Oil prices are jumping Wednesday in the wake of President Donald Trump’s decision to withdraw from an Iran nuclear deal.
But stock markets and safety plays aren’t making huge moves at the moment following Trump’s much-anticipated Tuesday announcement[1].
Below are some of the initial reactions from analysts.
• “Keep in mind that President Trump has a record of making strong statements and then giving ground on implementation, such as earlier this year when higher tariffs on steel were followed by exemptions for allies. ... Overall, we believe equity markets can withstand modestly higher oil prices.” — Mark Haefele, global chief investment officer at UBS Wealth Management, in a note
• “Treasury Secretary Steven Mnuchin said the purpose of withdrawing from the deal is not to isolate Iran, but rather to get Iran and the Europeans ‘to enter into a new agreement’ that will be more to Trump’s liking. So this whole move may be just like Trump’s threat to withdraw from Nafta or NATO: A way to put pressure on the other sides in the negotiations to offer concessions to the U.S.” — Marshall Gittler, chief strategist at ACLS Global, in a note[2]
• “Equity markets ESM8, +0.40%[3] appear relatively sanguine for the time being. ... A lot of this risk was already priced in, but we now await developments with caution. Although they seem to have batted this away with relative ease, it would be no surprise to see investors start to take more risk off the table as events unfold.” — Neil Wilson, chief market analyst at Markets.com, in a note
• “The oil markets CLM8, +2.90%[5] spun into an upward spiral following Donald Trump’s decision to withdraw the U.S. from the Iran nuclear deal, a move which could mean renewed sanctions on Iran and a disruption of the global oil supply flow.” — Fiona Cincotta, senior market analyst at City Index, in a note[4]
• “Despite a big build-up to the announcement, the markets have pretty much shrugged off the news. ... The move by Trump is a fresh blow to allies in Europe who had been trying to convince the U.S. president to stay in the Iran deal and comes hot on the heels of the steel-tariff issues with the EU. Trump is certainly leaving his mark, as his U.S. protectionist policies leave him driving a hard bargain. Most likely [it’s] the same hard approach that we will see him take with North Korea when he meets Kim Jong Un.” — Jasper Lawler, head of research at London Capital Group,...