Yale’s Stephen Roach: Markets are in danger of being ‘whipsawed’ by Middle East conflict, U.S. unemployment
01 October 2024, Israel, Tel Aviv: Missiles launched from Iran are seen in the sky over Tel Aviv.
Ilia Yefimovich/dpa | Picture Alliance | Getty Images
Markets are in danger of being “whipsawed” by the combination of regional conflict in the Middle East and rising unemployment in the United States, says Stephen Roach, senior fellow at Yale Law School’s Paul Tsai China Center.
The conflict in the Middle East escalated on Tuesday, with Iran launching a ballistic missile attack on Israel after its killing of Hezbollah leader Hassan Nasrallah and an Iranian commander in Lebanon.
Most Asian markets fell on Wednesday, tracking losses on Wall Street overnight, as investors fretted over rising tensions in the Middle East.
“The markets really will not know where to turn,” Roach said, adding that conflicts in the Middle East are adding to inflationary risks at a time when global central banks are starting to ease monetary policy.
“We are likely to see significant increases in volatility and markets that really are whipped back and forth dramatically,” Roach told CNBC’s “Squawk Box Asia” on Wednesday.
Oil market impact
The Israel Defense Forces said its troops had started launching new strikes against Hezbollah targets in Lebanon in response to Iran’s missile attack Tuesday night.
It remains to be seen whether there will be lasting effects on inflation, said Stephen Stanley, chief economist at Santander, adding that the oil market will be “affected more significantly” if the tension escalates.
Iran is the third-largest producer among the Organization of the Petroleum Exporting Countries, pumping out nearly four million barrels of oil per day, according to the Energy Information Administration. Oil prices had jumped over 5% after the missile strike before tapering to a 2% climb.
Outlook for interest rates
The Israeli response to Iran’s attacks “might throw the Fed’s 25-basis-point rate cut off track,” said Kelvin Tay, regional chief investment officer at UBS Global Wealth Management.
The U.S. Federal Reserve projected cutting interest rates by another half point over the next two policy meetings this year, according to the central bank’s so-called dot plot from the September meeting.
Traders are also looking to U.S. payroll data on Friday for more indications on the state of the economy after the U.S. Federal Reserve’s jumbo rate cut in September. A higher-than-expected unemployment rate could prompt the Fed to accelerate the easing cycle to achieve a soft landing.
The unemployment rate in September is expected to come in at 4.2%, according to data of a Reuters poll on LSEG, unchanged from the August figure. The unemployment rate had jumped to near a three-year high of 4.3% in July, a dramatic rise from the five-decade low of 3.4% in April 2023.
Another factor that could affect the Fed’s rate-cutting pace is how long dockworkers’ strikes at the U.S. East and Gulf coasts will last, Tay said.
Dockworkers at ports stretching from Maine to Texas have gone on a large-scale strike over disputes on wages and threats from automation. It’s expected to disrupt global supply chains and has halted the flow of nearly half of the country’s ocean shipping, Reuters reported.
“Any disruption of the port, any work stoppage at the port is going to have a very significant economic consequence and very quickly,” said Peter Tirschwell of S&P Global Market Intelligence, warning that “the longer this goes on, the quicker the economic damage will mount.”
The Mockingbird Solar Center, Ørsted’s largest solar project globally, is now online, next to protected prairie donated by the renewable energy giant.
This massive 468-megawatt (MW) solar farm is set to power 80,000 homes and businesses, providing a major boost to the Texas grid.
But the launch of Mockingbird Solar isn’t just about clean energy – it’s also about restoring precious ecosystems. Ørsted has donated 953 acres of the Smiley-Woodfin Native Prairie Grassland, which sits next to the solar center, to The Nature Conservancy. The donated land is now the Smiley Meadow Preserve, a protected area for tallgrass prairie that’s home to more than 400 species of grasses and wildflowers.
