Matt Orton from Raymond James Investments noted that while there was negative reaction to the news, it was better than expected. “Investors were bracing for some hostility given the recent US-Iran talks. Crude oil prices have recovered from the worst jump and some Asian futures have recovered. The key question is what happens in the Strait of Hormuz, which will guide energy prices in the coming weeks.”
Regarding commodities, Orton explained that markets are already exposed to a lot of risk. “Gold is bidding well and crude oil is already at a premium of $10 per barrel. There is not much room for growth without further disruptions, but the presence of the US Navy may limit the period,” he said.
The strategist also weighed in on the recent US ban on AI firm Anthropic, which has raised questions about the return on AI investment. “Anthropic’s cloud code is powerful, but the market is facing two narratives: money spent on AI may not yield an immediate ROI, yet AI is being implemented quickly. Investors should weigh where the trade is going. For now, I’m focused on companies that benefit from AI integration and capex spending,” Orton said.
Looking at India, Orton highlighted the country’s attractiveness to international investors. “India has a low correlation with the S&P 500. Even during global risk-off scenarios, India performed well in 2022 and 2023. Selectivity is key, but regardless of geopolitical tensions, there are high-quality investments in India and globally.”
As the week unfolds, market watchers will continue to monitor crude prices, the Strait of Hormuz, and investor sentiment. For now, cautious preparations seem to have helped global markets weather the first shocks of geopolitical tensions.
(Tags translated) Matt Orton
