MARKET CALL: In The Middle Of The Middle East

Israel is in the middle of the Middle East. Iran's Mullahs have been threatening Israel's existence since they overthrew the Shah of Iran in February 1979. There has been a covert war between the two since then. It turned more overt last year and escalated on Friday when Israel launched a preemptive strike targeting nuclear facilities (Natanz, Khondab, Fordow), military installations, and residences of senior officials in Iran. The strikes killed key Iranian military figures, including IRGC commander Hossein Salami and Armed Forces Chief of Staff Mohammad Bagheri, along with nuclear scientists and civilians (reports vary from 78 to 90 deaths). Iran reported damage to oil fields and gas production facilities.

The S&P 500 is now in the middle of the Middle East. The S&P 500 fell on Friday on the unsettling news out of the region but by only 1.13% to 5,976.97, which remains not far below the February 19 record high (chart). We anticipated this development in last Thursday's QuickTakes and recommended using any selloff in the stock market as a buying opportunity.