“Markets don’t fear war. They fear uncertainty”
– widely held investment aphorism

The Through Line: Capital markets have a long history of looking past geopolitical events. An initial (and often sharp) risk-off reaction is typically followed by recovery as investors return to focusing on fundamentals. Sorting the intermediate- and longer-term implications of the current Middle East conflict will take time and nuance as investors process the implication for energy markets, inflation/interest rates and investor sentiment. We remind investors that global economies were in very solid shape heading into this event, and markets (both risk and defensive assets) had arguably been positioning themselves for weeks.

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