Iran war impact seeps ever deeper into global economy

The market is underpricing the duration risk embedded in this shock. The first-order hit is margin compression from input costs, but the second-order effect is a demand air pocket: when firms front-load production to secure inventory, you get an artificial near-term boost followed by a sharper pull-forward hangover in the next 1-3 quarters. That makes cyclical industrials, logistics, and European consumer discretionary more vulnerable than headline PMI levels alone suggest.

The bigger setup is stagflationary regime persistence rather than a one-off inflation print. Energy shocks typically flow through with a lag, so the inflation impulse is still building even as growth expectations are being revised down; that combination is toxic for rate-sensitive equities and for companies with weak pricing power. In contrast, beneficiaries are firms with pricing optionality, trading intensity, or AI capex exposure, because they either pass through costs faster or gain share as supply chains re-route.

For single-name impact, the reported sensitivity suggests downside risk to names tied to project execution and global freight rather than pure end-demand. OTIS is exposed to delayed construction starts and refurbishment cycles if financing costs stay elevated and building activity slows; SPGI is less damaged operationally but can see softer debt issuance, M&A, and capital markets volumes if risk-off lasts into Q2/Q3. The broader overhang is that a prolonged shipping bottleneck through Hormuz can force earnings cuts well beyond energy-intensive sectors by compressing working capital and extending delivery times across the industrial complex.

The contrarian angle is that some of the near-term weakness may already be crowded into Europe and cyclicals, while the deeper opportunity is in relative shorts against beneficiaries of the volatility spike. If the conflict de-escalates quickly, the unwind could be violent because markets have already started pricing a multi-month supply shock; however, absent a clean diplomatic off-ramp, the base case is that margin pressure and sentiment deterioration worsen before they improve.