00:00European markets ended the day lower on the renewed tension.
00:03In Germany, the DAX 40 closed more than 1.4% in the red.
00:08There's fears that the energy-intensive export economy is especially vulnerable if the Iran conflict drags on.
00:14The London's FTSE 100 ended the day just over 0.4% lower.
00:20Oil majors BP and Shell among the stocks pulling that index down.
00:24And in France, the CAC 40 down just over 1%, dragged lower by luxury stocks as investors worry that higher
00:32oil prices could hit consumer demand.
00:35But in the United States, the S&P 500 and the Nasdaq reached record highs on Friday, driven by gains
00:42in tech stocks and stronger than expected jobs growth.
00:45The economy added 115,000 jobs in April.
00:51The unemployment rate remained steady at 4.3% despite an uncertain outlook from the Iran war.
00:57Economists have warned it's too early for the effects of the conflict to be fully felt.
01:02Well, let's speak now to Fiona Sincotta.
01:05She's an analyst with Finance Brokers City Index.
01:07Hello, Fiona.
01:08So, Wall Street's looking good, trending higher.
01:12Give us your breakdown of what you think is the most important driver of that.
01:17Yes, so, I mean, there are a couple of factors.
01:20As far as importance is concerned, I think it's difficult to really be able to distinguish.
01:25But, you know, we've just had a very encouraging earnings season, which is really particularly from tech stocks.
01:32We've seen semiconductors, chips performing well.
01:35That's really helping that AI trade be revived.
01:39Then on top of that, we've got solid data coming from the U.S.
01:43So, as you mentioned, the non-farm payroll report of closely watched timely jobs report was significantly stronger than expected.
01:51A second straight month of very solid jobs gains, showing that the U.S. economy is actually holding up, or
01:58the jobs market specifically,
01:59is holding up particularly well despite the conflict or the confusion over what's going on in the Middle East.
02:08And then on top of that, we've got that sort of optimism of that deal between, or a potential deal
02:15at some point,
02:16between the U.S. and Iran, which has pulled oil prices down, down around 6%, 7% this week,
02:22although they are up a little bit today, across the week they have fallen, which is just reducing inflationary worries.
02:29European stocks looking less rosy than the United States.
02:32What do you put that down to?
02:35So, again, there are a couple of factors here.
02:37I mean, we know that Europe is more reliant on imported energy and is therefore more vulnerable to spikes in
02:44oil prices, energy prices.
02:46So, any hints or warnings or fears that, you know, there might be an escalation, again, between the U.S.
02:53and Iran
02:53is going to be felt more intensely in European markets.
03:00And then on top of that, you know, we've had European earnings season.
03:04It's been okay, but it's definitely not as good as what we've seen in the U.S.
03:08So, again, that just means that investors are sort of shifting away from Europe and putting their attention onto the
03:14U.S.
03:15Oil is still bouncing around $100 a barrel.
03:19If we see solid progress on a deal, and we know that Iran is looking at the latest deal,
03:24if the Middle East tension starts to ease, where do you think a realistic price for oil will be?
03:31We spoke yesterday about this and you said you don't think it's going to go back to where it was.
03:36No, that's right.
03:37So, I mean, even if we did see, you know, a deal this weekend and the Strait of Hormuz reopen,
03:43it's going to take time.
03:45There's also been damage to oil infrastructure in the region.
03:50So, again, that's going to take time for things to ramp up, for refinings to ramp up and production to
03:56ramp up.
03:56So, I do think we would see some of the risk premium removed from the oil price,
04:02which would bring it back down from $100 a barrel.
04:05But, potentially, I think we could be looking around the $85 a barrel region once we see the Strait of
04:12Hormuz reopened and ships flowing.
04:14But that's up from that sort of $60 a barrel where we were prior to the war,
04:18just because there will continue to be that sort of concerns over supply until they're back to normal, which could
04:23take several months.
04:24Thank you so much, Fiona Sincotta of City Index.
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