Analyst: This Middle East crisis may be different, suggesting not to immediately buy any dips

Odaily News According to Odaily, as Iran launched missiles at US military bases in Gulf cities, airlines suspended flights, and oil tankers carrying oil and other products halted passage through the Strait of Hormuz, the situation has become more chaotic. Rong Ren Goh, Portfolio Manager at the Fixed Income Team of Eastspring Investments, stated that tail risks in the Middle East have increased. Markets will reprice, shifting from geopolitical shocks to regime risk shocks and prolonged conflicts, rather than just retaliatory actions, unless Iran expresses willingness to negotiate. Analysts believe a greater risk lies in market complacency. Markets have been assuming the conflict's impact will be limited and have been reluctant to compare this conflict to the 1979 Iranian regime change. Barclays analysts said history strongly suggests not to chase rallies when conflicts erupt, but rather to "sell the news." However, the worrying aspect is that investors are now accustomed to the "sell the news" mindset and may underestimate the risk of the situation spiraling out of control. It is advised not to immediately buy any dips. If the stock market correction is sufficiently large, for instance, if the S&P 500 falls more than 10%, then a buying opportunity may emerge. But not yet. (Jin10)