Tallgrass prairies are some of the rarest ecosystems in the US, with less than 1% of Texas’ original tallgrass prairies still in existence. Tallgrass prairie does a lot of heavy lifting for the environment, including storing carbon, preventing floods, and providing crucial habitats for pollinators.
“Native prairies are the rarest landscapes left in Texas – so much so that many people have never seen one,” said David Bezanson, land protection strategy program director for The Nature Conservancy in Texas. He added that preserving Smiley Meadow will not only conserve one of the best prairie remnants left but also help restore other prairie habitats and boost regional biodiversity.
The Mockingbird Solar Center, a half-billion-dollar project, is part of Ørsted’s $20 billion push to expand renewable energy production across the US. Beyond generating electricity, it will inject $75 million into local property taxes, benefiting schools and other public services. The project also created over 550 construction jobs and will continue to be supported by operations staff moving forward.
Ørsted worked with US companies, including First Solar, for solar panels and partnered with local businesses like Drake Construction and Pfifer Farms for construction materials. It also gave more than $50,000 to local volunteer fire departments in Roxton and Brookston.
With Mockingbird Solar now up and running, Ørsted has more than 6 gigawatts of onshore wind, solar, and battery storage projects either in operation or being built across the US.
Read more: Ørsted got a huge Tesla battery storage system for the world’s single-largest offshore wind farm
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Jeep’s first global luxury electric SUV will arrive at US dealerships any day. Despite its $72,000 price tag, lease prices for the 2024 Jeep Wagoneer S EV start at just $599 per month.
2024 Jeep Wagoneer S EV lease prices
After unveiling its first global electric SUV, Jeep’s CEO said the Wagoneer S “marks a new chapter” in its storied history.
Jeep claims the Wagoneer S packs “exhilarating performance.” With 600 hp and 617 lb-ft of torque, the big-body SUV can sprint from 0 to 60 mph in just 3.4 seconds. Its 100 kWh battery pack also gives it a driving range of over 300 miles.
The electric SUV is unmistakably still a Jeep, but it did get several upgrades to distinguish it as an EV. The grille is now enclosed without the need to cool a massive engine, giving it a sporty, more modern look.
Jeep revamped its design with a new illuminated seven-slot grille with ambient cast lightning. It also fine-tuned its profile, adding flush door handles, a rear wing, and integrated fins for better airflow.
The first Jeep Wagoneer S Launch Edition models get exclusive dark accent design elements like 20″ Gloss Black Wheels.
Inside, the electric SUV is loaded with the latest tech and connectivity, including a best-in-class 45″ of usable screen space. The setup includes a 12.3″ center screen and an exclusive 10.25″ interactive front passenger screen.
Jeep already announced that the 2024 Wagoneer S EV will start at $71,995, but now the company has revealed lease prices for the first time.
According to Jeep, the 2024 Jeep Wagoneer S Launch Edition can be leased for $599 per month for 36 months (10,000 miles per year). The deal includes $4,999 due at signing and a $7,500 EV incentive. However, you may want to act fast, as Jeep’s offer is only good until December 2, 2024.
| Jeep Wagoneer S vs Tesla Model Y | Starting Price | Range | Lease Price |
| Jeep Wagoneer S Launch Edition | $71,995 | +300 miles | $599/mo |
| Tesla Model Y RWD | $44,990 | 320 miles | $299/mo |
| Tesla Model Y AWD | $47,990 | 308 miles | $399/mo |
| Tesla Model Y AWD Performance | $51,490 | 279 miles | $599/mo |
In comparison, Tesla Model Y RWD lease prices start at $299 for 36 months with $2,999 down (10,000 miles). The Performance AWD model starts at $599 per month. In an end-of-year promo, Tesla also offers 3 months of free Supercharging and Full Self-Driving.
Ready to drive off in your new electric SUV? We can help you get started. You can use our links below to view offers on the Jeep Wagoneer S and Tesla Model Y at a dealer near you.
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