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So How Will The Strikes On Venezuela Affect Markets?
@staycalm Not to be contrary with you, but rather as counterpoint: I may be wrong here, but the notion that war is good for an economy probably comes from the huge manufacturing effort that occurred when we entered WW II. It pulled us from a period of doldrums, employing many new workers (women?), as young men were enlisted and sent overseas. Huge government "war" spending drove the economy.
I'd argue that was a very specific circumstance, that evolved into a myth about war and economic growth. Interesting topic, I think.
Let me expand a bit and provide some other thoughts
- War is great for the MIC and MIC affects most states. - US controlling Venezuela (and seems Trump is already ruling out the opposition leader, perhaps because of gender) will give massive leverage over China. Chinese export curbs on rare earths are going to disappear pretty fast - Likely bearish for oil prices near term but Opec will likely cut production to control prices - AI firms aren't going to complain about cheaper energy - Bullish for US oil majors for obvious reason. And all the linked industries.
Overall: Bullish for the markets, likely even bullish for the Dollar.
@stayCalm - With all due respects, I don't think that Trump is ruling out the opposition leader because of gender. Apparently some members of the VZ military helped Trump. I think these people wouldn't help Trump with Maduro's ouster if they expected the USA was about to hand over the country to the opposition.
Let me expand a bit and provide some other thoughts
- War is great for the MIC and MIC affects most states. - US controlling Venezuela (and seems Trump is already ruling out the opposition leader, perhaps because of gender) will give massive leverage over China. Chinese export curbs on rare earths are going to disappear pretty fast - Likely bearish for oil prices near term but Opec will likely cut production to control prices - AI firms aren't going to complain about cheaper energy - Bullish for US oil majors for obvious reason. And all the linked industries.
Overall: Bullish for the markets, likely even bullish for the Dollar.
@stayCalm - With all due respects, I don't think that Trump is ruling out the opposition leader because of gender. Apparently some members of the VZ military helped Trump. I think these people wouldn't help Trump with Maduro's ouster if they expected the USA was about to hand over the country to the opposition.
@PopTart: In theory at least, US should not be picking winners and let the voters decide. But we know how that goes. To your point, the dismissal of the opposition leader points to the install of a leader friendly (cough: puppet) to US interests after the necessary "paperwork" has been taken care of.
The floodgates to commerce will open after Trump Corp establishes the toll booth. I.e. Hotels, crypto, drilling contracts, construction, etc..
@DrVenture - Try the blueberry ones, they’re heavenly!
@stayCalm - Who knows? Trump might want a percentage of any deals, kinda like the deal to allow Nvidia’s H200 GPU’s to be sold in China. We‘ll see how this plays out.
I do wonder if added oil supply "hopes" could actually hurt oil stocks?
A surge in gold prices, wouldn't surprise.
Someone else has offered (at Stocktwits:) "Chevron operated in Venezuela and has a long term contract to buy natural gas from Energy Transfer. Sounds like good news to me!"
I dunno how accurate that prediction will turn out to be. Capitalism and Markets and Orange One possess no conscience. The planet is already awash in oil, and natgas is a by-product.Will Orange One pick winners and losers(again?) Will he sell Maduro a pardon when it's convenient? Every day, I am aghast, and the feeling just gets deeper.
Should we imagine mental toddlers seated in front of a bank of 85" monitors connected connected to a series interlaced group of quantum computers running one's choice of AI programs. They argue about Deepseek, relative to all the other AI programs. Which will provide the answer they want? Someone suggests that they must ask or phrase the proper question, to expect the answer they want. Do they vote, as a group, on the scenario(s) outcome(s) or do they ask the 'puppet' or do they find the right movie that will inspire the 'puppet' to their desires?
My question remains. Who are the 'puppet masters ???
If this happened on a weekday, I think the market would have gone down the following day, and it would just be a 1 day drop. Because this happened a few days before the market opens, investors have more time to let it marinate and not sell on what may be diminished uncertainty by Monday morning. IMHO I think this will have no affect on the markets (although that could change in the coming weeks if new concerning developments emerge). I think defense stocks might go up. I happen to have exposure to that, and I think there is a good chance they go up.
