- An Iranian response is likely to hang over the market for years to come, but investors are likely to settle down in the near-term.
- The stock market’s inflated valuations may make a rebound more laborious.
- Oil prices and the industries they impact offer the best contrarian plays at present.
The US is awash with speculation onhow Iran will retaliate to the US airstrike that killed Qassem Soleimani. The news of Soleimani’s death took stock markets markedly lower and caused investors to flee for safe-haven investments.
Investors fear thatIran’s responsewill have an even
greater impact on the US stock market
in the months ahead.
Iran Will Play the Long Game
The shock the US stock market received on Fridaywill likely wear off in the coming days if Iranian officials bide their time. Further conflict, if confined to the Middle East, is likely to have a similar impact on US financial markets.
Nuclear Retaliation Likely
Either of those actions would represent a dangerous step toward nuclear weapons, but they don ‘t necessarily make Iran immediately dangerous as a nuclear threat.
Still, that kind of uncertainty would take a toll on the US stock market – at least temporarily . Consequently, it could offer an attractive entry point for investors.
What does that mean for stocks? It depends.
The shock the US stock market received on Fridaywill likely wear off in the coming days if Iranian officials bide their time. Further conflict, if confined to the Middle East, is likely to have a similar impact on US financial markets.
Nuclear Retaliation Likely
Either of those actions would represent a dangerous step toward nuclear weapons, but they don ‘t necessarily make Iran immediately dangerous as a nuclear threat.
Still, that kind of uncertainty would take a toll on the US stock market – at least temporarily . Consequently, it could offer an attractive entry point for investors.
Airline stocks are a typical casualty when oil prices rise. But the belief that airlines are heavily impacted by oil price fluctuations is antiquated. The price of fuel is a factor for airlines, but the demand for seats is the
For oil stocks, movement is dependent on how sensitive the firm is to crude prices. Big producers likeChevron (NYSE: CVX) and (Exxon) ***************************************** (NYSE: XOM) won’t see the same boost as smaller producers because of their diversified operations. Refiners will see a drop as crude prices rise.
************** (**************************************************************************** Oil stocks spiked Friday on news of the Iran strike. | Source:Yahoo Finance
According to RBC Capital Markets’ Scott Hanold, traders who want to benefit from rising crude prices but keep out of the wild swings will opt for large-cap oil producers or those with limited or no exposure to the Middle East like (Devon Energy) ****************************************** (NYSE: DVN) or EOG Resources ****************************** ((NYSE: EOG)
Healthcare, Social Media and Financial Stocks Under Cybersecurity Threat
This weekend, Iranian hackers replaced a government websitewith threats of revenge for Soleimani’s killing .
While the incident did very lit tle damage since it impacted the little-known Federal Depository Library Program, it could be the start of Iranian hackers targeting US websites. While the government makes for an obvious target, corporations are likely to be under threat as well.
While Iran has the ability to impact important infrastructure within the US , a serious attack is unlikely because of the repercussions.
With that in mind, Iran’s cyberattacks still add a layer of uncertainty to US financial markets. According to cybersecurity firm Check Point,the industries most likely to be targetedare healthcare, financial services, and social media because of their potential to create compelling headlines.
Healthcare, Social Media and Financial Stocks Under Cybersecurity Threat
This weekend, Iranian hackers replaced a government websitewith threats of revenge for Soleimani’s killing .
While the incident did very lit tle damage since it impacted the little-known Federal Depository Library Program, it could be the start of Iranian hackers targeting US websites. While the government makes for an obvious target, corporations are likely to be under threat as well.
While Iran has the ability to impact important infrastructure within the US , a serious attack is unlikely because of the repercussions.
With that in mind, Iran’s cyberattacks still add a layer of uncertainty to US financial markets. According to cybersecurity firm Check Point,the industries most likely to be targetedare healthcare, financial services, and social media because of their potential to create compelling headlines.
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