War Bonds vs. War Stocks: How Treasuries Are Really Responding to the Iran Conflict

**SPEAKER_1** (0:01)
This is Invest Talk, from KPP Financial, helping investors make sense of the markets one day at a time. Here's your host, Luke Guerrero.

**Luke Guerrero** (0:16)
Good afternoon, fellow investors, and happy Friday. My name is Luke Guerrero, and this is the Friday, July 17th, 2026 edition of Invest Talk.
As always, we got plenty of things to talk about today. Decidedly negative week for markets, rising tensions in the Middle East. But we'll get to that in a little bit. We will also get to what happened today in the market. We will run down our main focus point and all those show topics that we have for you as well. But why don't we kick off this show by answering one of your finance and investment questions now?

**SPEAKER_3** (0:52)
Hi, I've got a question.

**SPEAKER_4** (0:53)
I was curious about the security symbols, Z and zebra, I India and M Mary.

**SPEAKER_3** (1:01)
Just like to know what your thoughts are. I was hoping to buy some. Thank you.

**Luke Guerrero** (1:07)
ZIM Integrated Shipping Services is a container shipping company out of Israel. They have just over 100 container ships that operate Trans Pacific, Trans Atlantic and also through the Suez Canal. It is also a national security asset for Israel.
There's a little bit of a acquisition battle going on right now.
All the price movement you're seeing is a little bit distorted relative to what is going on with the company. Before we dive into that, we'll talk about earnings because earnings weren't great. They missed in their most recent reporting on May 20th, they missed by about 13% on revenue.
They had a net loss of 86 million versus a net income of roughly 300 million. A year ago EBITDA was down 60%, earnings per share was negative 71 cents versus 245 positive. A year ago carrier volume is down.
I mean, they had pandemic era highs and they've pretty much sharply fallen from there. One of the reasons why will costs are going up? What do shipping containers run on?
What do ships run on? They run on fuel. Fuel is a bit more expensive. But again, there's a merger opportunity going on here. This is not a fundamental shipping story at this point. They have two companies. There's Hapag-Lloyd, who offered $35 a share. That was approved by 97% of shareholders. But then Sakal Group bid $37.50 as the Israeli government actually was opposing the Hapag-Lloyd deal. And so that's one of the reasons why the stock is actually currently trading roughly 25% to 30% discount to the value of the merger. Unless you are somebody who's trying to bet on this merger specifically, this is pure merger arbitrage. If you're buying it below 35% and it goes through, you're going to make some money. If it doesn't go through, this thing is going to drop a little bit further. So if you're trying to get shipping exposure, not really the thing to invest in right now. This is once again just a plain merger arbitrage name. Thanks for the call. We had a great show for you yesterday where we talked about the AI rally and how it is seemingly up until recently ignored geopolitical threats. We talked about how it is very analogous to dangerous psychological situations where markets in the past have shrugged things off until they become incredibly apparent. So again, I think it's a very poignant story. We also answered a question on Berkshire Hathaway. So if you happened to miss yesterday's episode, I encourage you to go check it out. And remember, the best way to never miss an episode of Invest Talk is to subscribe wherever you get your podcasts. Onto today where my main focus point is about war bonds versus war stocks and how Treasuries are really responding to the Iran conflict because contrary to the traditional flight safety playbook, bond guilds are rising along soil prices as this war driven inflation and the fears about it are overwhelming demand for US Treasuries as a haven asset. So we'll talk about why this unusual bond market behavior matters for every investor who holds fixed income and what it signals by the durability of the post pandemic rate environment. We also have a couple more stories as well, including how incredibly high deficits are threatening the bond market because of how much borrowing the US government needs. A story about the SEC who is expected to change quarterly earnings rules despite massive public backlash and should we have time at the end of the show, a bit of a dive into gas prices and why it's likely they will continue to rise if at most and at minimum probably stay where they are, even if oil comes back down. We also have some voicemail calls ready to play, one on investing factors and another on Netflix, that's ticker NFLX, and some questions that came in from the comment section of the Invest Talk YouTube channel. We're headed to do a break. Please remember, you can call any time and leave your questions on the Invest Talk voice bank. If you're listening to VR livestream or on AM 1220 in the Bay Area, I encourage you to call now at 888-99-CHARP. When we come back, we'll talk about today's market activity.