The crisis escalates, the stock markets plunge – Chief strategist: Extremely worrying

The stock market is rumbling again, and there are still more down days to come, he estimates Bank of Åland rescuer Jyri Suonpää Directly from Kauppalehti In the Talousamau program on Monday.

At the beginning of the week, the stock markets have seen a wide decline after the US president Donald Trump threatened early Sunday to strike Iran’s power plants, if the country does not open the Strait of Hormuz, important for oil transport, to commercial maritime traffic within 48 hours. Iran issued a counter-threat to strike the energy and water purification plants and IT infrastructure used by the USA and its allies.

The reporter who hosted Monday’s Talousaamu Heidi Huotilainen asked Suonpää how worrying the escalation seen in the situation in the Middle East over the weekend seems.

“It’s extremely worrying. The time limit set by Trump expires next night at around two o’clock Finnish time. What then remains to be seen. But it seems that, contrary to what was actually expected, Iran still has the ability to strike both right, left and center,” Suonpää reflected.

After the interview on Monday afternoon, Trump announced a five-day delay in strikes on energy targets.

“And like the US Treasury Secretary Scott Bessant said on Sunday, sometimes you have to escalate in order to de-escalate [rauhoittaa tilannetta]. The message seems to be pretty clear. Unfortunately, it seems that the pace is accelerating,” Suonpää said.

The crisis in the Middle East has increased the price of oil. According to Suonpää, the crisis can be seen as uncertainty in the stock market.

“The stock market is also weighed down by the fact that interest rate cut expectations have now clearly turned into interest rate hike expectations both in Europe and, in fact, even in the US. Stocks are also weighed down by the fact that the market is now pricing in a stagflation trend, i.e. a period in which inflation is high and rising and, on the other hand, economic growth is sluggish and declining,” Suonpää said.

At 10:46 a.m., the Helsinki stock exchange was down about 2.4 percent. In Asia, the Nikkei fell as much as 3.6 percent. The futures are also anticipating a decline in the United States.

The day’s broadcast also discussed the lunch business and of electricity storages. You can watch Monday’s Economic Morning in its entirety below.

Addition at 4:22 p.m.: After an interview Monday afternoon, Trump announced a five-day delay in strikes on energy targets.