Key insights
- The author maintains a bearish outlook on the S&P 500 due to escalating military activity in the Middle East. They cite increased US military operations and the potential closure of the Strait of Hormuz as drivers for higher oil prices and increased geopolitical risk, leading to a negative impact on equities. The author recommends holding cash and short positions in oil-related assets.
Fixed the title because I am still waking up and put "bull" instead of "bear". Need to finish my coffee.
I watched Pete Hegseth and General Keane's press briefing this morning at 8 am.
Pete Hegseth said:
* Last night alone, there were 200 "dynamic strikes".
* That if Iran is wise they will cut a deal, and if they are not willing the Department of War will continue with "more intensity"
* The war will end on the US's terms and the US will continue to "negotiate with bombs" until the US gets what it wants.
* Boots on the ground aren't being ruled out.
General Keane said:
* Joint force continues to focus on military operations.
* Have STARTED to conduct B54 missions.
* Working attack helicopters into campaign.
* Continue to prosecute military campaigns at industrial capacity.
Anyone dumb enough to believe Trump is going to withdraw when the Strait of Hormuz is closed, after marshaling 50,000 troops to CENTCOM, rather than interpreting his statements to be a very obvious threat to goad the European and Gulf States into contributing to the military operations, is going to get burned hard.
Continue to hold cash. Continue to hold short term OXY calls. Continue to believe oil deliveries are at best months from resuming through Hormuz. Continue to believe in a continued slide, despite the "Trump put" that always hits when WTI front month futures cross $100 (and hello Barclay's analyst who stole my phrase).