Dick Cheney Energy Returns as Defense Stocks Rip, Crude Spikes 12%, & Dip Buyers YOLO…
“I love the smell of napalm in the morning” - defense stocks (in extreme Alex Jones voice)
Well friends… you pretty much already know the story of the day. The U.S. and Israel spent the weekend sending Iran's current regime to the gulag only for the market to eat sh*t this morning. Naturally, the morning panic kicked things off with the S&P 500 dipping -1.2%, the Nasdaq faltering -1.6% and the Dow plummeting nearly 600 points.
And then… the dip buyers showed up to put the “bet” in WallStreetBets. By the close, the S&P had clawed back to +0.04%. The Dow dropped a measly -0.15%... and the Nasdaq scored a happy ending, up +0.36%. Fun fact: Jeff Kilburg at KKM Financial called the reversal on Sunday night, posted that futures were overreacting and the bull market was fine. Of course, a broken clock is right twice a day… but it’s no secret the man spoke it into existence. #respect.
Meanwhile, U.S. crude spiked 12% at the highs after an Iranian Revolutionary Guard commander said the Strait of Hormuz was closed. One-fifth of the world's crude flows through that chokepoint. Iran's the fourth-largest OPEC producer and suddenly oil-mouth breathers got the ride of their life. Crude eventually settled around +7%, which was just enough breathing room for Wall Street to start buying everything in sight.Case in point: Exxon and Chevron both posted a 1% gain, while Occidental and Phillips 66 led at +2%.
On the corporate front, Big Tech basically said “Strait of Hormuz, who?” as Nvidia ripped 3% while Microsoft popped 1.5%. Translation: big tech has fat stacks and doesn’t need the Strait of Hormuz to ship GPUs. Additionally, defense stocks went bonkers as the government got its Dick Cheney on over the weekend. Northrop Grumman boomed 6%, RTX rose 5%, and Lockheed Martin climbed. 3%. Literally nobody on earth is surprised by this LOL.
That said… the losers who got taken behind the barn were none other than airlines and cruise lines. Delta, United, and American all got scorched… down -2% to -4.5%. Jet fuel going vertical will do that to you, it seems. But that still wasn’t as bad as the brutality that occurred with cruise line stocks. Norwegian cratered -10%, Royal Caribbean dropped -3%, and Carnival got its “poop deck” on with a -7% drop. Woof.
Meanwhile, in news that has nothing to do with Iran but still matters: Goldman downgraded Novo Nordisk (+0.8%) to neutral. Their next-gen weight loss drug CagriSema couldn't beat Eli Lilly's (-3%) tirzepatide after 84 weeks. For a company that was supposed to own obesity forever, that's a gut punch (pun definitely intended).
Annnnnn that’s about it, friends. We continue to live in a simulation where crude spikes double digits, critical shipping lanes go dark… and the S&P damn near closed green. The dip-buyers are betting this is just another geopolitical scare that gets absorbed in a week. History mostly backs them up. TACO Tuesday, anyone?
But "four to five weeks" has a way of becoming four to five months when the Middle East is involved, and nobody's portfolio is priced for that version. So place your bets accordingly. Until next time…
If you read all of this, congrats for having a 10 second attention span (better than me). As always, here’s our heatmap for today.
☕ Market Gossip
> Steve Eisman says investors should ignore U.S.-Iran war, will be long-term ‘positive’ (CNBC): “Truth is like poetry. And most people f*cking hate poetry.” (Where my Big Short peeps at?)
> Apple Debuts iPhone 17e and M4 iPad Air, Starting Product Wave (Bloomberg): Same, same, but different…
> The Obscure Fee Costing You More to Buy a Car (WSJ): *immediately whips out this gem* - everyone buying a car right now
Greg Abel: *waits for Warren Buffett to leave*
Also Greg Abel once Warren Buffet leaves: *hits Option + Command + Power Button”
“WTF” Meme of the Day
At the time of publishing, Stocks.News holds positions in Apple, Exxon, United Airlines, and Microsoft as mentioned in the article.