Crude oil is rising again amid fears of a broader war in the Middle East. Stocks are lower for the same reason. Treasuries are slipping along with gold, while the dollar is modestly higher.
Iran launched a missile attack on Israel yesterday, firing upwards of 200 missiles at multiple military targets. Most were intercepted by either Israel’s missile defense systems or allied nations like the US and UK. But Israel has vowed to retaliate, and likely in a much broader fashion that it did after a previous Iranian attack in April.
After trading sideways for much of September, crude oil futures have risen amid the escalating Middle East tensions. That includes a rally of around 3% earlier this morning. For its part, the Energy Select Sector SPDR Fund (XLE) is up about 1% in the past week, though still lagging the S&P 500 for the year with a gain of just under 10%.
Hang Seng China Enterprises Index (YTD Chart)
The massive rally in Chinese stocks continued overnight, at least in Hong Kong’s market, where many of them still trade despite a week-long holiday on the mainland. The Hang Seng China Enterprises Index that tracks a basket of Chinese stocks surged more than 7%, the 13th day in a row of gains. Investors are trying to profit from the wave of stimulus measures the Chinese government is rolling out. Others have noted that Chinese stocks remain wildly undervalued relative to US stocks, even after the big recent bounce.
The heath insurance company Humana Inc. (HUM) plunged as much as 25% in the early going after warning about Medicare Advantage plan enrollment. Because fewer seniors are signing up for its highest-rated plans, the firm may not see as much bonus income as expected. Nike Inc. (NKE) is another loser, with the stock off around 8%. While the shoe and sportswear maker has touted a turnaround effort, it yanked its full-year sales target – suggesting not all is going to plan.
