Markets are unlikely to shift into risk assets in the near term amid heightened geopolitical uncertainty, Seth R Freeman from GlassRatner Advisory told ET Now. Speaking on developments between the US and Iran, Freeman pointed to “conflicting information from the administration” and mixed signals over the Strait of Hormuz. He said while US officials indicated the waterway was open, Iranian leaders suggested otherwise, contributing to market unease.
“The result is uncertainty,” Freeman said, adding that any recent diplomatic arrangement remains politically contentious. He noted that the deal is “extremely unpopular, particularly with Republicans as well,” and flagged uncertainty across Lebanon, Iran, the US and other Middle East countries over possible policy responses.
He added that markets are “just ripe with uncertainty for this week.”
Volatility expected as political rhetoric intensifies
Freeman warned that volatility could persist amid ongoing political messaging from Washington and Tehran.
“I think we’re going to see a lot of volatility,” he said, citing remarks from US President Donald Trump about escalating action if Iran fails to adhere to agreements, alongside Iran’s insistence on maintaining its nuclear programme.
He described the dynamic as “like a seesaw or yo-yo,” adding that markets generally “don’t like this level of uncertainty,” even as US equities have recently reached record highs, creating what he called a “new normal.”
Oil markets tied to regional developments
On crude, Freeman said oil prices remain highly sensitive to developments in the Middle East.
He noted Brent crude had fallen around USD 80 and said prices were previously in the USD 60s before the latest escalation, suggesting the market is still partially elevated relative to earlier levels.
He also pointed to declining global reserves and supply pressures, which he said could fuel inflationary pressures, including higher food prices in the coming months.
“If the ships can’t get through the strait,” he warned, prices could react sharply to supply disruptions.
AI valuations, India and China outlook
On global equities, Freeman suggested parts of the artificial intelligence trade may be in “bubble territory,” but said India could be relatively less exposed to downside risk.
He argued that India may remain a long-term beneficiary of AI due to its engineering and mathematical talent base, adding that “work is going to still be farmed out.”
On China, he pointed to underperformance in Chinese equities versus broader Asian markets, citing weakness in property markets and stress in the banking system. He described the environment as a “risk-on, risk-off situation” that is deterring foreign investors until valuations reach more attractive levels.
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money-related decisions.)
