Merryn Talks Money Why Has the Market Shrugged Off Escalation in the Iran-Israel Conflict?
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Jun 23, 2025 John Authers, a Senior editor for markets and Bloomberg Opinion columnist, dives into the market's surprising calm amid the escalating Iran-Israel conflict. He discusses how traders reacted positively despite U.S. involvement and limited retaliatory strikes. The conversation explores the psychology behind the BTFD (Buy The F***ing Dip) strategy and the allure it holds for investors. Furthermore, they analyze Bitcoin's role as a speculative asset during global uncertainties and the contrasting performances of stocks in the UK and US.
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Market Shrugs Off Iran Strikes
- The market is shrugging off US strikes on Iran as it sees limited escalation risk.
- Iran closing the Strait of Hormuz is unlikely due to its self-harming economic impact and risk of US retaliation.
Oil Markets Manage Geopolitical Tensions
- Oil supply is strong and demand is low, so oil prices remain stable despite geopolitical tensions.
- The 20% of oil flow through the Strait of Hormuz is important but manageable for the market.
Reduced Geopolitical Oil Risk
- The US is now more energy independent, diminishing oil's geopolitical risk premium.
- Oil's share of GDP expense is much lower, reflecting a less energy-intensive economy.
