Source: Benzinga Feeds
One of the potential threats many people pointed out looking ahead to 2020 was geopolitical instability. What they might not have expected was for it to happen so suddenly here at the start of the year. Last night’s U.S. action in the Middle East sent crude prices spiking. Stock futures tumbled, giving back basically all the gains from Thursday in pre-market trading early Friday. Crude is back where it was in September after the attack on Saudi oil facilities, up above $63 a barrel. Iran has vowed to retaliate, so investors might be on tenterhooks waiting for that. Volatility, which dropped sharply Thursday, scurried quickly back above 15 for the Cboe Volatility Index (VIX). One thing investors don’t want to do here is panic. Making moves out of fear isn’t a strategy. Instead, it’s often better to be prudent and let things play out. Sometimes these geopolitical situations seem scary and threatening at the start but don’t end up having a major long-term impact on markets. For instance, the situation in North Korea a couple of years ago, or the attack on Saudi Arabia last year.