With the S&P 500 (SPX) up by over 12% since March 30, investors should look past the U.S.-Iran war, according to Max Kettner, HSBC’s Chief Multi-Asset Strategist.
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Trade QQQ with leverageKettner is “max bullish” on stocks and points out that the benchmark index has historically traded 2.5% higher one month after geopolitical escalations that have unfolded since 1990. “If anything, we’d argue the only unusual thing this time around is that after the initial escalations sold off by more and longer compared to what history tells us,” he wrote in a note to clients.
Kettner Downplays Iran War Risk, Sees Dip-Buying Opportunities
Despite surging oil and gas prices, Kettner argues that the U.S.-Iran war poses no greater economic threat than previous geopolitical escalations. He also believes that the worst of the war is already over, citing falling gas prices and easing financial conditions. Prices at the pump have fallen for eight consecutive days and currently sit at $4.02 per gallon.
Kettner acknowledges that headlines in recent days, including accusations of ceasefire violations from both sides, have not been encouraging. However, he views these developments as opportunities to buy the dip.