Why Experts May Avoid US Dollar Assets Amid Iran Conflict; Asian Markets Look Stronger? | ET Now

Added: 2026-05-26

[00:00:00]CORT, Eco gnosis advisory, joining us this morning. Andrew, great having you.

[00:00:05]Uh how are you viewing developments? Do you expect a quick resolution at some point now? There's plenty of flip-flop even now. And Andrew, what's the risk in your opinion of this uh conflict really prolonging? Markets looking through it just like Russia-Ukraine?

[00:00:24]Absolutely. Look, when the war started Look, I'm not going to pat myself in the back because what I said at the time was an intelligent child would have been able to say it. That war is going to last for a very, very, very long time.

[00:00:38]I'm not talking about months, I'm talking about years. And it's going on like that. Uh you can see as your your your anchor was actually going through it, I felt like going like that. I mean, everything was wrong. They were fighting, they were not fighting.

[00:00:52]America says we are signing, the Iranians says we're not signing anywhere near. Israel says we are building more than every our capacity to strike.

[00:01:02]You know, there is absolutely nothing for there for the markets to bite on except as you say to flip-flop.

[00:01:09]Yes, we are signing, the price of oil comes down, US shares goes up. No, we are not signing, the price of oil goes up and so on.

[00:01:17]So, my approach to all this is not to believe, simply to work on the basis that that what is going to be now for the next month, for the next months. And even if they sign something or they sign a ceasefire, that's not going to last.

[00:01:35]This is going to last for a very, very long time. Who's going to win? It's not a matter of winning because in one sense the Americans have lost. They didn't get Iran to do what they wanted to do. At the same time, Iran was devastated both physically and politically with other Arab countries. Now, we know that Egypt has sent its air force to Oman. So, it it has become now literally a regional conflict. And the advice to my clients is to stay clear out of most of the US dollar shares because these are the ones that are likely to be hit most each time we have this flip-flop.

[00:02:15]Andrew, how how do you look at the entire scenario from a from a global equities perspective?

[00:02:23]Do you see that you know I know a decision on or or agreement may not be near and it will take maybe months for for to for that to come, but in the interim there could be a ceasefire which allows trade to happen or you know Iran to sell its oil as well?

[00:02:43]Look, it might, but it's not going to last.

[00:02:46]What I'm actually saying in you are looking at a continuously volatile market. As far as equities are concerned, we already have very good examples coming back year 25.

[00:02:57]In other words, don't trust the S&P.

[00:03:00]Uh Singapore, Thailand, Taiwan, Korea have all outperformed the S&P consistently in the last year and a half in US dollar terms. There are places where you can make money without being unduly concerned about the war. It's as as simple as that. Unfortunately, India hasn't, but India is not necessarily a victim of the war because the performance of the Sensex in the last year was already was giving us some pretty good idea what's going to happen now.

[00:03:32]So, you know, I'm I'm I'm not complaining. I'm not comparing apples with bananas. I'm comparing apples with apples. There are a lot of markets that are doing very nicely. Stick with them, particularly in Asia. Even if war goes through, some of the European markets the performance is better. The S&P is up, I don't know, 5 6 7% year Of course, in US dollar terms, that's hardly a big performance. And at a market that it is universally acknowledged to be massively overpriced, particularly because it is driven by seven or eight individual shares.

[00:04:06]Again, you know, this is Nobel Prize-winning stuff. I'm embarrassed when I say that to my clients because it's not value-added stuff. It is well known, but clearly people just don't listen to it.

[00:04:17]What [laughter] can I do?

[00:04:19]You spoke about the Asian markets which have outperformed S&P and other markets.

[00:04:24]Uh but many of these Asian countries are also dependent on crude and largely from the West Asia. So, they are also hit as hard as any other country which is dependent on energy security. Uh And so, how do you look at those markets from that point of view? Or is it just the AI trade which is playing out there which is ignoring all the other news which is coming in?

[00:04:47]Yeah, remember the AI trade one has to be incredibly careful what we're talking about because AI we treat it as a commodity as gold. Okay, no. AI consists of three completely separate but interlinked parts. One is the guys and girls that are producing physical bits, the Nvidia of this world, the Intel of this world.

[00:05:08]Then there are the people that are preparing the infrastructure where these particular chips are going to be used.

[00:05:16]Okay, and then of course there are the people that are producing the software that is being sold. So, I'm looking specifically, okay, not so much at the bits that are being produced. Okay, this is quite a quite useful and quite interesting, but I'm asking my question on the infrastructure which is being produced, what is going to produce, and who is going to buy it? And this is where I have my question mark. Now, back to the Asians and those affected or not affected by oil. I've already given you five names. Clearly, all these are countries that are buying oil, but clearly they're not affected in terms of hitting their stock market. Thailand, Malaysia, Singapore.

[00:05:54]Uh Taiwan and South Korea. They're doing very very very well indeed.

[00:06:00]And clearly they are still obviously paying higher prices of oil. India is not. Okay, Philippines is not.

[00:06:09]And they're all different too. Right.

[00:06:11]>> And of course wait, China is not, but the market is not doing all that well or at all well.

[00:06:18]So so what do you think happens to flows therefore, especially towards emerging markets, Asia and the like? Because you've got the 10-year bond yield at 4.5%.

[00:06:27]It it topped out at approximately 4.6% this time around. The the earlier top out was 4.4 at some point this year.

[00:06:35]What's the sense there and what does that do to flows? What should we we be wary about sitting here in India?

[00:06:43]The the the sense is very very straightforward. Inflation in the United States has gone up and it will stay up and it will stay up for a long time. And the Fed is not going to cut. Whether it's going to increase it is now become much more of a political issue. It's it's stupid enough to say, politically speaking, they cannot afford at all to be seen cutting.

[00:07:04]But equally, politically speaking, they cannot afford vis-a-vis Trump to see them increasing interest rates, although the markets are already doing it for them. You see, the obsession with central banks misses out the fact that you have a colossal market, that's the bond market, that they are doing what we think they would be doing. They have already increased prices. A lot have increased prices. So this is very much, I would say, in the market. The markets are getting more comfortable that they are going to see interest rates on the long term with a with a number four in front of them.

[00:07:35]Yeah?

[00:07:36]That's that's true. This Okay, Andrew, thank you so much for coming in and giving us that view.

[00:07:41]That's of course the global picture for you viewers. Uh