Volatility Increases Amid Middle East Conflict and Earnings Reports

It has been a volatile evening and morning for world markets overnight and into this morning. Fear gripped markets late last evening when initial reports of Israel launching an attack against Iran sending stocks lower and oil higher.

Into this morning cooler heads have prevailed somewhat, but it remains clear that amid conflict in the Middle East and Ukraine, political and event risks remain high heading into the weekend. It comes as no surprise then that the VIX Volatility Index, a gauge of investor fear, has spiked up 4% overnight.

US index futures are currently down 0.1%-0.2% after plunging over 1.0% last evening. In Europe today, the Dax is down 0.6% and the FTSE has fallen 0.5%. On the other hand, US Crude Oil is down 0.7% after spiking over 4.0% overnight. Gold has also given back overnight gains, currently trading down 0.25%. Copper, meanwhile, is up another 0.9%, approaching $4.50/lb and Bitcoin has jumped 2.5% bouncing back from recent weakness. The US 10-year treasury note yield is steady near 4.60%.

The other big story of the day is the market reaction to earnings reports. Netflix* is down 6.3% premarket despite handily beating expectations on earnings ($5.28 vs street $4.52). Investors appear to have been disappointed by a soft revenue forecast this year and management’s plans to stop reporting subscriber numbers in 2025. In what appears to be a cautious environment for equities, several other notable companies reporting results today are down around 1.5% in premarket action including Schlumberger, Proctor & Gamble, and American Express, all of whom posted better than expected results.

*Shares of Netflix are held in some portfolios managed by SIA Wealth Management.  

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