Calls (or hopes) For Stock Market Crashes Have Been Wildly Exaggerated – Again

It’s another geopolitical Monday. And as usual, we have all these newly minted pundits and experts on the Middle East. Also, as usual we have the masses already embarrassingly wrong. The nonsense I read being bandied about over the weekend was beyond laughable. Calls for a global stock market crash with oil spiking $50 were patently idiotic. I think some folks literally sit around hoping and praying for global demise.

Early Sunday evening, pre-market action showed stocks being down roughly 0.35%. By the time the morning came, the market looked unchanged. Don’t be surprised if it closes higher today with whatever early morning rise in oil being reversed to the downside.

We all have opinions on what was done in Iran and what should have been done. What happens going forward is what matters, not in the next few days or weeks, but how the Middle East is shaped for the next decade or generation. Those invoking 1990 when oil spiked due to Iraq invading Kuwait or the oil shock of the 1970s are living in a different era. Those analogs are almost irrelevant today.

Also irrelevant is my own opinion which likens the Iranian armed forces to that of Iraq in 1991. Back then, Iraq had the 4th largest armed forces on earth and we were told it was going to be another Vietnam. After spending four months readying for war, when our ground troops finally attacked in January 1991, the Iraqi army surrendered with barely a fight. They were poorly armed and had low morale. The stock markets soared. Oil collapsed. The global economy took off.

My thesis on the stock market remains. It has been going sideways for a few weeks. My preferred scenario has stocks popping one more time, perhaps to new highs, before a deeper pullback sets up. However, the market could already be in that pullback. I do not believe that stocks are going to take off from here on their way to 6200 or higher. That would surprise me.

As for crude oil, it is down from $130 and up from $55. The Goldilocks sweet spot is a range that’s somewhat like $60-$90. Everyone wins there.

The first heat wave of 2025 in the Northeast. Please stay hydrated and cool!

On Friday we bought RECS and SSO. We sold some VGK.