0:00
Uncertainty is everywhere, investors are freaking out, fear is taking over the market and
0:04
people want to understand what's going to happen to their portfolio.
0:07
Well, yesterday marked the 15 days since the start of the Iran bombings.
0:11
Well, the United States and our allies have hit a report in 6,000 targets since the start
0:16
The straighter who mose remains closed and there is no clear end date in sight.
0:20
Over those 15 days, we have seen most asset prices fall and investors are trying to make
0:25
sense of all the uncertainty.
0:27
The Nasdaq is down 2%.
0:28
The S&P is down just over 3%, gold is down 3.5%, and TLT bonds, they have fallen nearly
0:35
5% since February 28th.
0:37
This lack of performance in stocks in particular is noteworthy.
0:41
The underlying fundamentals of these businesses has not really changed, yet investors are
0:46
Opening Bell's fill Rosen writes that the Iran war, inflation fears and oil shock, haven't
0:51
changed the fundamentals driving the stock market.
0:53
Actual earnings momentum is strong.
0:56
100 earnings are also still robust.
0:58
Headline uncertainty hasn't derailed the nuts and bolts of the bull run.
1:02
And we know from history that the S&P tends to do very well after geopolitical shocks
1:06
and short-term sell-offs.
1:08
Phil explains that the S&P 500 averages 14.2% in the 12 months after a geopolitical shock
1:15
going all the way back to the Korean war.
1:17
Bulls have a dominant track record when it comes to rebounding from uncertainty and history
1:21
favors the optimist.
1:23
But we don't need to dream about the future by looking at the past.
1:27
We can see that the two shining lights in investor portfolios right now today, they're
1:33
Oil is up approximately 45% because there is less global oil production going on.
1:38
Remember, about 20% of all global oil flows through the straighter humoes, so if demand
1:43
stays constant and supply drops materially, the price has to rise to accommodate everyone.
1:49
High demand from your economics 101 class, it's essentially a law of the universe and
1:54
it's still true today.
1:55
And it doesn't seem to matter what announcements or actions are coming out of the White House
1:59
Many developed nations came together and they claimed that they were going to collectively
2:03
release 400 million barrels of oil.
2:05
Trump was rumored to use the War Powers Act to facilitate more oil production in Southern
2:10
We even saw the headline that the US military and our allies would help escort various
2:14
ships through the straight.
2:16
None of it changed reality though.
2:18
Secretary Scott Bessett went on CNBC this morning.
2:21
He tried to calm the market.
2:22
He tried to explain the US strategy moving forward and he reiterated that a very small number
2:27
of ships are starting to successfully navigate the straight.
2:31
President Trump has made it clear that his goal is to degrade and destroy the capabilities,
2:41
the military capabilities of the regime to destroy the Navy, which is done, the Air Force,
2:50
And now the bombing campaigns are going after the factories so that they cannot recreate
2:57
And we want to destroy the Iranian ability to project power outside of their borders.
3:03
And you know, Brian, Iran was the head of the snake, the head of the snake for global
3:08
terrorism everywhere.
3:10
Whether it was through their proxies or, you know, there were Iranian guard members,
3:18
There's hisbola in Colombia.
3:21
They're interacting with Cuba.
3:23
You know, everywhere that there is chaos and terrorists mayhem, it is Iran.
3:28
So this is a generational opportunity to end this.
3:32
And I don't want to say that the straight is, quote, closed.
3:34
I don't like that term, but the reality is shipping traffic has fallen off a cliff.
3:38
It's critical for oil, for gas, for fertilizers, helium, for semiconductors.
3:43
Is there a plan to get that fully?
3:46
I don't want to say reopen.
3:47
There was a tanker that ran through today, fully operational and safe for all global shipping.
3:54
Well, let's pull that apart.
3:57
So we are seeing more and more the fuel ships start to go through.
4:02
The Iranian ships have been getting out already.
4:05
And we've let that happen to supply the rest of the world.
4:09
We've seen Indian ships go out now.
4:11
So the Indians who rely very heavily on Gulf oil, we believe some Chinese ships have gone
4:18
So, you know, that, and that should start ramping up before there are any, the flotillas
4:27
are protective armadas in the Gulf.
