Iran and Israel traded missile/drone fire in the last week, which could be the beginning of a more serious geopolitical issue — with the effects reaching far beyond the Iron Dome — or it could just be another brick in the wall of Middle East scuffles that brings pain and discomfort in the short term for those immediately affected but change nothing fundamentally in the long term for themselves or the rest of the world.
What did the markets think? They were apathetic. Crude oil prices jumped higher initially on both attacks, but faded the move quickly and remain a couple of dollars lower for the week — with the May crude oil futures trading near $83.50 as of mid-morning Friday.
Gold, which has been moving aggressively higher since the end of February, is up $20 per ounce for the week with April gold futures trading near $2,380 per ounce. That is less than a 1% move for the week.
The S&P is down a little over 2% on the week, while the Dow is close to unchanged for the week. Both the S&P and the Dow are down significantly in the month of April by a little more than 5% in total value. So, the trend was in place before the recent hubbub in the Middle East and probably has more to do with other factors.
The futures markets cannot predict the future, but the participants in said markets attempt to do just that when they place a bet one way or another and so far, the conflict is a bug on the windshield.
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