Kospi Signals Bull Market Instead of War Fears? "Iran Strike Could Be a Positive Catalyst"

Citing Wall Street Experts, Foreign Media Reports: "Oil Prices Likely to Fall Within Months"

"Correction Phase Unlikely to Undermine Growth Trend"

As the United States has launched a military operation against Iran, there are projections that, if the attack ends in the short term, it could actually become a boon for the global economy and stock markets.

Ed Yardeni, President of Yardeni Research. CNBC

On March 1 (local time), international outlets including CNBC reported that Ed Yardeni, President of Yardeni Research, provided this analysis. Yardeni, known as one of Wall Street’s leading bulls, first coined the term “Bond Vigilantes.”

He stated, “With the U.S. attack having effectively neutralized Iran’s navy, the threat of a blockade in the Strait of Hormuz has been greatly reduced.” He added, “This could potentially be positive for the economy and for investors, as it would significantly lower geopolitical risks in the Middle East after the war concludes.” If oil prices fall following a ceasefire, U.S. inflation and gasoline prices would also decrease, which would expand consumer spending and have a positive impact on the global economy and stock markets, he explained.

He particularly interpreted the lack of an official blockade of the Strait of Hormuz so far as likely due to the U.S. and Israel having neutralized the Iranian navy. Yardeni noted, “It is unlikely that the two countries damaged Iran’s oil production and export facilities,” and analyzed that “if the conflict is short-lived, oil prices are likely to decline in the coming months.” He further predicted that this attack could help bring U.S. consumer prices down to the Federal Reserve’s 2% target level.

Yardeni also suggested that if Middle East risks subside in the short term, the upward trend in gold prices could be limited. He forecasted a year-end price target for gold of $6,000 per troy ounce (approximately 8.77 million won) and $10,000 (about 14.61 million won) per troy ounce by 2030.

He assessed the probability of a “Roaring 2020s” scenario at 60%. The “Roaring 2020s” refers to a scenario in which the 2020s enter a long-term boom phase based on technological innovation and productivity gains. Accordingly, he maintained his previous target for the S&P 500, projecting 7,700 by the end of this year and 10,000 by the end of 2029.

He assigned a 20% probability to the possibility of the U.S. economy “overheating” this year. Although the stock market has undergone some corrections this year, and overheating of artificial intelligence (AI)-related stocks has somewhat moderated, he explained that it is difficult to view this as a structural collapse. He also put the probability of a sharp market downturn at 20%. As the greatest risk factor, he pointed to the U.S. private credit market. He believes that although Middle East-driven geopolitical risks may ease under the assumption of a short-term conflict, the risk of liquidity tightening in the private credit market is rising.

However, he added that even if a correction phase emerges, it could instead present a buying opportunity for long-term investors, and that it is unlikely the market is entering a phase that would undermine the overall structural growth trend.

This content was produced with the assistance of AI translation services.