Recent events have included disabling of Iranian-flagged tankers by a U.S. jet, Starmer's victory in UK local elections, yen's rise from government interventions, and U.S. consumer confidence at a record low due to soaring prices and war-related concerns.
jolted hopes for a deal to end the Middle East war and reopen the crucial waterway. While European bourses retreated, the S&P 500 and Nasdaq indices both pushed to fresh records on solid"No negative news sticks to this bull market, and it just keeps working its way higher," said CFRA Research's Sam Stovall.
A US fighter jet disabled two Iranian-flagged tankers to enforce a port blockade on Friday, prompting retaliatory attacks from Iran. The latest incident came after another flare-up overnight in the strait. But US consumer confidence was at an all-time low according to a University of Michigan survey, with Americans weighed down by concerns about high prices and the fallout of the US-Israel war on Iran.
Stovall cited both the consumer confidence figure and the brittle conditions in the Middle East as headwinds the market has shrugged, but added,"I would not be surprised if we do see some digestion of recent gains take place in the near-term.
"Bret Kenwell, eToro's US investment analyst, noted that if the labour market and broader economy continue to hold up as rising energy prices fan inflation, the Fed will have less justification to cut interest rates. "In other words, good news may actually be good news again - just not for investors hoping the Fed rides in with quick rate cuts," he said.
Investors often consider bad economic news to be good news in the sense it increases chances of interest rate cuts. POUND HOLDS UP The British pound held up as Keir Starmer vowed to carry on as UK prime minister after his Labour Party suffered big losses to the hard-right in local elections.scandal over Peter MandelsonThe prime minister has also failed to fulfil his main promise of spurring economic growth, with impatient Britons still suffering a cost-of-living crisis, including from high energy prices.
Elsewhere on Friday, the yen firmed after Japanese media reported that authorities had spent around US$64 billion since last week propping up the currency. The market interventions reportedly began on April 30 when the yen weakened to near 160 per US dollar, the lowest in almost two years. Since then there have been several spikes in the value of the Japanese currency, sparking speculation of further moves by the government.
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Middle East War U.S. Fighter Jet Attack On Iranian Vessels Keir Starmer British Pound Yen Energy Prices Cost-Of-Living Spurring Economic Growth Economic Recovery U.S. Dollar Britons
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