Why Markets Will Move Past U.S./Iran ‘in a Week’

0:00Let's bring in our key guest here. Peter cheers with us. Head of macro strategy at Academy securities. Peter, I'm so happy you're here. This is such a huge day to have you on a breaking news mode. We know that there has been stops in oil. You have Qatar stopping LNG production. We've had hits in Qatar. Talk from Qatar, Saudi Arabia, Kuwait, Cyprus. It's not just Israel, US and around. This is a complete story, your thoughts. So one, I do have the pleasure I work with 30 retired generals, admirals, and some former CIA directors. So I think we've got pretty good insight. I think at this point, I think the market might still be overreacting a little bit. We price print crude from 60 to 72. It's up a little bit today. Yes, we're worried about how this goes. But if you take a step back, the US and Israeli intelligence was superb. The execution has been superb. You know, Iran has kind of been floundering. Iran, I think, thought maybe they could bring some of the other Middle East countries to their side. I think the Middle East countries just want to move on to data centers and get rid of all these issues. I think this

1:00calms down. I don't think anything does damage to the Straits of Remove. If the Strait of Remove gets shut in any which way permanently, I'd be worried. I think this is going to be a temporary thing. And within a week, we're going to blow past it. Oil is going to be lower and Marcus can move on. And so for people to understand, I mean, the Strait of Remove travels about a fifth of oil. I saw the graph of all the boats lined up on either side, but that top nook is quiet. And you can't, you know, when we say close that we know what we mean. And if you go through there, you'll be bombed. You don't want to go through there. They actually can't physically put up a, you know, a wall. It's 21 miles long, but they can make it so so much escalation that you don't want. They've already seen some ships come down. And it could get to the point where they put in mines or something like that. Yes. Or they sink some ships there. So that could make it. That would have a Greek ship, sort of, have something. It was called a, it was a galomina company from Greece, actually, one of the ships, I think, went down. In the meantime here, what is your assessment of the market? Because from what I understand, and I was looking at Mike

2:02Wilson from Morgan Stanley, he was saying in one, and let's see, in a few months, let's say, one six, 12 months, the market is up to six and eight percent, respectively. That markets come back. So yeah, I think some of the pressure that's come on specifically from this will decrease. I think we'll see oil come off a little bit. I think yields can come back a little bit, though I think under four percent's kind of a stretch there. I think for equities and credit, this really comes back to the real story, which was the story of all last week and the prior week. What's going on with the AI disruption? What's going on with private credit? Does this feed into credit as a whole? Does it start hurting the banks? So I think right now we're at the cusp where this is still very manageable from a credit perspective, which would help equities. If that starts turning over, that's where I think we get problems. So to me, my focus for credit and equities is a little bit away from Iran. I think that's a side story. It's a plus or minus two percent that goes away. Yeah. Whether we're higher on six months is going to depend on what happens the economy on AI. Peter Chair, I mean, I know you're friendly with a lot of generals and those in the military. Of course, I want to recognize the lives lost at least three

3:06US military servicemen and their families and all the families that are really supporting our military at this time of action, which from what I'm hearing, you tell me what you're hearing. I mean, heard the president said at least four more weeks of this, right? I mean, we can't expect this to be. It's not like what we saw with Iran recently. It's going to be a different story. Yeah, I think there's a lot of pressure to continue to attack. So right now we're probably assessing what damage was done where we go back attacking. I think in some ways, it's good that we decapitated so much of the leadership in Iran. On the other hand, that probably makes it hard for anyone in Iran to figure out who's in charge and reach out for a potential deal. I still think that we see a deal sooner than later. When we're talking about this, yes, there is risk that Iran really is stubborn on this. At the same time, there's a power vacuum. Someone's going to try and fill that power vacuum. And if I'm them, I've seen every leader above me get killed. I'm worried about myself getting killed. I'm worried about my family. Your own weapons systems have been a failure. I think you reach out and try and strike some sort of deal with this president. Yeah, I mean, that would seem the logical path, doesn't it? If you're the son of Ayatollah Khomeini,

4:10you may not necessarily feel that way. I think that he's one of the people that has been discussed as the possible succession plan. But it's my understanding that the US really doesn't want to change Iran. They just want a leader that is willing to say no nooks and work with the other countries. I think a lot of it really comes down to does someone in the IRGC? So that's kind of the Iranian Republican Guard. Does someone there kind of fill this vacuum and take over in such a way that I think there is a lot of people in Iran who are very uncomfortable with kind of the religious repression that they see it? There are some, obviously, who are very comfortable with. But I think that's you're going to see some sort of change. And to me, it's going to look more like a Venezuela 2.0, where you get something that resembles the current structure, but maybe a slightly different power base, a slight more amenable to working with the US. Do you have an inkling of who may the succession plan, the likely candidates to lead this country? I do not give all the carnage that's been over there who have no idea. And I think that's probably what's trying to bubble up in surface there is people are trying to even themselves figure out,

5:14okay, where is this? And it's very hard when you're probably scared to death of actually meeting in person given the attacks that it makes. Well, they are waiting for protesters to come out too to really protest. And I guess summer's still very afraid. So we'll have to wait and see in the meantime. When you think about your vantage point as an investor, near term and long term, near term opportunities, long term opportunities. So near term, I think you want to take some profits and energy. I've loved energy for a while. You've had this phenomenal ramp up. Listen, I think this is going to calm down. I think it's going to resolve itself. You're going to see Brent and WTI maybe back towards 60. So with that, I think take some profits on energy. I think take this opportunity on any rallies to like readjust where you are in your overall equity positions. I think equity started some problems last week. And this is just more excuses sell off. So I want to be a little bit underweight, risky assets right now, including across the globe. I've loved the global trade. I think that's going to weigh a little bit. So this rotation, I'm just a little bit more nervous. So I would dial back my equity exposure across the

6:17board right now, less to do with this and more to do with the confusion around those AI data centers and those hints of problems in the credit markets. So you don't think tech's oversold. You wouldn't be buying here. It's not your game right now. My gut feel is yes. Deep down, that's all I want. He was controlling. You're sitting there seeing this. But I am worried that if you see credit kind of start rolling over a little bit, that now would lead the way. So to me, like we always talk of credit leads the way. I think equity has led this down draft. They pulled credit wider. But if it now becomes a credit issue, it goes back full circle. So it's the only reason I'm not buying hand over just a little second thought. Like I'm the extreme circumstance. Could we see $100 oil? Could we six six thousand in gold quickly? I don't think so. I think that would take a real effort by Iran that I'm not even sure they're capable of doing something to really disrupt this straight for extended period of time. So I think that's not going to happen. I would not be surprised by tomorrow. We're back below where we were on Friday. I think a lot got priced in. And I think gold can do okay, but I don't see that as being the big rally. But we should expect some volatility. I'm sure volatility

7:19for sure. Good. Peter cheers. Wonderful to see you. So glad you're here. It's always great to be in the New York's strategy at Academy Securities. Peter, thank you so much on a day where we are covering breaking news here on Wall Street.