SPI: The market must price in two different wars

Golden Ten Data reported on March 25 that investors appeared to welcome reports of easing tensions in the Middle East, though some questioned whether this could truly signal substantial relief from the conflict that has shaken global financial markets. Stephen Innes, managing partner at SPI Asset Management, stated: "This reaction feels very familiar, almost as if it’s been choreographed, like we’ve seen similar scenarios play out before—this is the ultimate expression of a reaction window trade. It feels as if I have to price two wars at once. One is the surface-level conflict, such as the Israeli television station proposing a one-month ceasefire mechanism, with Washington engaging in backdoor diplomacy, and traders immediately selling oil futures and chasing stock futures higher. The other war, however, isn’t over yet." He added, "The market is enticing you to sell oil and take on risk, as if an easing of tensions is just within reach. But from an overall structural perspective, for equity investors, it’s clearly not a smooth path ahead."