The 3 aspects of quality

Geopolitical tensions have lifted oil prices, sent U.S. stocks slightly lower and driven flows into the safety of the U.S. dollar, which has strengthened versus peers. While a weaker dollar previously supported international equity outperformance, dollar stabilization now suggests that tailwind is fading, underscoring the importance of diversification across regions and asset classes.

The Strait of Hormuz, which moves about 20% of global oil, has seen many ships that normally travel through it curtail their activity. Consequently, WTI oil was up over 36% in the five days after the oil supply shock began. Yet equities barely budged, signaling a temporary supply shock, not a larger crisis. Historically, after similar price spikes equities tend to move higher while oil prices decline — further evidence for avoiding emotion-driven investing.

Checkpoints is a comprehensive monthly chartbook highlighting major top-of-mind themes that could shape financial markets in the near term. In addition to the broader macroeconomic discussion, Checkpoints delivers detailed views on major asset classes, including global equities, fixed income and real assets.