The mood in markets continues to deteriorate into the weekend. I don’t know if that’s pricing in the chance of a weekend escalation or it’s a realization the war could go on for another month (or longer) and that could cripple energy markets.
Tech had been vulnerable to AI narratives unwinding all year and it’s worsening now.
I worry that we’re still a long way from pricing in a global recession, energy shock and rate hikes. The market has shown patience with the war but Marco Rubio today indicated another two to four weeks. At the outset, Trump said 4-5 weeks and then repeatedly (including yesterday) said the US was ahead of schedule. That’s just not the case and the market is now indicating that it’s losing faith in the White House to wrap this up and get the oil flowing.
The Nasdaq is down 1.9% on the day.
Nasdaq Comp
The good news is that Iran is expected to float a proposal to the White House today or tomorrow and that could be the starting point for actual negotiations. We shall see.
In terms of movers, the MAG7 looks like this:
- Meta (META): down 4.5%
- Amazon (AMZN): down 3.4%
- Microsoft (MSFT): down 2.0%
- Alphabet (GOOGL): down 2.4%
- Nvidia (NVDA): down 2.0%
- Tesla (TSLA): down 3.3%
- Apple (AAPL): up 1.2%
Microsoft is particularly ugly and is down 35% from the high in October. You have to wonder if they announce a cut to capex at some point.
The chart I want to highlight though is TSLA, which is at the lowest since September. Despite that, it still trades at extremely lofty multiples. The consensus for this year is just $2.02 in earnings, putting the P/E multiple at 177x.
TSLA daily
Just crossing now.
Iran’s foreign minister writes:
Israel has hit 2 of Iran’s largest steel factories, a power plant and civilian nuclear sites among other infrastructure. Israel claims it acted in coordination with the U.S.
Attack contradicts POTUS extended deadline for diplomacy.
Iran will exact HEAVY price for Israeli crimes
Ugly stuff.
