- Stocks set record heights, despite the Iran conflict…
- “Something underneath the system is off”…
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Dear reader,
The S&P 500 and Nasdaq Composite ended trading at record heights yesterday.
The mainstream financial media credits the bonanza, largely, to the president’s extension of the ceasefire.
Yet a truce is not a peace. It is a mere suspension of armed hostility.
And so a question dangles in the air: Why are stocks laughing off the conflict — with its drastic energy disruptions and discombobulations?
Are these not ill economic omens that should frighten the horses?
“ACID Capitalist” Hugh Hendry believes he knows the answer. He believes he knows why the stock market is up and away despite the unpleasantness.
The answer, in this fellow’s telling, is that the stock market possesses superior intelligence.
“The Market Didn’t Even Blink”
The stock market knows that Iran verges upon defeat. Thus he argues, in foul tongue, that:
- The transatlantic intelligentsia of the coastal elites and the European Sophistocrats, tell you the same g*****n thing:
- Iran, Darling, Iran has the upper hand. The strait is their choke point.
- Trump, Trump, that clown he’s out of his depth. He’s a reckless vulgarian, and he’s dragging all of us into another disaster.
- While the patient, chess-playing Iranians, they hold every card as they sip tea in Tehran.
- My brothers and sisters, this is not journalism. It’s a f*****g echo chamber…
- The market did not hedge. The market didn’t even blink. It just f*****g ignored it.
- It went the other way. It made fresh all-time highs whilst the entire elitist Tehran-centric fantasy was still being printed as gospel.
Iran Will Be on Its Knees Within 30 Days
Mr. Hendry proceeds to inform us that the blockade of Iranian oil will soon have the nation on its knees.
He cites JPMorgan data indicating that Iran will begin to suffer oil production shut-ins within 15 days.
Within 30 days all production will essentially cease. Thus the vicious Persian tiger… so dependent upon oil sales… will be reduced to a nearly irrecoverable condition of kittenhood.
The stock market can see it, though others cannot:
- You’re not reading it in the press, but you’re damn well reading it on your screens.
- Because this is where the gap between the narrative of the media and the price stops being subtle and irrelevant, and it’s why stock markets have priced something entirely differently.
- The Iranian system, the adversary, cannot afford to stay disrupted without hurting itself. That’s what’s in the equity market’s price…
- The market has priced the probability. And right now, the probabilities… don’t point to an empowered adversary like Iran dictating terms to a paralyzed American administration.
- They certainly do not tell you that.
- They point to something simpler, a constrained energy producer hitting the natural limits of its own system… A system that is precariously on the edge of irreversible damage.
The Stock Market’s Moving on to Coming “Hurricane of IPOs”
Thus this Hendry character concludes that:
- Global capital markets have already moved. Global capital markets are no longer trying to travel through the Strait of Hormuz. Instead they’re waiting for the hurricane of IPOs over my shoulder to come to a stock market close to you.
I concede the possibility that this fellow is correct. Iran may soon come heaping down due to its inability to vacuum oil from Earth — and the stock market’s eagle vision discerns it.
I cannot authenticate these claims because I lack immediate access to the Iranian situation.
What is more, my agents have been unable to penetrate the war fog. They merely report rumors of varying credibility.
Yet I cannot deny that the stock market runs to record heights despite the conflict.
And as I wrote shortly after the conflict commenced, it should not floor or flabbergast us based upon prior conflicts.
History demonstrates remarkable stock market resiliency in wartime.
“Something Underneath the System Is Off”
Yet is this market truly rational? What does the gold price tell us about the stock market?
Writes market commentator Tom Wilson in Real Clear Markets:
- Stocks are rising alongside gold, a combination that doesn’t usually happen unless something underneath the system is off.
- Traditionally, these two assets move for opposite reasons. Stocks tend to climb when investors feel confident about growth and earnings, while gold rises when there’s concern about inflation, currency value, or broader instability.
- When both move higher at the same time, it suggests they’re not responding to the same signal-and that disconnect usually doesn’t last…
- Whatever gold is signaling, equities aren’t listening. The market keeps climbing, as if none of it really matters.
- That makes the move in stocks harder to explain. If gold is rising on central bank demand, geopolitical tension, and underlying stress, you would expect some of that to show up in equities. Instead, it doesn’t. The market keeps moving higher, largely ignoring the signals coming from elsewhere.
Do You Believe in Gold — or Stocks?
In conclusion:
- For now, the market keeps moving as if everything lines up. Stocks continue higher, even as gold reflects a very different set of concerns. That gap can persist longer than expected, but it doesn’t erase the signals behind it.
It just means they haven’t been forced into the same place yet.
It does appear, as this fellow argues, that “something underneath the system is off.”
Is gold off — or are stocks off?
I concede at once my bias. That bias inclines me in the direction of gold.
As is often said, “gold is truth.”
Thus I hazard that the stock market is off.
That is, I hazard the dispute will settle not on the stock market’s terms — but on gold’s terms.
Recall, gold is truth.
Brian Maher
for Freedom Financial News
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