Markets Eat Dirt as Israel-Iran Situation Blows Up In Investors Faces (Literally)...

Markets woke up Friday, took one look at the Middle East, and projectile vomited 600 points straight into the void. Investors are getting waterboarded today after Israel decided diplomacy was for losers and launched a “surprise” airstrike on Iran’s nuclear facilities. 

(Source: Giphy) 

And the carnage so far is real AF. Nvidia and Tesla are getting body-slammed (-2.4% and -1.8%) as risk appetite went missing, presumed dead. Meanwhile, defense stocks like Lockheed Martin are backing up the brinks truck on this issue (up 3.1%), as well as oil majors like Exxon and Chevron who are popping the Crystal. Why? Well, because as Dick Cheney would probably put it, one thing Wall Street loves more than cheap money, is a war that keeps oil expensive and Raytheon’s order books full. 

As for oil futures, they are absolutely unhinged. Brent and WTI both spiked over 8%, while Gold hit a two-month high due to its “apocalypse insurance” moat. So with that, what exactly happened here? In short, Israel’s defense minister declared a “special state of emergency” after Israel targeted Iran’s nuclear program with the subtlety of a Michael Bay movie. Multiple nuclear scientists and military personnel got turned into statistics. Iran tried to clap back with a fleet of drones, but Israel swatted them out of the sky… presumably, with some of the great U.S. of A’s defense tech. 

(Source: CNBC) 

However, the U.S. made sure everyone knew they didn’t send so much as a drone selfie. Secretary of State Marco Rubio confirmed zero US military involvement, but “exquisite” intelligence sharing. Translation: “We watched everything on a livestream and sent Netanyahu the link.” The bad part? Anyone still clinging to the “disinflation” narrative just got a reality check. If oil stays up, CPI numbers are about to get juiced harder than Mark McGwire in ‘98. Additionally, Mark Malek from Siebert Financial summed it up: “If this sticks, inflation is going to be a problem… again.” 

If you recall, stocks were on track for a weekly gain before this massive clusterf**k, but now the market has fallen out of it’s a$$. Defense and oil are the only things holding up as of right now, meaning if this conflict keeps escalating… Well, investors in these sectors are going to print cash for all the wrong reasons. 

(Source: Giphy) 

In the end, if you’re reading this this morning, be thankful you survived another night of “geopolitics meets YOLO”. As for your portfolio, that’s another story. Meaning, keep your head on the swivel and place your bets accordingly. Until next time, friends…

At the time of publishing, Stocks.News holds positions in Tesla as mentioned in the article.