The Stockholm Stock Exchange has fallen almost 5 percent in the past week and is now at its lowest level this year. The situation is just as bad for the broad S&P 500 index on the New York Stock Exchange.
As a new trading week awaits, the situation is tense to say the least, based on the war with Iran and the oil price, which has risen to $112 per barrel.
An escalation
On Friday, President Trump said he was “considering starting to scale back the military effort.” This weekend, he threatened new attacks on Iran’s energy infrastructure if the Strait of Hormuz was not opened within 48 hours.
"I probably see this as an escalation precisely because he is threatening critical points like infrastructure. That makes it difficult. Trump turns every five minutes," Jon Arnell, investment manager at von Euler & Partners, told TT.
The escalation has prompted a stock analyst interviewed by Reuters to warn of a Black Monday on the world's stock markets, a reference to Monday, October 19, 1987, when the world's stock markets fell dramatically.
"Yes, I've seen a lot of comments about this. On Saturday, things looked very good on the futures and what's being traded over the weekend, then it turned around. There's a risk that we open quite down in Asia, but it's really hard to say," Jon Arnell said about Monday's development.
Clear declines
One factor, he points out, is that March has already seen clear declines. At the same time, the market had assessed that the conflict would be temporary, but now it is entering its fourth week.
Now we are actually seeing real effects; we see that in the price of gasoline and in canceled flights, for example. I think of how inflation rose in 2022; then consumers took a step back and became cautious.
What do you think?