AI Summary
5 min readHosts Michael Batnik and Ben Carlson open with light banter on birthdays before diving into markets' dominance in shaping events, like announcements timed around trading hours. They cover resilient equities despite Middle East tensions, oil disruptions, inflation fears, and a mix of economic data showing underlying strains in housing and consumer trends, plus updates on stock history, AI effects, and more.
Markets Defy Geopolitical Pressures
Stocks held firm amid Iran conflict escalation, with the S&P 500 dipping just 6.8% at lows before rebounding, even as 40% of its components entered bear markets. Hosts attribute this to the "Trump put"—rapid administration reassurances, like halting attacks, preventing deeper selloffs—and lingering memory of a prior 10% up day, fostering caution against shorting. Unusual pre-announcement trades in futures and oil fueled insider trading suspicions, drawing unanimous disgust, though hosts note it persists despite consensus opposition. Bond yields spiked (2-year to 3.8%), mortgage rates to 6.5%, yet equities shrugged off risks, with markets in "purgatory" between fear and momentum. Gold fell sharply (down ~20% intraday-adjusted), explained as an "ATM effect": investors sell winners for liquidity amid uncertainty.
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What you'll learn
- 1 (01:08) **Intro and Birthday Banter** - Hosts discuss birthdays losing relevance in middle age amid family priorities
- 2 (03:43) **Markets Dictate Geopolitics** - Military actions timed around market open/close due to oil, yields, inflation fears
- 3 (07:38) **Suspicious Pre-Announcement Trades** - Massive futures buys/oil sells just before Trump halts Iran attacks spark insider trading concerns
- 4 (09:40) **Dan McMurtry on Bears vs. Society** - Bears highlight risks but ignore billions working to grow economy and assets
- 5 (11:40) **Oil Price Resilience** - Energy at 2% of household spending vs. 6% in 1980s; economy can absorb $4-5/gal gas
- 6 (14:00) **Inflation and Rate Expectations Shift** - $150 oil could peak CPI at 6%; breakevens >5%, now pricing hikes over cuts
- 7 (17:07) **Market Drawdown Psychology** - S&P -6.8% max so far; desire for correction unmet amid war/inflation
+ Full timestamped outline available in the app
Show Notes
On episode 457 of Animal Spirits, Michael Batnick and Ben Carlson discuss: how markets are controlling the war, the cost of higher energy prices, why the stock market isn't falling more, why the Fed shouldn't raise rates, the Forrest Gump market, why gold is down 20%, the not-so-K-shaped economy, AI is making us work more, accidental landlords, how to create a good business and more.
This episode is sponsored by Invesco and Janus Henderson Investors.
- Learn more at https://www.invesco.com
- Learn more at https://www.janushenderson.com/
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Find complete show notes on our blogs:
Ben Carlson’s A Wealth of Common Sense
Michael Batnick’s The Irrelevant Investor
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