Things you need to know.
- The temperature remains high.
- Iran/Israel trade missiles overnight.
- Tehran considers closing the Strait – but decides no.
- The world awaits the next move.
- US futures are up, oil is up, gold is down, and the dollar is up.
Stocks closed mixed on Friday – but that is NOT the story today…..
On Friday I ended my note with this:
“Let’s see what happens today – it is Friday, and a lot can happen over the weekend…. Understand that there is a significant risk of the market gapping up or down on Monday based on what happens this weekend…”
And BAM!
On Saturday, June 21, 2025, the U.S. military dropped 14 GBU-57 Massive Ordnance Penetrator (MOP) bombs (a.k.a – Bunker Buster Bombs) on 3 Iranian nuclear sites, with 12 targeting the Fordo facility and 2 targeting Natanz. 24 Tomahawk missiles were fired from the sea targeting the Esfahan site and this will go down in history known as
Operation Midnight Hammer.
Soon after Trump posts this on X –
“We have completed our very successful attack on the three nuclear sites in Iran, including Fordow, Natrnaz and Esfahan. All planes are now outside of Iran air space. A full payload of bombs was dropped on the primary site, Fordow. Congratulations to our great American Warriors. There is not another military in the world that could have done this. NOW IS THE TIME FOR PEACE….”
And there it is – no more will we or won’t we? No more TACO name calling – Trump certainly did not ‘chicken out’, he did exactly what he has been telling us he was going to do. He gave them 60 days to come to the table and negotiate, to find a solution, to stop the madness, in fact – he gave them nearly 2 years, because for the past 2 years (during his campaign) he has been telling us and the world that Iran cannot and will not have a nuclear weapon.
Now, the Ayatollah chose differently – he told Trump to ‘Kiss my A$$’…..and he told the world that it was ‘not negotiable’….and it was clear as day that the Iranians were not interested….Tell me I’m wrong……
And so, on Saturday night it was all over, the bombs fell, and the 3 sites were destroyed – and the world breathed a sigh of relief – even China and Russia chose to ‘keep quiet’ (and THAT speaks volumes…)
The only two countries showing support were Venezuela and Nicaragua – how’s that working for you?
Now, just fyi – from an investment perspective – BA makes the MOP’s, LMT makes the B-2 Stealth Bomber, RTX makes the Tomahawk missile, LHX &NOC played roles along the way – whether it was communications, guidance technology, design & production…while GD built the ‘Ohio-Class Submarine’ – the USS Georgia – that fired the Tomahawk missiles. It was an All-American effort…..and ALL of those names are higher in pre-mkt trading. And if you jumped into the Aerospace & Defense ETF’s when Trump took office – you have been handsomely rewarded – XAR +19% and ITA +24%.
On Sunday evening– oil prices shot higher – jumping 4% on the opening – trading as high $78.40 on the idea that Iran will try to close the Strait of Hormuz blocking shipments from other Mid-East suppliers. But by 7 pm Sunday – it gave it all back – silencing everyone out there that is calling for WWIII – the market is telling you it is NOT happening. This morning oil is trading at $74.57 – up 70 cts or 1%. Just an fyi – closing the Strait of Hormuz would hurt Iran far more than almost anyone else – and it would enrage the Chinese that depend on Iranian oil – which would not be good for the Ayatollah – Capisce?
Gold did the same thing, initially rallying by 0.8% or $30 – on the idea of more unrest – only to fade and go negative – this morning gold is trading at $3,366 DOWN $19 or 0.5% – leaving it just $20 above trendline support ($3,342) – a level I think it will test and hold.
Now the dollar index is a different story – it is up 24 cts or 0.25% at $99.01. The move in the dollar suggests that investors are flocking to the dollar as the ‘safe haven’ play rather than gold during this middle east geo-political unrest. Remember – gold is UP 25% ytd, the dollar is down 10% ytd…so, at the moment, investors are betting that the dollar is the opportunity here – (think buying the dollar at a discount vs. buying gold at a premium). Trendline resistance for the dollar is $99.46. Should the dollar pierce that – we could easily see a move to $100.25.
The VIX shot up by 6% overnight but has since given most of it back…at 4 am – the VIX is up 1.8% – suggesting investors are not anxious.
