Iran Retaliations Spooks Markets, Equities Fall, Commodities Rise

The U.S. Market Rebounds From Early Losses

The U.S. index futures fell sharply in the wake of Iran’s attack last night. The Dow Jones Industrial Average fell more than -400 points at the low of the movement but most of the loss was recovered before the opening bell. The S&P 500 and NASDAQ Composite were able to hover near break-even after recovering their losses. Even so, traders are warned not to get bullish with geopolitical tensions on the rise.

Iran fired more than a dozen missiles at joint-force bases in Iraq. No casualties are yet reported so the attack looks like a token gesture on Iran’s part. The risk for markets now is that Iran is not finished with its retaliation. The country has increased its aggressive overtures in the last year and this situation will stoke the fires.

Defense stocks are among the day’s top gainers with an average move near 1.0%. Oil and Gold both moved higher in hours following the attack but have both reversed the gains at this time. Shares of Boeing are down more than -2.0% following another 737 crash. This time the crash does not involve a MAX model but that doesn’t matter.

European Markets Are Mixed At Midday

The European markets are mixed at midday following steep losses in the early part of the session. The DAX is up about 0.30% with the CAC close behind. The FTSE is hovering around break-even, UK PM Boris Johnson is expected to tell the European Commission he won’t extend the 2020 final-Brexit deadline.

In stock news, shares of NMC Health are down -20%. The company is under pressure from short-sellers alleging bad accounting practices. In today’s news, two major stake-holders have exit the company by selling out their shares. Shares of UK retailer Sainsbury is trading flat. The company says Xmas sales were weaker than expected but offset by strength in food sales.

On the economic front, German Factory Orders fell but the general trend for the EU is positive. the Ifo Institute just upgraded their outlook for the 4th quarter by a tenth of a point to 0.3%.

Asian Markets Fall Hard

The Asian markets fell hard on news Iran had retaliated against the U.S. The Nikkei led the decline with a loss of -1.57% while the Shanghai Composite and Korean Kospi shed -1.20% and -1.10%. The Hong Kong Hang Seng fell a less-severe -0.85% while in Australia stocks closed close to break-even. The energy sector was the only one to see gains with most stocks rising 0.5% to 1.50%.