Key insights
- Blackrock and Apollo warn of downside risks to growth and upside risks to inflation stemming from the Iran war. Concerns include potential oil spikes to $150/barrel due to supply chain disruptions and increased recession risk as US consumers show signs of distress. This suggests a bearish outlook for US equities due to stagflationary pressures.
Takeaways - stemming from the Iran war, which are likely to weigh on growth and drive inflation higher.
- Kapito warned that growth could be hit and inflation may rise even if the war ends soon, and that oil may still spike to $150 a barrel as disrupted supply chains take time to return to full capacity. * Apollo Global Management’s President Jim Zelter also cautioned about heightened risks of a US recession and to the credit cycle from a prolonged conflict, saying US consumers are already showing signs of distress.