Goldman Sachs The Markets
What the volatile bond market means for investors
Oct 20, 2023
The podcast discusses the effects of violence in Israel on the market, increase in yields in the US treasury market, handling higher rates and foreign demand for US stocks.
07:16
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Quick takeaways
- US equity market remains relatively insulated from geopolitical turmoil due to its domestic focus.
- The increase in US treasury yields has implications for US equities and may lead to increased spending on interest payments for the federal government.
Deep dives
Geopolitical events in the Middle East have had limited impact on the US equity market
Despite the violence and conflict in Israel and the Gaza Strip, the US equity market, particularly the S&P 500, has remained relatively unaffected. Around 70% of the S&P 500's revenues come from within the US, providing insulation from the geopolitical turmoil. However, there have been some observable effects, such as a 10% increase in crude oil prices and a 5% decline in the Israeli shekel. Additionally, domestically focused US stocks have outperformed those with more international exposure. The future impact will depend on how the situation develops.
