Trending On Livewire: Weekend Edition - Saturday 14th June

The Aussie market was largely in a holding pattern this week. Whilst the ASX 200 recorded an all-time high on Wednesday, weakness over the final two sessions saw the index finish not too far form where it started the shortened week.

Whilst trade negotiations simmer away in the background and markets remain optimistic of positive resolutions, the major story has been the escalation of tensions in the Middle East. Israel’s strikes on Iran saw oil prices spike yesterday, and concerns mount that higher energy prices would be inflationary for the US, at a time when we’ve just seen cooler inflation Stateside and calls for interest rate cuts.

Putting the human cost to one side, a further escalation of conflict and threats to oil supply are the types of externalities that could have significant negative impacts on already fragile markets.

Have a great weekend.

Chris Conway, Managing Editor, Livewire Markets

One of the world’s most famous investors in Howard Marks says asset prices are “lofty but not nutty.” Speaking at the Morgan Stanley Australia Conference this week Marks said the US and global economies are on a bumpy track to a soft landing that means investors can be cautiously optimistic. Moreover, Marks says investors shouldn’t panic about daily headlines around geopolitical ructions and always focus on holding companies that steadily grow profits over the long term. That way you can ignore the short term noise and focus on making money over the long term.

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Given stretched equity valuations, rising recession risks, and geopolitical tensions, which asset is most likely to outperform by year-end?

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