Jefferies chief strategist delivers his latest market forecast as Middle Eastern tensions escalate

Geopolitical Risk Assessment - Market participants are attempting geopolitical analysis, but accuracy is limited due to uncertainty surrounding Iran-Israel tensions [1][2] - Despite direct missile exchanges between Iran and Israel, the market showed resilience, with only a slight dip [2][3] Market Reaction & Positioning - The market's reaction to geopolitical events was not significantly negative, suggesting potential opportunities in fixed income [4][5] - The market's lack of strong reaction indicates that risk asset positioning is not overly committed [8] - There was an emotional liquidation of US risk asset positioning during April and May, setting the stage for a potential market recovery [6] Economic Factors & Outlook - The market may be underestimating the positives from deregulation, fiscal policy, and trade negotiations [7][8] - A fiscal bill with pro-growth features is expected to pass [8]