Stock Market Recovers from the U.S. – Iran Conflict

The stock market is getting back on track after Iran’s missile attacks caused an uproar on Tuesday evening. Major averages bounced back after the U.S. President Donald Trump announced that the war with Iran wouldn’t begin. Nevertheless, analysts fear that 2020 brings many uncertainties. There are so many impending events, which will ultimately influence the market.

Tensions with Iran haven’t had any lasting effect on the stock market yet. VIX stock, also known as “fear gauge,” was changed insignificantly on Friday, which means that investors stay calm. But the U.S. gave Iran new sanctions. There is always a possibility that hostility will escalate.

So far, conflict provoked oil prices to elevate for a short period. Still, Moody’s Investor Service cautions that if tension continues, it will cause more substantial changes to the global economy. Increased oil prices may be beneficial for the energy sector, but shipping and manufacturing companies will lose part of their profits if gasoline prices advance.

Yung-Yu Ma, the chief investment strategist at BMO Wealth Management, says that if prices rise at the pump, people will have to shell out more money for gas. That could also raise concerns about buyers’ spending power.

Analysts Fear that the New Year will be Hard for Investors

Tensions arise as the signing of a “Phase 1” trade deal with China nears, considering the two sides haven’t finalized a deal yet. And don’t forget that a presidential election is coming in the U.S. Ephie Coumanakos, co-founder and managing partner of Concord Financial Group, predicts a “volatile year” and advises investors to “stay the course.”

It seems that the conflict with Iran won’t influence heavily several banks, such as Wells Fargo, JPMorgan Chase, and Citigroup very. However, analysts say that corporations still need to show their profit growth to condone high prices on the stock market.