the war is nearly complete

Day 10 of the Iran war.

Yesterday was one of the most dramatic trading days I have seen in a long time. Oil went from nearly $120 a barrel to $85 in a single day. Stocks went from almost 900 points down to closing up 239 points. All because of four words from Trump.

Let me break it all down for you.

🎯 "THE WAR IS VERY COMPLETE, PRETTY MUCH"

Monday afternoon, Trump dropped a bombshell during an interview.

"I think the war is very complete, pretty much," he said. "They have no navy, no communications, they've got no air force. Their missiles are down to a scatter."

He also told reporters he is "very far" ahead of the original 4 to 5 week timeline the White House had set. And he added something interesting: he is "thinking about taking over" the Strait of Hormuz.

Now here is the thing, Trump also said the US has NOT yet hit some of Iran's most sensitive targets, including its electricity infrastructure. And he threatened to hit Iran even harder if it interferes with oil shipments. So "very complete" and "we still have more targets" in the same breath. Classic Trump. Markets chose to hear the optimistic part.

But I don’t hear any tone of de-escalation or deal making. So we are still solidly in Step 4 of Trump Playbook.

If you don’t know, what I am saying, you need to watch the latest live webinar on it. https://investwithpete.teachable.com/courses/614054/lectures/65028110

Public access is until Sunday! SMG members you have forever access!

Pete's Take 👇

This is a relief rally, not a victory lap. Trump's comments moved oil $30 in two hours. That is not a fundamentals driven move. That is a market that was coiled so tight it just needed an excuse to release. The underlying reality has not changed: the US has so far rejected Iranian overtures to begin talks, and potential off-ramps are unlikely to materialise in the near term. Watch what happens, not what is said.

It also shows a market that is ready to return to bullish trend when the condition is ready! So pivot when necessary!

🛢️ THE WILDEST OIL DAY SINCE THE GULF WAR

Oil hit nearly $120 per barrel late Sunday before settling at roughly $95 Monday afternoon. Then Trump's CBS comments dropped and oil fell to $86 per barrel.

Peak to trough in one session: almost 30%.

Gas prices have risen 50 cents per gallon since the war with Iran started. That pain is already at the pump for common folks. It does not disappear overnight just because Trump says the war is close to done.

G7 energy ministers are meeting Tuesday morning to discuss releasing strategic oil reserves. They are set to meet virtually to discuss a potential release, with over 400 million barrels potentially available. That would be a serious coordinated intervention if it happens. Watch for that headline today.

Pete's Take 👇

Oil at $85 to $90 is still 30 percent above where it was two weeks ago. The relief trade happened. Now comes the real question: does the Strait reopen? Until ships are actually moving freely through there again, every oil price rally is one bad headline away from reversing. Stay positioned. Do not over-rotate back into airlines or consumer stocks just yet.

📉 HOW MARKETS ACTUALLY CLOSED

The S&P 500 rose 0.83% to close at 6,795. The Dow added 239 points to end at 47,740. The Nasdaq jumped 1.38% to settle at 24,967.

Those are the closing numbers. But the journey to get there was brutal. The Dow was down nearly 900 points at its session low. Asia had been a bloodbath overnight. Nikkei down 5 to 6 percent. Korea trading like a meme stock again.

This morning, Asian equity futures for Australia, Japan, South Korea and Hong Kong are all climbing after the Wall Street reversal. WTI crude is dropping as much as 10% in early Tuesday trading.

So Asia is set to recover some ground today. That is good news.

The sectors that moved? Defence stocks held up. Energy pulled back from highs but is still the top performing sector for the year. Airlines remained under pressure. Cruise lines got hit hard with Carnival down more than 6% on the day.

Pete's Take 👇

One thing I want you to notice. The U.S. stock market has a history of bouncing back relatively quickly from past military conflicts, as long as oil prices don't stay too high for too long. That is the key phrase. Too long. We are at 10 days. If Trump is right and this wraps up in the next week or two, the recovery could be swift and sharp. If it drags, the stagflation gets very ugly.

What I am watching this week:

G7 oil reserve release: if it happens, oil drops fast and markets rally hard.

CPI data coming out Tuesday: if inflation is already spiking before this war, the number is going to be bad. That matters for interest rates.

Trump-Xi summit on 31 Mar is still on the calendar. If China steps in as a mediator, that is the real off-ramp here.

If peace comes faster than expected, rotate back into beaten-up quality names. Industrials, tech, quality consumer. The stocks that got unfairly punished by oil fear.

If the war continues past this week, energy and defence remain your friends. Gold above $5,000 remains your hedge.

One war does not end a bull market. But it can delay it.

Position. Don't predict.

Happy Hunting!

Pete
Invest with Pete

🚨‼️ By the way, I’ll never PM anyone on telegram or any other social media platforms. If you receive any “Pete” messaging you, these are scammers impersonating me. Pls beware!

The information provided in this newsletter is for informational purposes only and does not constitute financial advice. Readers should seek their own independent financial advice before making any investment decisions. Please note that while Pete is a portfolio manager, the opinions expressed in this newsletter are his own and do not represent the views of any organization. Always perform your own research and due diligence before investing.