Man accused of plot to assassinate Trump testifies Iran pressured him, says Biden and Haley were other possible targets

In a Brooklyn federal trial, Pakistani businessman Asif Merchant testified that an Iranian Revolutionary Guard operative pressured him to hire hit men — for which he handed $5,000 to undercover FBI agents — to assassinate U.S. political figures including Donald Trump, Joe Biden and Nikki Haley. Merchant says he acted under duress to protect relatives in Iran and expected to be arrested; prosecutors counter that he did not seek law-enforcement help or disclose facts supporting a duress defense. The case amplifies geopolitical and political-risk narratives tied to Iran and U.S. security, but presents limited direct market-moving information for most asset allocations.

Analysis

Market structure: Geopolitical shock-risk lifts defense, security software and safe-haven assets while pressuring travel/consumer-exposure names. Expect a rotation into large-cap defense primes (LMT, RTX, NOC, GD) that can win short-term contract reprioritisations and surge funding; oil (Brent) is likelier to see a $3–$10/bbl jump on supply-risk headlines, pushing XLE/USO flows higher. Cross-asset mechanics: short-term bid to Treasuries (10y yield down 20–75bp on risk-off spikes), USD strength and a VIX uptick (+5–15 vol points intra-week) are probable.

Risk assessment: Tail risks include rapid escalation (strikes on shipping or regional bases) or crippling sanctions/cyberattacks that widen to 3–6 month economic impacts; probability low (~5–15%) but impact high (commodity shock, insurance squeezes). Immediate horizon (days) is headline-driven; short-term (weeks) sees tactical flows into defense/energy; medium-term (quarters) depends on de-escalation vs sustained conflict which would favor persistent capex into defense and energy security. Hidden dependencies: election calendars, US domestic security responses, and insurance/premia in maritime logistics that can amplify commodity moves.

Trade implications: Favor asymmetric, size-limited long-defense and short-travel exposures with options to cap downside. Use 3–6 month call spreads on LMT/RTX and buy 1–2% notional GLD + 1% TLT as hedges for a 30–90 day window; consider a pair trade long (LMT, NOC) vs short (AAL, DAL) sized to neutralize beta. Monitor Brent > $95 or VIX > 30 as add-on triggers and cut positions if Brent reverts < $85 or VIX normalizes below 16 within 14 trading days.

Contrarian angles: The market may overpay defense names immediately; historical parallels (2019–2020 Iran incidents) show oil and gold spikes mean-revert in 2–8 weeks absent supply disruption. If headlines stabilize, cyclical recovery names (airlines, small caps) can rebound sharply—look to buy weakness in IWM or airline basket after 10–15% selloffs and once VIX falls >25% from peak. Use tight sizing (1–3% positions) and defined-option structures to avoid forced de-risking in a volatile political-news environment.

Key Decisions for Investors

• Establish a 1.5% portfolio long position in Lockheed Martin (LMT) using 3–6 month call spreads (buy 1.5% notional 5% OTM calls, sell 1.5% notional 20% OTM calls) to target 12–30% upside if defense re-rates; hold 30–90 days and reduce if newsflow normalizes or if 10y yield rallies >40bp.
• Allocate 1% to GLD and 1% to TLT as immediate hedges for the next 30–60 days; add another 0.5% GLD if Brent > $95 or VIX > 30, and cut GLD/TLT if Brent falls below $85 or VIX < 16 within two weeks.
• Implement a relative-value pair: go long 1% each LMT and NOC and short 2% combined AAL + DAL (equal weight) to express defense vs travel skew; unwind if airlines outperform by >10% or defense underperforms by >10% over 30 days.
• Buy a tactical VIX call spread (3-month 25–40 call spread) sized to 0.5–1% of portfolio as crash protection; if VIX spikes above 40, monetize half the position and widen hedges in equities and commodities.
• If Brent sustains >$95 for 5 consecutive trading days, add a 1% tactical position in XLE or USO (prefer XLE when basis and contango costs are high) with a 3–6 month horizon; reduce exposure if Brent < $85 or OPEC signals coordinated supply response.