The U.S. Struck Iran Again On Sunday: A September Rate Hike Is Now The Base Case

Geneva Investor 3.85K Followers Follow Summary The U.S. struck Iranian rocket launchers on Larak Island on Sunday, the first strike in over a month, and Iran retaliated against two U.S. bases in Jordan. I think Kevin Warsh's Jackson Hole speech on Friday mattered more, moving September hike odds from 36% to above 60% and changing how the market should read Iran headlines. Brent at ~$90 feeds the headline inflation Warsh is watching, but the gasoline pass-through will not reach the CPI report the Fed sees on September 11. A September hike is now my base case, which I estimate leaves the S&P 500 with roughly 5% of multiple compression to absorb, and up to 12.5% if a sequence. I retain a Buy on U.S. equities, as tightening into an energy supply shock does not add barrels to the market and is unlikely to hold. SlavkoSereda/iStock via Getty Images U.S. forces struck two Iranian rocket launchers on Larak Island on Sunday after Iranian forces were observed preparing to deploy mines into the Strait of Hormuz. It was the first U.S. strike in over a month. Iran then This article was written by Geneva Investor 3.85K Followers Follow I write about Macro and fundamentals, with the (painful) awareness momentum and sentiment are what really matters. That’s why I never try to time the market and I only buy stocks if I am willing to hold them for at least 10 years. When it comes to fundamentals, everybody knows the market is forward looking, but few understand what that means. I don’t look at a P/E number and decide to buy if a stock is “cheap”. I see the market as literally just the meeting point between demand and supply and I always try to understand what it sees in a stock beyond the numbers. This often implies trying to understand sectors, industries and long term growth trends. My approach requires ingenuity, curiosity and a good dose of naivete, as well as being comfortable with (sometimes) going against the current.I am based in Geneva, Switzerland (hence my SA name). Friend "Rex Investing" is also a contributor to Seeking Alpha. All opinions and analysis are exclusively my own.You can follow me on Twitter @ x.com/GenevaInvestor. I am also on medium.com/@genevainvestor. Analyst’s Disclosure: I/we have a beneficial long position in the shares of VOO, QQQ, GLD, BTC-USD either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.