As of now, assuming Iran holds to it, there is a two-way ceasefire between that country and the United States*. And as a condition of that ceasefire, Iran has completely opened the Strait of Hormuz.
How has this affected stocks and oil prices?
Well, as I write this, the dow futures are about 48,000, up 1,200 points, and oil futures are at about $95 a barrel, down over 15%.
If this holds and becomes permanent – about as big an “if” as you can imagine, given that we’re dealing with Iran – it is an excellent bet that the dow will ccontinue to climb and oil prices will continue to fall.
The result? In return for several weeks of a depressed stock market and higher oil/gas prices, we have destroyed Iran’s air force, its navy, severely damaged its missile capabilities and caused massive damage to its infrastructure. Now it will have to use its resources to rebuild, which means denying some or all of its funding for terrorist groups like hamas, hezbollah and the houthis.
Simply stated, we have taken out Iran offensive capabilities for the short and mid term at least, and made it difficult if not impossible to fund the terrorist groups that rely on Iran for their resources.
Oh, and we have established beyond any doubt that we are the most capable, thus the most dangerous-to-be-reckoned-with, military force on the planet, which may well deter other countries from messing with us in the future.
Is that a good deal? Was it worth those few weeks? Talk about a question that answers itself!
The domestic political results of what is happening here are immense. I’ll talk about them in a subsequent blog. But, for the moment, let’s see if and how this ceasefire works out. Keep your fingers crossed.
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*There is NO ceasefire between Iran and Israel. Iran has fired missiles at Israel since the US/Iran ceasefire started. I assume Israel will fire back.
