Martin Horne

Markets are underpricing oil shocks because energy supply buffers are being depleted, European gas supplies are 15% below seasonal norms, reopening the Strait of Hormuz would take at least 30 days even with an immediate agreement, and winter is approaching. Geopolitical escalation between Iran and Israel raises the risk of sustained supply disruption, so oil prices are likely to surge from here.

South Korea is one of the most concentrated plays on AI, with its stock market heavily impregnated with technology and also benefiting from defense stocks. Despite today's selloff, the market is up 80% year-to-date and the underlying AI story should continue to push it higher. The pullback is a buying opportunity in a structurally positive trend, though volatility is extreme.

Horne argued that U.S. corporate earnings have shown resilience through multiple shocks, underpinned by a strong labor market and heavy investment in AI for future efficiency gains. He believes geopolitical events typically have short-lived market impacts. The core U.S. equity thesis, especially for large-cap indices like the S&P 500, remains intact based on nominal growth, earnings resilience, and technological investment, which insulates it relative to other economies facing the same shock. This is a LONG view on the broad U.S. market (best expressed via the S&P 500) as a relative haven with a durable earnings stream, advocating for looking through the short-term geopolitical volatility. The conflict escalates into a prolonged global recession that overcomes U.S. insulation.