US investors quickly shake off Iran's missile strikes
Posted January 8, 2020 7:04 a.m. EST
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Iran has retaliated against the United States for its killing of top general Qasem Soleimani by firing more than a dozen ballistic missiles at two Iraqi military bases housing US troops — but for now, investors aren't showing much alarm.
Markets react: At first, global traders sold stocks, and markets in Asia closed lower. Gold prices leaped above $1,600 per ounce, while Brent crude, the global benchmark for oil, jumped as high as $71.75 per barrel.
But initial reports that there were no US casualties from the attack have since assuaged investors' fears that the strike will result in yet more escalation. President Donald Trump tweeted that "All is well!" and said he'd make a statement on Wednesday morning.
The latest: US stock futures have recovered, and Brent crude is back to $68.64 per barrel.
"Based on available evidence, this round seems over," Henry Rome, an analyst at political risk consultancy Eurasia Group, told clients Wednesday. "The US and Iran will likely revert to their usual, tortured relationship moving forward."
This bolsters the view from many investors that the geopolitical turmoil afflicting markets in recent days will be short-lived.
"Yes, there is a potential that the Iran-US tensions escalate," Mislav Matejka, head of global and European equity strategy at JPMorgan, said in a note to clients this week. "But we note that historically limited war campaigns, as well as terrorist incidents, tended to have only a transitory and typically limited impact on equities."
On the radar: A Boeing plane bound for Ukraine crashed in Iran shortly after takeoff on Wednesday morning, killing 176 people. A Boeing spokesperson told CNN that the company is "aware of the media reports out of Iran" and is "gathering more information." Shares of the plane maker are down 2% in premarket trading.
Carlos Ghosn to make first public appearance since his escape
Carlos Ghosn is ready to tell his side of the story.
The former Nissan chairman plans to speak to reporters in Beirut on Wednesday, his first major public appearance since his stunning escape from Japan last week, my CNN Business colleague Sherisse Pham reports.
The backstory: Ghosn was first arrested in Tokyo more than a year ago, and had been awaiting trial there on charges of financial wrongdoing, including allegations that he understated his income for years and funneled $5 million of Nissan's money to a car dealership he controlled. He managed to flee the country last week despite strict bail conditions.
What to expect: Ghosn has repeatedly denied the charges. He issued a brief statement after arriving in Lebanon that slammed Japan's "rigged" criminal justice system, which boasts a conviction rate above 99% once suspects are charged.
He's now expected to further criticize the country's court system, and give details on what he has claimed was a plot to oust him from the auto alliance he built between Nissan, Renault and Mitsubishi Motors.
The latest: Japanese prosecutors on Tuesday issued an arrest warrant for his wife, Carole Ghosn, accusing her of giving false testimony during a court hearing last April.
Carole Ghosn is in Lebanon with her husband, according to CNN affiliate TV Asahi. Carlos Ghosn has denied reports that his family members were involved in helping him flee from Tokyo.
These are Blackstone's boldest calls for 2020
Private equity giant Blackstone is out this week with its list of 10 potential surprises for 2020. On the list: No "phase two" US-China trade deal, Democrats take the US Senate and markets get hit by "several" corrections greater than 5%.
Vice Chairman Byron Wien and Joe Zidle, the chief investment strategist in the private wealth solutions group, define a "surprise" as an event that a typical investor assigns a 33% probability, while they see a more than 50% likelihood that it will happen.
Another prediction: Wien and Zidle say that problems with Boeing's 737 Max plane will probably be fixed, ending the hold on deliveries to airlines. They predict that the plane would likely go on to become a mainstay around the world, helping airlines boost profits and allowing their stocks to become market leaders.
Constellation Brands and Walgreens Boots Alliance report earnings before US markets open. Bed Bath & Beyond will follow after the close.
The ADP private employment report for December arrives at 8:15 a.m. ET.The latest on US crude oil inventories follows at 10:30 a.m. ET.