War to Peace

The war machine
It springs to life
Opens up one eager eye
--Nena

Last nite Iran fired missiles at two US military bases in Iraq. US stock futures plunged nearly 2% and gold creased $1600/oz for the first time in about seven years.

Overnight ES futures down 1.7% and recovered to positive BEFORE the NYSE open.

The last example of a 1.6% OVERNIGHT decline and recovering BEFORE the NYSE was the election night 2016.

ES futures were limit down 5% on election night. They recovered to up over 1% BEFORE the NYSE. pic.twitter.com/aT4KlnNczA

— Jim Bianco (@biancoresearch) January 8, 2020

After news circulated that a) damage to the US bases was light and there were no casualties, b) President Trump was not immediately going to respond to the attack, and c) Iran leaders signaled that they were unwilling to escalate the situation further, the fear trade came off and US stock futures were in the green pre-market.

One tiny example of what can happen when a situation moves from war to peace.