Is the War Over? If so, Bears are Trapped

On Feb 28 the United States attacked Iran, launching Operation “Epic Fury,” a clear geopolitical escalation that materially raises market uncertainty. Expect risk-off flows with elevated volatility, safe-haven bids into Treasuries and gold, USD strength, and near-term oil upside (multi-percent moves); consider reducing cyclical equity exposure and implementing hedges (options or increased cash) for the near term.

Analysis

On Feb 28 the United States attacked Iran, launching Operation “Epic Fury,” a clear geopolitical escalation that materially raises market uncertainty. Expect risk-off flows with elevated volatility, safe-haven bids into Treasuries and gold, USD strength, and near-term oil upside (multi-percent moves); consider reducing cyclical equity exposure and implementing hedges (options or increased cash) for the near term.