I can't help but think that this event may have been a set-up from the start. Using Putin's playbook we arrest you and give you safe passage, we hold a sham trial, you are convicted, and pay me a billion$'s or more plus some oil for a pardon. Oh, and we get your country too. Easy stuff.
Maduro’s extraction couldn’t have been successful without someone (likely more) in the Venezuelan military helping the USA, imho. Probably these people will quietly receive a % of the profits from the increased oil exports as payment for their cooperation.
Increased Venezuelan oil production will give countries around the world (like India) an alternative to Russian oil, although I don’t know if this is part of Trump’s motive for getting rid of Maduro. Trump might have just wanted to help his big oil friends.
I agree with @chinfist, hopefully not much change in the markets on Monday, unless something else happens …
One day hard to say. But over coming months U.S. occupation of Venezuela should increase the supply of oil, bring down prices further which might in turn push the reported CPI a bit lower. if the CPI falls, the Fed will probably lower rates which should be stimulative for equities. Air carriers stand to benefit from lower fuel prices. Lower gas prices might spur sales of big gas guzzling trucks / SUVs - the kind Detroit likes to sell because of their higher profit margins. Net.Net. Should be good for equities near term.
I'm not supporting today's actions. Just looking at it as a potential influence on investments near term.
NYT tidbits about Venezuela's oil reserves and industry:
Venezuela claims to have more than 300 billion barrels in the ground, the largest reserves of oil of any country. But it struggles to produce about one million barrels a day, or around 1 percent of global production. In addition, much of Venezuela’s oil is extra heavy, making it polluting and expensive to process.
The country’s oil fields are run down and suffer from “years of insufficient drilling, dilapidated infrastructure, frequent power cuts and equipment theft,” according to a recent study by Energy Aspects, a research firm.
Chevron is the main Western oil company still operating in the country and produces about a quarter of Venezuela’s oil. Early in this century, when other companies were forced out, Chevron stayed, figuring that conditions might eventually improve. Roughly half of Chevron’s production is exported to the United States.
In theory, if U.S. oil companies were given greater access in Venezuela, they could help gradually turn the industry around. “But it’s not going to be a straightforward proposition,” said Richard Bronze, head of geopolitics at Energy Aspects.
Analysts say increasing Venezuelan production will not be cheap. Energy Aspects estimated that adding another half a million barrels a day of production would cost $10 billion and take about two years. Major increases might require “tens of billions of dollars over multiple years,” the firm said.
My Chevron stock is up only 2.29% since the first of the year. It is an increase but not an unusual jump for this stock. I've always considered Chevron's future in Venezuela to be muddy at best, even now.
Canada is the big loser. Their heavy oil will be displaced by cheap Venezuelan oil.
That presumes Donnie's plans ever come to fruition. It's interesting how quiet Chevron and the other US majors have been thus far...you'd think if they were 'given' a country to rape and pillage they'd be issuing statements left and right outlining their preliminary plans. So far, from what I can tell, only CVX has issued a lukewarm "we'll follow the law" statement.
As with the 'drill baby drill' nonsense in the US, the oil cartels like oil at a certain price and won't just produce more because they can. Suddenly flooding the market with cheap oil may not always be in *their* best interests, and their interests always come first.
You learn some new things when we invade other countries. I knew Venezuela had large oil reserves (largest in the world, actually), but didn't know about the large GOLD and rare mineral deposits.
It's the perfect target for a predatory attack if a bully country is seeking commodities (and a nice distraction from their other issues).
You learn some new things when we invade other countries. I knew Venezuela had large oil reserves (largest in the world, actually), but didn't know about the large GOLD and rare mineral deposits.
It's the perfect target for a predatory attack if a bully country is seeking commodities (and a nice distraction from their other issues).
Yes, learning lots of things. There is something called guerilla warfare that we might be more tuned into down there in Venezuela (and hopefully not here at home).
That FIFA Peace prize must be shining bright on the mantel right now. So much peace.
I hope we haven't set a new precedent whereby presidents can be kidnapped on a whim. I'll remind folks that our unhinged president has complete immunity - DO NOT STEAL HIM.
