S&P 500: Expect Post-Election Geopolitical Escalation
- 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.
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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
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