JPMorgan's ex-quant: TACO trade won't shield markets from Iran war

Trump Always Chickens Out has saved Wall Street more than once in the president's second term. The TACO trade describes the market's relief rally after Trump backs off from aggressive policy. Marko Kolanovic, JPMorgan's former quant chief, said TACO won't get Wall Street out of this one.

"Trump can fix very little," he wrote. "You can't reverse damage to global energy infrastructure or appoint new Iran president by a tweet." Kolanovic added that TACO applies when Trump on his own decides e.g. if tariffs are 50% or 0% instantaneously, but "at this point in the war, Trump can fix very little." Oil prices surged and US stocks tanked as investors fretted over a drawn-out war in the Middle East.

Oil prices resumed their climb during Thursday's session, spiking even after Trump pledged to keep oil flowing through the Strait of Hormuz a day earlier. The United Kingdom Maritime Trade Operations reported an attack on an oil tanker in the northern Persian Gulf, underlining the threat to global oil flows.

United States, Persian Gulf

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