Gulf War Oil Price Surge Fades as Go Global Trade May Get Boost

The latest Gulf War has pushed up the price of Brent crude oil to $101.06 on Thursday, but it quickly fell back down to $86.58 after Iran suspended attacks if the US does the same.

Last week, rising oil prices were a headwind for the 'Go Global' trade relative to 'Stay Home', as they fall harder on oil-importing economies abroad than on the US, which exports oil.

However, with lower oil prices, the Go Global trade may get a tailwind this week. In fact, a plunge in China's June oil imports was one reason why oil prices fell rapidly that month, when there was also a ceasefire.

This month has seen a sharp rotation in global stock market leadership. The AI-related leaders South Korea and Taiwan have been among the worst performers so far, down 19.3% and 9.8%, respectively.

But China has topped the leaderboard with a gain of 9.5%, followed closely by Indonesia, Hong Kong, and Singapore. Interestingly, both Korea and Taiwan steadied this past week, up 0.3% and 0.7%, which could be an early sign that the sharp selloff is easing.

The structural case for Go Global remains intact, with foreign stock valuations remaining cheaper than the US and forward revenues and earnings abroad climbing to new records.