BlackRock strategists said the US–Iran conflict-driven energy price surge will
have a persistent negative impact on the European economy, while potentially
benefiting energy infrastructure firms. They warned that buffers that absorbed
the first-round shock earlier this year are fading and Europe is particularly
vulnerable. Rising energy costs have knocked about 0.5% off euro-area GDP
relative to a no-price-rise baseline. Strategists expect assets able to
withstand future energy shocks—energy infrastructure—to attract increasing
investor demand, and note that higher bond yields have depressed equities,
leaving US and European utility stocks looking relatively attractive.
