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M Stanley: Geopolitical Events Only Wreak Brief Sell-Offs
Although the US launched an attack on Iran's nuclear facilities, the sell-offs wrought by geopolitical events were brief, Morgan Stanley analyst Michael Wilson suggested.Brent ...
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M Stanley: Geopolitical Events Only Wreak Brief Sell-Offs
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Although the US launched an attack on Iran's nuclear facilities, the sell-offs wrought by geopolitical events were brief, Morgan Stanley analyst Michael Wilson suggested.

Brent crude oil futures grew 5.7% at one point on Monday (23rd) but has since reverted down, last trading at US$76.75 per barrel, down 0.34%.

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Historically, most sell-offs triggered by geopolitical events are brief and moderate, and the trend in oil prices will determine whether market volatility persists.

Currently, several favorable factors, such as a waning US dollar and a rebound in corporate earnings growth, are supporting the US bourse.

However, if oil prices continue to rise, stock investors may become nervous, as rising oil prices could have an immense impact on inflation and the economy, threatening the path of interest rate cuts.

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Wilson accentuated that oil prices must spike to create a bearish market scenario, believing that oil prices would need to reach US$120 per barrel to pose a threat to the business cycle.

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