Cheaper oil from Iran deal lights a fire under emerging markets — ride the momentum

Idea

The reopening of the Strait of Hormuz is causing oil prices to tumble, which acts like a massive tax cut for countries that have to import most of their fuel. Cheaper energy means lower costs for businesses and consumers in these regions, which is why emerging market stocks just hit a record high. By buying a broad emerging markets fund, you are betting that this relief will translate into sustained corporate profit growth and continued stock market momentum as the global economy adjusts to lower fuel costs.

Key details

Community

News sources

• Emerging Equities Touch Record High as Iran Deal Takes Effect — Bloomberg
• Oil prices under new wave of pressure amid lingering questions over a Strait of Hormuz reopening — MarketWatch

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