Now as you might expect – the left is not happy and quickly condemned the administration vowing to sue and impeach Trump for sidestepping them. Well, here’s a quick note – Recall that Obama did NOT seek or receive formal congressional authorization for the military action in Libya on March 19, 2011. Instead, he relied on his authority as Commander-in-Chief under Article II of the U.S. Constitution and cited the UN Security Council Resolution as international legal justification. The administration informed Congress of the action on March 21, 2011, in a letter to congressional leaders, claiming compliance with the War Powers Resolution of 1973, which requires the president to notify Congress within 48 hours of committing armed forces to hostilities and to withdraw forces within 60 days (extendable to 90 days) unless Congress authorizes further action. So, for everyone out there trying to create hysteria and drama – let’s move on…..
On Sunday – Bloomberg reports that middle eastern stocks ROSE on the headlines as investors there are betting on a swift end to this chapter. Markets in Saudi Arabia, Kuwait, Oman, and Qatar posted modest gains while Israel and Egypt led the way higher, advancing 0.8% and 1.8% respectively.
At 6 pm on Sunday evening US futures sold off fairly big in what looked like a down day – but like oil and gold – the nervousness abated, and futures recovered some of the early losses. At 4 am – US futures went positive and now at 6 am Dow futures are +46 pts, S&P’s +14, the Nasdaq +55 while the Russell is up 4.
Eco data this week:
Monday: S&P US Manufacturing & Services PMI’s – expected to be in expansionary territory at 51 & 52.9 respectively. Existing Home Sales -1.3% (no surprise there).
Tuesday: Richmond Fed Manufacturing Index of -10, the Conference Board Consumer Confidence Index.
Wednesday: New Home Sales – expected to be down 6.7% (again no surprise), Building Permits.
Thursday: 1st Qtr. GDP revised at +3.7% Unchanged and bullish, Core PCE Q/Q + 3.4%.
Friday: Personal Income and Spending and the all important PCE Index on Friday…. – which is expected to unchanged m/m at +0.1% while y/y is expected to be +2.3% UP from +2.1% while Core PCE m/m +0.1% and y/y of +2.6% up from 2.5%.
European markets opened slightly lower – as the day begins.
The S&P closed at 5967 – down 13 pts…. This morning it looks like we will open just a bit higher (which is a WIN) ……. Trendline support is way down at 5812 – a level we could test if the situation suddenly heats up even more than it already is. Overnight – Iranian missiles hit civilian sites Tel Aviv while Israeli missiles continue to hit military sites in Iran.
Remember – political chaos causes short term angst – causing some to run for the hills while others choose to take advantage of the moves. A decline in prices due to geo-political anxiety is an opportunity – mostly because it is emotional. For now, markets will remain mostly on edge until they lower the temperature in the region – something I do not think happens until Iran is completely neutralized.
Call me for a free (no obligation) portfolio analysis. 561-931-0190
Take good care,
kpolcari@slatestone.com
Sources: Bloomberg, CNBC, Reuters, Wall Street Journal
Disclosure: The content provided in this material is designed for educational and informational purposes only, and it is important to note that it does not constitute personalized recommendations. This commentary is not nor is it intended to be relied upon as authoritative or taken in substitution for the exercise of judgment. The comments noted herein should not be construed as an offer to sell or the solicitation of an offer to buy or sell any financial product, or an official statement or endorsement of Kenny Polcari or SlateStone Wealth.
The market commentary is the opinion of the author and is based on decades of industry and market experience; however, no guarantee is made or implied with respect to these opinions, which may not necessarily align with our firm’s standpoint.
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Chicken Francaise
For this you need – thin sliced chicken cutlets, olive oil, egg, flour, s&p, parmegiana cheese, Parsley, lemons, chicken stock, white whine and of course butter.
Start by rinsing the cutlet, pat dry with paper towel.
Beat 4 eggs in a bowl, add fresh grated Parmegiana and parsley.
On another plate put some flour.
In a large sauté pan – heat up some olive oil – enough o fry the cutlets.
Begin by dredging the cutlet in seasoned flour (s&p) and then dip in the egg. Now place it in the hot oil and cook on both sides. After they cook – remove and set aside. Repeat until finished.
Now, in the same pan – add ½ stick of butter – cut into cubes. Slice your lemons into thin slices – dust with flour and then place the lemon slices in the pan and brown on both sides. Add in 1 c of white wine and 1 c of chicken stock and 1 stick of butter – again cut into cubes. Bring to a boil and then turn heat to simmer. Add in a handful of parsley and mix. Now add the chicken cutlets back to the sauce and let them simmer for 2 or 3 mins.
When serving – make sure to top with the delicious lemony sauce..
Buon Appetito
