WASHINGTON – Our current bizarre, headline-driven US stock market finds itself deeply immersed in crazy time yet again. Tuesday evening, over-eager fake news headline writers had a field day trumpeting a “massive” Iranian fusillade of missiles, rockets – whatever – were raining down on “multiple” US-Iraqi bases in the latter country. Worse, “some” American and Iraqi lives were allegedly lost. War! For sure! We’re all gonna die! That “massive” Iran missile attack and later, a downed Ukrainian jet that crashed after takeoff from Tehran’s airport heightened the tension. US stock market futures dove straight to hell early Wednesday morning.
Funny. The fake news media, along with an endless number of leftist troll commenters in the Socialist Amen Corner, piled on – guess who – President Trump. They reflexively accused him of fomenting another useless war. Predictably, paid anti-war demonstrators started gearing up to “organize.” Unsurprisingly, the lamestream media continued to write horror scenarios even before Iran’s mad mullahs had figured out how to implement them.
But none of them bothered to read President Trump’s late Tuesday night tweet on the Iran missile attack:
“All is well.”
Morning markets do a 180 on last night’s US stock futures
By Wednesday’s opening bell, Dow Jones Industrials futures flashed positive. Averages opened weakly up. Then stronger. The Dow lagged the averages primarily due to a hit on Boeing (trading symbol: BA). Turns out that currently beleaguered US manufacturer built the downed Ukrainian jet. The airliner’s crash reportedly cost the lives of all aboard.
But to traders and investors, no matter. The other major averages, the S&P 500 and the NASDAQ, reflected that attitude, particularly after the President’s remarks. Both stocks and the underlying averages picked up steam from the get go. Bye-bye, Iran missile attack. That Ukrainian jet? Big deal.
As I write today’s market commentary, nearing the noon hour ET, the Dow is rocketing back to the stratosphere, up 212+ points at the moment: a 0.77% gain. The S&P and the Nazz are up similar percentages.
The reason why is simple. President Trump, who had earlier promised to address the nation this morning, kept his promise just moments ago. He reiterated his initial “all is well” message, post that Iran missile attack on the US and its largely Iraqi allies. He also effectively refuted the fake news media that earlier spread dire warnings of imminent Armageddon around the globe. Below is a video, posted by Fox News, of the President’s remarks on Iran and the Iran missile attack.
The aftermath of President Trump’s remarks on Middle East events
CNBC offered Wednesday morning market details and a brief synopsis of the President’s remarks.
“Stocks rose on Wednesday after President Donald Trump spoke about an attack by Iran at an Iraqi airbase that hosts American troops which led to a massive sell-off in overnight trading.
“The Dow Jones Industrial Average gained 190 points, or 0.6%. The Nasdaq Composite advanced 0.7% and hit an all-time high. The S&P 500 also climbed 0.7%
“Trump said Iran appeared to be ‘standing down’ after they attacked the Al Asad airbase. However, he added the U.S. will ‘immediately impose additional punishing economic sanctions on the Iranian regime.’
No war. At least not yet.
More details — uncomfirmed — on that downed Ukrainian jet
Speaking of fake news, earlier reports that the Boeing-built Ukrainian airliner that ended its service – and its passengers’ lives – in Iran, allegedly due to some kind of mechanical failure, were either revised or deleted. Word now is that those scary Iranian schemers may have accidentally been the perps behind that downed Ukrainian jet. They might have shot if down themselves..
Which may be why they’re refusing to send the airliner’s black box to Boeing for analysis as international protocol usually requires. Let’s go to ZeroHedge for the latest details as of the noon hour Wednesday.
“More suspicious details have surfaced over the past few hours as investigators take the first hard look at the circumstances that caused a Boeing 737 to plunge out of the sky minutes after takeoff.
“Bloomberg reports that foreign investigations into what happened will undoubtedly be hindered by the regime, particularly amid rising tensions with Washington. Meanwhile, more evidence as emerged to suggest that the jet was a victim of a misfiring of Iran’s missile defense system.
“As theories multiplied, the Ukrainian embassy in Tehran amended an earlier statement on its website, in which it ruled out terrorism. Instead, it offered ‘no comment’ on possible causes.”
Whoops. There goes another budding anti-Trump trope. Cross off that downed Ukrainian jet. But let’s wait a bit to do that. The current iteration of this ever-morphing tragedy also lacks confirmation. At the moment.
That said, the Ukraine’s “no comment” remark could be a “tell.”
A sensible Wednesday morning market preview proves true
Prior to this latest round of rumor, innuendo and confirmed fact, Innovative Income Investor’s Tim McPartland seemed to have a vision of the entire event-driven market scenario we’re now experiencing Wednesday on Wall Street.
“It is strange how we can go from a fairly large drop in the futures markets overnight because of Iranian missile attacks to a market that is acting remarkably calm.
“With the killing of the Iranian general last week I thought that we would see some short term market weakness, followed by a nervous flat market. With missiles flying last night from Iran I thought ‘oh no’ this could get much worse than I expected.
“Last night I did take a peek at the futures markets and saw they were down a couple hundred down points–all things considered not a big deal-and by market opening today we were flat and interest rates remained flat in the 1.81% area.
“So, for now, we are back to semi-normal conditions. Of course this will be hanging over our heads for another week and it will temper moves in stocks and interest rates.”
Juggling our portfolios to stay in tune with a totally confused US stock market
This morning, I was ready to start laying on a position in SDS, the double short S&P 500 ETF. The aim: To protect a set of portfolios that may be a bit too fully invested in the current overall political environment. But at the moment, that need has passed.
However, I’ve done a little fussing here and there, including the gradual addition of a few more shares in SDOG. This broadly based ETF does the “Dogs of the Dow” strategy one better by also including in its portfolio a representative slice of the “Dogs universe.” Namely, SDOG include doggy shares of major companies within each of the 11 S&P investment sectors. Thus, it’s a much broader approach than the original Dogs.
Taking a small chance on oil drilling success in Guyana and Suriname
In addition, we’re taking a small chance by picking up a few shares of second-place 2020 Dow Dog Exxon / Mobil (XOM). Generally patient investors (like we are at the moment) can collect a nearly 5% dividend while watching this currently sleeping energy giant lumber toward extracting a very, very big new oil find off the coast of sleepy, post-Jim Jones Guayana. We’re also starting to build a small position in high dividend paying (6.23%) Royal Dutch Shell (RDS/A).
Next door in Suriname (the former Dutch Guiana), US-based Apache (APA) and French partner Total (TOT) have apparently struck it equally rich with a big offshore find in that country’s territory as well. So all three names may be worth at least a momentary investment as well. They should work, particularly if the US-Iran cat-and-mouse game continues. Apache pays a slightly more than 3% dividend, BTW. And Total (which we assume the French would pronounce “toe-TALL”) pays a considerably bigger one, some 5%+ at the moment.
BTW, France will take a slice of tax out of that dividend before you get it. Which, IRS fans, you can get back on your 1040 as a foreign tax credit.
That’s it for Wednesday. For now. From the Iran missile attack to the downed Ukrainian jet debacle, it’s been perversely fun watching what started out as a very bad day get magically transformed into a very good one. (Thus far.) It’s amazing what a little fact-based air freshener can do to clear the room of fake news and innuendo. And today, the bulls are loving it.
– Headline image: President Trump addressing Iran missile attack. YouTube video via Fox News. 01/08/20.