Israel and Iran conflict became the top news last week as Israel launched a massive attack on over 100 Iranian targets including key nuclear facilities. Iran retaliated with hundreds of ballistic missiles and drones causing dozens of civilian casualties and infrastructure damage. Both sides continued their exchanges over the weekend as global leaders urgent call for de-escalation amid fears of wider regional war. I am not going to pretend to be an expert on these conflicts that have been going on for hundreds of years, I will simply watch price and how the market reacts. I see all the energy names reacting to this and they probably all gap up Monday but I am not looking to chase these stocks higher.
Thursday night, when this news hit, I was worried we would see a massive selloff as investors looked to de-risk before the weekend as things may further escalate into Monday. The fact we did NOT see a dramatic move lower Friday was a huge positive to me. Yes we closed lower, but the S&P down 0.36% on the week hardly screams fear and panic to me. Still momentum could be slowing after a huge market run, so caution heading into the week is prudent. Again, let's let price do the talking at the end of the day.
We have Thursday off with Juneteenth, but it's a jam packed week for news otherwise with lots of economic data along with a Fed rate decision meeting Wednesday. Markets are currently pricing in a 97% chance of no rate cut, so don't expect one Wednesday. No trade of the week this week as I'm in "wait and see mode" with tonight's futures and the market opening this week with the war backdrop.
