The war in the Middle East continues to have a tight grip on the stock markets. JPMorgan has now identified winners and losers in the conflict.
• Conflict with Iran escalates
• JP Morgan experts see some war winners
• Defense and security of energy supply in investor focus
Israel and the USA have been carrying out air strikes against targets in Iran for days. The aim of the operation is to destroy Iran’s nuclear facilities, missile and drone capabilities and military infrastructure. In addition, the Iranian navy is to be massively weakened.
Iran not only responded with counterattacks, it also effectively blocked shipping traffic through the Strait of Hormuz. The strategic importance of this strait between the Persian Gulf and the Gulf of Oman is fundamental for the world market: around 20 percent of global exports of crude oil and liquid gas pass through this bottleneck. The oil market reacted accordingly sensitively, where price increases were clearly noticeable.
JPMorgan: Who profits from war
The political uncertainty combined with inflation concerns as a result of rising raw material costs is poisonous for the stock markets. Since the beginning of the war, there have been significant discounts on the stock exchanges in the USA, Europe and Asia.
But according to “Investing.com”, the US investment bank JPMorgan has also identified numerous winners from the conflict: On the one hand, because the security issue is of greater importance. That’s why the bank sees upside potential in defense companies, which it says “benefit from missile defense systems, the use of drones in war and the replenishment of ammunition stocks.” BAE Systems is particularly highlighted because the British company supplies the infrared target detection of the guided missiles in the US Army’s THAAD missile defense system. But JPMorgan financial analyst David Perry also sees the defense companies RENK, Leonardo and QinetiQ in investor focus because of their high US sales. The investment bank’s experts also see opportunities with cybersecurity companies because they play a role in “protecting critical infrastructure in an environment of increased threat.”
On the other hand, JPMorgan analysts give a thumbs up to North American energy companies – including E&Ps, refineries, domestic oilfield services, LNG and midstream companies. They argue that the blockade of the Strait of Hormuz is increasing pressure on Western states to develop alternative energy routes and storage systems. Investments are likely to increase in the modernization of our own networks and in LNG infrastructure in order to become independent of unstable regions.
Away from the stock market, JPMorgan believes that precious metals will benefit from demand for safe-haven investments.
The war losers
On the other hand, the investment bank believes tourism companies are “vulnerable to a decline in discretionary demand and a regional collapse in bookings.” In addition, cruise lines and airlines are burdened by rising fuel costs as well as regional port disruptions and regional flight cancellations.
JPMorgan also sees consumer goods and global brands on the losing side, according to Investing.com. The reason given is inflation expectations, risks in the Asian supply chain and a risk-averse mood.
Editorial team finanzen.net
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