Comments
I'd argue that was a very specific circumstance, that evolved into a myth about war and economic growth. Interesting topic, I think.
I do wonder if added oil supply "hopes" could actually hurt oil stocks?
A surge in gold prices, wouldn't surprise. Still, as Sargent Schultz was known to say, "I know nothing!"
Maybe we watch RTX and NOC and LMT. I actually have a lowball limit order on NOC for several weeks. And own some RTX.
- War is great for the MIC and MIC affects most states.
- US controlling Venezuela (and seems Trump is already ruling out the opposition leader, perhaps because of gender) will give massive leverage over China. Chinese export curbs on rare earths are going to disappear pretty fast
- Likely bearish for oil prices near term but Opec will likely cut production to control prices
- AI firms aren't going to complain about cheaper energy
- Bullish for US oil majors for obvious reason. And all the linked industries.
Overall: Bullish for the markets, likely even bullish for the Dollar.
Though, I cannot say that I have ever been fond of your toaster pastries. lol
The floodgates to commerce will open after Trump Corp establishes the toll booth. I.e. Hotels, crypto, drilling contracts, construction, etc..
@stayCalm - Who knows? Trump might want a percentage of any deals, kinda like the deal to allow Nvidia’s H200 GPU’s to be sold in China. We‘ll see how this plays out.
A surge in gold prices, wouldn't surprise.
Someone else has offered (at Stocktwits:)
"Chevron operated in Venezuela and has a long term contract to buy natural gas from Energy Transfer. Sounds like good news to me!"
I dunno how accurate that prediction will turn out to be. Capitalism and Markets and Orange One possess no conscience. The planet is already awash in oil, and natgas is a by-product.Will Orange One pick winners and losers(again?) Will he sell Maduro a pardon when it's convenient? Every day, I am aghast, and the feeling just gets deeper.
Heather Cox Richardson, Understanding the U.S. Strike on Venezuela.....31 minute video
Wish that I had a 'clue'.
I'll be looking at FINVIZ after 8pm, Sunday, for clues from the big kids.
We're 43% equity, 39% mmkt and 18% bonds.
Should we imagine mental toddlers seated in front of a bank of 85" monitors connected connected to a series interlaced group of quantum computers running one's choice of AI programs. They argue about Deepseek, relative to all the other AI programs. Which will provide the answer they want? Someone suggests that they must ask or phrase the proper question, to expect the answer they want. Do they vote, as a group, on the scenario(s) outcome(s) or do they ask the 'puppet' or do they find the right movie that will inspire the 'puppet' to their desires?
My question remains. Who are the 'puppet masters ???
I can't help but think that this event may have been a set-up from the start. Using Putin's playbook we arrest you and give you safe passage, we hold a sham trial, you are convicted, and pay me a billion$'s or more plus some oil for a pardon. Oh, and we get your country too. Easy stuff.
Increased Venezuelan oil production will give countries around the world (like India) an alternative to Russian oil, although I don’t know if this is part of Trump’s motive for getting rid of Maduro. Trump might have just wanted to help his big oil friends.
I agree with @chinfist, hopefully not much change in the markets on Monday, unless something else happens …
I'm not supporting today's actions. Just looking at it as a potential influence on investments near term.
Major World equity markets.
Global Financial futures, bonds and related.
The 'clock' symbol will turn 'green', from 'red' when that market is trading (symbol at the right edge of the charts).
As with the 'drill baby drill' nonsense in the US, the oil cartels like oil at a certain price and won't just produce more because they can. Suddenly flooding the market with cheap oil may not always be in *their* best interests, and their interests always come first.
It's the perfect target for a predatory attack if a bully country is seeking commodities (and a nice distraction from their other issues).
but didn't know about the large GOLD and rare mineral deposits.
Nor did I. Thanks for your post.
That FIFA Peace prize must be shining bright on the mantel right now. So much peace.
I hope we haven't set a new precedent whereby presidents can be kidnapped on a whim. I'll remind folks that our unhinged president has complete immunity - DO NOT STEAL HIM.
Looking at you, Canada (and winking, too).
Added: NO