To The Moon

U.S., Iraq, Iran Tension Drives Early Trade

Strain between the U.S. and the Middle East intensified Monday, following a U.S. drone strike on Thursday that killed Iranian General Qassem Soleimani in Baghdad. Iraq's parliament voted Sunday to eject U.S. troops from the country. Iran ended its compliance with the limits on uranium enrichment. President Donald Trump threatened Iraq with sanctions and a bill for military services, and said the U.S. had identified 52 targets it would attack if Iran retaliates for Soleimani's death.

The fingerprints of that tension were all over the stock market in early trade. Newmont Goldcorp. (NEM) surged 2.2% as traders seeking safe havens drove gold prices to a six-yeare high. Weapons makers Lockheed Martin (LMT) and Northrop Grumman (NOC) gained nearly 2%. Domestic oil producers Marathon Oil (MRO) and Pioneer Resources (PXD) bolted more than 1% higher, boosted by oil prices swelling on concerns of a disruption in supply.

Exxon Mobil (XOM) led the early positive action on the Dow Jones today, up 0.3%. The Nasdaq 100 showed no stocks gaining ground in early premarket action.

Global Markets: Europe, Japan Dive

Hong Kong's Hang Seng tumbled 0.8%. The Shanghai Composite edged a fraction lower. In Japan, the Nikkei 225 dived 1.9%, playing catch-up to global markets as it reopened after an almost week-long break.

Markets in Europe fell hard as tension between the U.S. and Iran continued to unfold. Germany's DAX stabbed 1.5% lower. The CAC-40 in Paris dropped 1.1%, and London's FTSE 100 traded down 1% just past midday.

Dow Jones Today: Hold Or Break The Trend?

The early orientation of the Dow Jones today points to the index's most serious undercut of its short-term 10-day moving average since early December. The prior break below that line led to a 3% pullback, which found support at the index's 50-day moving average. When the Dow broke below that line in early October, it pulled back 4.3% before rebounding from support at its 200-day line.

From another angle, the Dow Jones Industrial Average and other major indexes are trading within a channel of trend lines formed since October. The highs and lows of the indexes since October have kept comfortably within these lines. Premarket trade suggested the Dow would open below the 28,500 level, marking a break in that trend.

Stocks on the Dow Jones today are gearing up for the fourth-quarter earnings season. Walgreens Boots Alliance (WBA) reports on Wednesday. JPMorgan (JPM), UnitedHealth Group (UNH) and Goldman Sachs (GS) roll out results the following week.

Gold, Oil Prices Sharply Higher

Oil prices moved higher as markets sought to value in potential supply disruptions linked to increased security threats in the Middle East. West Texas Intermediate jumped 1.2% to $63.83 a barrel. The benchmark held below Friday's high of $64.10, which had marked oil's highest level since April.

Europe's Brent crude benchmark on Monday was up 1.5% to $69.63, after briefly topping the psychologically import $70 level.

Gold prices soared 1.8%, to $1,580 an ounce, trading at its highest levels since April 2013. Bonds edged up, sending the 10-year yield down 1 basis point to 1.78%.