and Israel's wars. In the end, everything calms down," says a relaxed Riße. Well, unless we're talking about Pakistan; it's a bit of a different story there. Pakistan's atomic power isn't currently a threat to the US, as the country is not directly challenging America.
The True Threat Lurks in Trump's Shadow
On the flip side, the worse threat to the stock market isn't the potential war—it's the unresolved US trade war that keeps Riße up at night. The question of whether a recession or even stagflation is looming should send shivers down your spine, as Riße emphasizes.
The trade war is already causing problems, with farm workers missing for the harvest season due to the uncertainty. Investment is faltering as well, thanks to fears of further tariffs and Trump's migration policy.
"I wouldn't personally sell stocks because of the Iran war," says Riße. "But we generally have a more cautious stance at the moment." Large titles and indices are relatively highly valued at the moment, so Riße expects limited growth in the foreseeable future.
Source: ntv.de
- Stock Prices
- USA
- Iran
- Middle East Conflict
- Despite the anticipation surrounding the potential war between Israel and Iran, American business, finance, and political experts suggest that investors should primarily focus on the risk factors associated with Trump's employment and community policies, as well as the ongoing trade war, given their potential impact on the stock market and general-news landscape.
- As the Middle East conflict unfolds, it is apparent that the general economic impact may not be catastrophic; however, the uncertainty and potential business disruptions caused by Trump's employment and community policies, as well as the on-going trade war, pose a more imminent threat to the US stock market and the global economy.
