Markets are largely unfazed by U.S. airstrikes on Iran, with stocks steady and oil prices pulling back. While risks remain, past geopolitical events have had a limited long-term impact on equities, reports Michael Msika and Phil Serafino of Bloomberg. A significant oil surge or escalation could change that. Corporate debt issuance continues, showing investor confidence for now. They write:
As far as stock investors are concerned, the US air strikes on Iran over the weekend are a non-event, at least for now.
Stock-index futures are trading a touch higher after dropping as much as 1% overnight. European indexes are little changed, while oil erased much of its earlier advance.
The risks remain high from the Iran conflict, yet, as Morgan Stanley’s Michael Wilson points out, geopolitical events tend not to have a lasting effect on stock prices. […]
For Wilson and his team, an oil price surge would have to be significant to create a bear case scenario. Based on their analysis, oil would need to hit $120 a barrel before posing a threat to the business cycle.
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