Summary
- The S&P500 is approaching the highest valuation ever, led by tech, so, it’s a major bubble.
- The Iran war is likely to cause an inflationary shock, with high oil prices and higher yields, and it seems like the situation is escalating, making this scenario more likely.
- The Fed still has an official easing bias, but the markets are pricing hikes – so, the Fed’s official hawkish turn in June could burst the bubble.
Anna Moneymaker/Getty Images News
The ceasefire is good for tech only?
Here is the performance of the S&P500 (SPY) over the last three months, since the war in Iran started:
- The S&P500 is up by 10% since Feb 27th,
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