Markets Are Pricing in War Again

Markets are weak, focused in tech. But there is strength in oils and materials and much of the 2022 trade when World War 3 was thought to be a foregone conclusion. Two years hence and we yawn at Ukrainian drones partaking in 9/11 terror attacks into Russian hi rise buildings. Amidst the tumult, there is a worsening in relations between the East and the West, but to be cautious about war is also synonymous with being ‘fooled’ because Russia hasn’t attacked Warsaw with nuclear devices.

It’s all very mundane stuff but one thing we can depend on is our leadership tossing its people into the fires for profit. They exchange Joe Iowa for dollars and they’ll continue to foist Joe Iowa at Ivan or Chen until they run out of Joe’s and that’s just the way it is, the way it has always been.

Investing in this backdrop is deleterious and at times frightful and you must be either brave or really stupid to have faith that it all works out and none of the pieces fall out, leading to COLLAPSE. We’ve had so many of them in recent decades, too many to count, and almost every single trader I know is not only waiting for the next one, but expecting it.

Today we have stocks like $APA, $FANG, $XOM, $CLF, $NUE sharply higher, all of the plays that worked early 2022. That is the war trade: oil, materials, logistics, defense, and sharply lower tech stocks.