Extended War Trades and Retailer Earnings

The prospect that the conflict with Iran could drag on and pose risks to energy production and global supply chains appears to be driving capital flows across world markets overnight.

The Monday rebound, which carried US indices to a roughly flat finish, has faded. Overseas markets have sold off, including declines of 3.1% for the Nikkei, 1.1% for the Hang Seng, 3.3% for the DAX, and 2.6% for the FTSE. US index futures are down 1.3% to 1.7% this morning, with NASDAQ futures leading to the downside.

Crude Oil is surging again, up more than 6.0%. US Crude is trading above $75.00/bbl, while Brent Crude is approaching $82.50/bbl.

A flight into the US Dollar is putting pressure on many currencies and alternative assets. Gold is down 2.0%, Silver is down 6.7%, and Bitcoin is down 2.9%, while the Euro and Pound are lower by 0.7%. Interestingly, the defensive Yen is down only 0.2%, and the Loonie is holding steady.

It is a quiet day for economic data, though several retailers are moving on earnings. Target ($2.44 vs Street $2.14) and Best Buy ($2.61 vs Street $2.46) are up 4.1% and 11.9% respectively in premarket trading after beating expectations. Sea ADR ($0.63 vs Street $0.76) is down 14.1% premarket following disappointing results. Costco reports after the close on Thursday.

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