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Financial stress levels have eased somewhat with the ongoing conflict in the Middle East entering its fifth week. Jurrien Timmer reports that bonds and equities, along with their volatility measures, have moderated. This development coincides with an increase in ship traffic through the Strait of Hormuz, up to four vessels last week after a period of no activity.
Market participants are watching these indicators as a sign of stabilizing conditions amid geopolitical tensions.
Jurrien Timmer has previously pointed to the S&P 500 falling 9.2 percent from recent highs, along with an 18 percent decline in its P/E ratio during periods of market volatility (article). He has also discussed the historical link between sudden oil price spikes and equity drawdowns in years such as 1973 and 2022 (article). These factors remain in focus as markets respond to developments in the Middle East.