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.

We expect market leadership to broaden beyond mega-cap tech in U.S. equity markets. For growth heavy portfolios, the narrowing gap between growth and value signals a potential need to add value investments to reduce concentration risk and improve diversification.

Tensions between the U.S./Israel and Iran have recently boiled over into a military conflict, which has given many investors the jitters. However, our research shows that equity market pullbacks resulting from geopolitical events are often short lived with the S&P 500 typically higher in the months following these events.