4:31
So we think that there will be a natural opening that the Iranians are letting out.
4:37
And for now, we're fine with that.
4:39
We want the world to be well supplied.
4:41
Now, it's great to hear the Treasury Secretary calmly explaining what is happening, but oil
4:46
keeps appreciating in price and it likely is not going to come down until the conflict
4:51
The uncertainty fades and the straight is fully open to everyone again.
4:55
We can see this oil price impact at the gas pump for everyday Americans right now.
4:59
Charlie Blolo writes that gas prices in the US have moved up to $3.72 per gallon.
5:05
That's the highest level since October of 2023.
5:08
The 27% spike over the last month, that's the biggest we've seen in the past 30 years,
5:15
But oil is not the only asset we're paying attention to in my opinion.
5:19
The most interesting story in global finance is the performance of Bitcoin.
5:23
The digital currency has been trading with high correlation to software stocks over the
5:27
And frankly, Bitcoin investors have been disappointed.
5:30
But right now stocks are down.
5:31
As is gold, yet Bitcoin has appreciated approximately 10% since the first bomb was dropped
5:37
On one hand, Bitcoin is doing exactly what you would expect it to do.
5:41
Bitcoin investors have long bragged about it being decentralized and uncorrelated.
5:45
So the chaos hedge is doing its job during global turmoil.
5:49
On the other hand, Bitcoin has become much more popular in institutional portfolios.
5:53
You know, mass adoption.
5:54
Bitcoiners think they're winning.
5:55
But that's why the software stock correlation persisted.
5:58
So my guess is that the non-institutional buyers are the ones that are rushing to the
6:02
largest digital asset looking for safety.
6:05
Institutions are selling Bitcoin.
6:06
They're selling stocks.
6:07
They're selling anything liquid, but it's retail that's going in and buying.
6:11
It is almost like the world is remembering that Bitcoin is a borderless asset that operates
6:14
outside the traditional financial system, or that Bitcoin serves as the most sensitive macro
6:19
asset to global liquidity.
6:20
So price appreciation will be basically guaranteed if nation states need to print money to keep
6:25
funding the ongoing war for a prolonged period of time.
6:29
If Bitcoin's outperformance continues, I would expect sophisticated investors to begin
6:33
looking at the asset more deeply.
6:35
They dream of having a non-sauver, geopolitical hedge to add to their portfolios from moments
6:41
Historically, these investors were highly skeptical of Bitcoin and their cryptocurrency industry
6:46
Many of them doubted the longevity of the asset, or they questioned the unpredictability
6:51
But Bitcoin's volatility has come down.
6:53
And now all of a sudden, everyone's interested.
6:56
Those fears and concerns will quickly dissipate if Bitcoin is perceived to pass this geopolitical
7:01
Investors put capital where their confidence grows.
7:03
And Bitcoin's best argument right now, it's not hype, but instead it is substance because
7:08
performance is a hell of a drug.
7:11
The global asset scoreboard has Bitcoin beating most of its peers.
7:15
If that outperformance continues, Bitcoin is going to have a lot of new friends in the
7:19
Now, I think that this is a very dynamic situation.
7:22
Things are changing and asset prices are going to move with the developments in the geopolitical
7:28
The president with a single tweet or the signing of a pen could completely change financial
7:33
And so it's important for you sitting at home to continue to pay attention.
7:37
But right now, stocks are down.
7:41
But Bitcoin and oil are up.
7:43
And my guess is that a lot of people are asking themselves, can my portfolio be resilient
7:47
in a world where geopolitical uncertainty and conflict rules the day?
7:52
You've seen a lot of different things come out of the White House and we've seen a lot
7:55
of conflict break out across the world.
7:58
What we're all trying to figure out is not how much money can you make in the short
8:02
But instead, how resilient can your portfolio be?
8:06
So 20, 30, 40 years from now, you can take your portfolio and you can hand it to your
8:10
children or your grandchildren and say, I did the best I could.
8:15
Here's what I came back with.
8:17
That's it for today.
8:18
I hope you guys enjoyed this video.
8:19
Please remember to subscribe on YouTube and I'll see everyone live from the desk of Antidio