S&P 500: Expect Post-Election Geopolitical Escalation

Nov. 07, 2024 7:19 AM ETS&P 500 Index (SP500), CL1:COM4 Comments
Damir Tokic profile picture
Damir Tokic
10.31K Followers
(7min)

Summary

  • The Israel-Iran war is likely to escalate now that the US elections are over.
  • As a result, if Israel strikes the Iran's energy/nuclear infrastructure, the price of oil could spike and trigger a stagflationary shock, like in 1974.
  • Thus, the S&P 500 is still facing liquidity risk due to the geopolitical escalation, even as the US election risk is eliminated.

USA, Israel and Iran Chess Standoff

theasis/iStock via Getty Images

The liquidity risk(s)

The stock market was facing the liquidity risk due to two interrelated events: 1) the possibility of a contested US election, and 2) the possibility of geopolitical escalation, with Israel striking the Iran's nuclear and energy

This article was written by

Damir Tokic profile picture
10.31K Followers
Commodity Trading Adviser (CTA), member of National Futures Association. Professor of Finance, research on Global-macro issues. Editor-in-Chief, Journal of Corporate Accounting and Finance.

Analyst’s Disclosure: I/we have a beneficial short position in the shares of SPX either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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