Robert Tu (R2)
What Do We Know About Intensifying ๐๐-๐ ธ๐๐ ฐ๐ ฝ Clash
Updated: Jan 9, 2021

๐ ฆ๐ ๐ ๐ ฃ ๐ ๐ ๐ ข ๐ ๐ ๐ ๐ ๐ ๐ ๐ ๐ ?
A military commander, Qassem Soleimani, second to only the Iranโs Supreme Leader Khamenei in power in Iran, was killed in a US airstrike at Baghdadโs airport, tensions in the Middle East have been boiling as Iran promised to retaliate and Trump promised that US would response disproportionately.

Investors are left with ponders if the attack is a harbinger to another war or just one of many dramatic events that ultimately offers buy the dip opportunity for markets to head higher.
๐ ๐ ๐ ฆ ๐ ๐ ๐ ๐ ๐ ๐ ก๐ ๐ ๐ ฃ๐ ข ๐ ก๐ ๐ ๐ ๐ ฃ?
Movements within the global equity markets have been more modest than pundits would have anticipated and remained resilient, indicating that investors seem to view that Iranโs recent retaliation strikes on US Airbase are superficial, and most importantly, this period of tension will pass. At this current juncture, in my point of view, investors are still optimistic on 2 reasons:
(1) Oil Prices only climbed higher as geopolitical tension escalates, but not spiked, which is attributable of the oil market is still having spare supply from oil exporting countries.

(2) Retaliation Strikes from Iran is perfunctory and somehow expected, so as to prevent entering a war with US which would lead to disastrous consequences.

๐ ๐ ค๐ ๐ ๐ ข ๐ ข๐ ๐ ๐ ค๐ ๐ ๐ ข๐ ฃ๐ ๐ จ
After sealing a trade truce with China, bulls in equity markets have been charging and solid economy will help Trump to secure his 2nd term of US Presidency. Nevertheless, if tension continue to escalates, the outlook for the global economy and financial markets will be gloomy thus hurting his prospects of getting re-elected.

While we foresee that geopolitical uncertainty will likely persist in the short-term, the recent market developments proved that it hasnโt been enough to turn bulls into bears.
Our narrative within our iFAST 2020 Key Investment Themes of recovery within global economic activities, major turnaround for Asian and EM equities and global semiconductor upswing and reduced political uncertainties from trade front, and our calls on ๐๐ฆ๐ช๐๐ฉ๐๐๐จ ๐จ๐ฉ๐๐ก๐ก ๐๐ฉ๐ฉ๐ง๐๐๐ฉ๐๐ซ๐ ๐ค๐ซ๐๐ง ๐๐๐ญ๐๐ ๐๐ฃ๐๐ค๐ข๐, ๐ง๐๐ข๐๐๐ฃ ๐ช๐ฃ๐๐๐๐ฃ๐๐๐.
Risk assets aside, keep up the hunt for capital preservation is equally important to build a balanced portfolio and seek for risk-adjusted return, is what you should do especially when the global economy is facing an inflection point.

(thanks to iFast Senior Investment Consultant, Sherman Tam Cheng Wei)
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