IWM - Buy This Market Despite Rising Geopolitical Risk

2024-04-19 17:22:18 ET

Summary

• The Israeli attack last night appears limited, and Iran does not appear like it will respond or escalate in return.
• Mitigating factors in the conflict between Iran and Israel mean that the conflict may be less likely to interrupt global economic activity than is widely feared.
• Geopolitical risk often affects the market in ways different from individual perceptions and personal experience suggest.
• The strength of the recent selloff, an approaching earnings season, and the seasonality of volatility suggest to me that the market should rally in the next couple of months.

Last night, Israel attacked Iran's territory directly. This is the second major escalation of what has been a mostly covert international confrontation between Israel and Iran. But now, Iran has launched an attack on Israel from its territory and vice versa . Luckily, the limited nature of the Israeli attack appeared to avoid a major, indiscriminate attack on population areas from Iran....

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