Source: “Planning and Progress”, Northwestern Mutual (2022)
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Markets sold off sharply as escalating Middle East tensions drove oil prices higher, fueling inflation concerns and continuinig to push both stocks and bonds lower.
Markets stabilized late in the session after an early surge in oil prices faded on signs that the Strait of Hormuz could reopen, easing immediate supply fears. Equities recovered most of their intraday losses but still closed modestly lower, while Treasuries rebounded and the dollar weakened. The overarching theme remains geopolitical uncertainty driving energy volatility, with central bank concerns about inflation adding a secondary layer of pressure.
A sudden, dramatic 94% drop in shipping traffic through the world’s most crucial oil chokepoint is sending economic shockwaves well beyond the Middle East. From rising fuel costs to disruptions in farm and logistics operations in West Tennessee, businesses and consumers are already dealing with higher prices and supply chain uncertainties.
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