After President Trump authorized a military strike killing a top Iranian military commander, the escalating conflict sent stocks down around the world, and oil and gold prices up on the first Monday of the new year.
Brent oil prices, the international benchmark, hit the $70 mark for the first time in three months and the price of West Texas Intermediate, the American oil benchmark, reached more than $63 a barrel after the Pentagon's announcement confirming an airstrike at Baghdad's airport. Crude oil last hit the $70 mark in September after drones suspected to have been launched by Iran struck Saudi Arabian oil plants. Saudi Arabia, Iran, and Iraq account for almost half of the world's oil reserves.
Prices are up amid a growing list of concerns after the killing of Gen. Qassem Soleimani: Iran may close the Strait of Hormuz, has already threatened retaliation, and said it will no longer abide by the 2015 nuclear deal the U.S. withdrew from two years ago, and Iraq voted to expel U.S. troops. The State Department warned of a "heightened risk" of a missile attack near U.S. bases.
It is unclear how Iran will respond to Trump's unilateral move. Oanda's Jeffrey Halley noted that "a big fat dollop of geopolitical uncertainty has landed on investors desks" in a report.
But J. Jay Park, CEO of ReconAfrica, said the geopolitical uneasiness isn't, alone, enough to continue driving oil prices up. He said what may continue to drive up prices is a change in supply. Park said supply, demand, OPEC decisions and compliance, geopolitics, and public sentiment about those four items affect oil prices. Uncertainty in Iran, coupled with a change in supply or demand may change the game. Iran may choose to close the Strait of Hormuz, a move Britain has forestalled by sending the Royal Navy to help ships pass through the Strait, through which 21 percent of 2018's global petroleum liquids consumption flowed.
"If that were to happen, the sky's the limit, over $100 easily," Park told Cheddar on Monday.
With the region on edge, stocks fell in Japan, Hong Kong, South Korea, and across European markets.
In the meantime, Park said the current crisis may not drive up oil prices further.
"In the recent past we've seen a number of conflicts, for example the suspected Iranian attack on Abqaiq in Saudia Arabia, that kind of underwhelmed in terms of the extent to which these changes affected the overall price and how long that effect lasted," he said.
While people have been spending more time on their phones throughout the pandemic, a new report shows they were also spending more money as well. A review from Sensor Tower on the global app ecosystem this year found that the app economy will see record consumer spending in 2021, up nearly 20% from 2020. Sensor Tower director of sales and financial institutions Anthony Bartolacci joins Cheddar News' Closing Bell to break down the report.
Megan Horneman, Director of Portfolio Strategy at Verdence Capital Advisors, joins Cheddar News' Closing Bell, where she says there is some profit-taking ahead of the upcoming Fed meeting, and elaborates on some of the topics investors will be watching for more closely this week.
Markets closed higher Friday, with the S&P 500 notching a record close, even amid data this morning showing inflation rising at a fast pace. Jay Hatfield, CEO of Infrastructure Capital Advisors, joins Cheddar News' Closing Bell to discuss today's market close, why markets are shrugging off November's hot inflation data, how the Fed will take CPI into consideration, and more.
The future of gambling in Florida recently suffered a major setback after a federal appeals court rejected a request from the state and the Seminole Tribe to allow online sports betting in the state. Now, the tribe has been forced to stop taking bets on its Hard Rock sportsbook app. ESPN gaming writer David Purdum joins Cheddar News' Closing Bell to discuss what this could mean for the future of sports betting in Florida.
Apple is on the verge of becoming the world's first publicly-traded $3 trillion company. The iPhone maker's stock needs to hit $182.86 to surpass the $3 trillion mark. CFRA Research senior industry analyst Angelo Zino joins Cheddar News' Closing Bell to discuss.
Lance Ippolito, Head Trader at the Future Of Wealth, joins Cheddar News' Closing Bell where he discusses the factors that have contributed to the recent slide of major cryptocurrencies like Bitcoin and Ether.
Web3 software startup Thirdweb has raised $5 million in a funding round, coming from a group of high-profile investors, including Gary Vaynerchuk and Mark Cuban. Thirdweb says it is paving the way for the revolution surrounding the new iteration of the internet known as web3, by offering users free tools to build their own web3 projects. Thirdweb's co-founders Steven Bartlett and Furqan Rydhan join Cheddar News' Closing Bell to discuss.
Decentralized talent network Braintrust recently closed an atypical equity deal that involved investors buying $100 million in Braintrust tokens, the company's cryptocurrency. Braintrust's talent network is built on blockchain technology, which the company says allows it to be owned and built by users, instead of a centrally-controlled corporation. Braintrust users can also earn tokens for their contributions to the network and its growth. Braintrust co-founder Adam Jackson joins Cheddar News' Closing Bell to discuss.
