Ouch, That Was a Rough One!
That was a rough day for most U.S. financial markets. The major equity indices took a hit on Thursday as tensions in the Persian Gulf and Red Sea pushed WTI crude oil futures above $93 per barrel. Additionally, disappointing performance by Tesla ($TSLA) and Alphabet ($GOOGL) for their second quarters put pressure on the tech/growth type names. Alphabet ran into a free cash flow problem. Tesla just had a sloppy three months, badly missing on profitability.
The S&P 500 gave up 1.21%, while the Nasdaq Composite was slapped around for a loss of 2.15%. The yield paid by the U.S. 10-Year Note ran up to 4.7% while the U.S. Two-Year Note paid 4.36% by day’s end.
Markets seemed to take it badly when President Trump warned that U.S. forces would destroy an Iranian bridge or power plant for every vessel attacked in the Strait of Hormuz. Iran threatened to target infrastructure and energy in the region where the U.S. has overt interests.
Industrials were leaders on Thursday, led by Defense as Lockheed Martin ($LMT) popped for a gain of 10.5% in response to earnings. RTX ($RTX), which is the old Raytheon, also ran 7.3%. Discretionaries were pummeled as Tesla put the whammy on the autos.
One more day this week, gang. Dougie is back tomorrow. It’s always a pleasure to go through the trading day with you when I get the chance. Have a nice evening and may God bless you all.
Sarge out.
Position: Long LMT, RTX equity
