War In The Middle East To Sink Stocks? | Lance Roberts

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**Lance Roberts** (0:59)
Very likely, we may see over the next week or so, this market try to work its way back down towards $5,900-ish, maybe $5,850, which would give you a really good entry point to add your equity exposure, because that should work off a good chunk of this short-term overbought condition.

**Adam Taggart** (1:22)
Welcome to Thoughtful Money. I'm Thoughtful Money Founder and Host, Adam Taggart, welcoming you back here at the end of another week for another weekly Market Recap featuring my good friend, the peacemaking pacifist portfolio manager, Lance Roberts. Lance, how are you doing?

**Lance Roberts** (1:36)
I don't know why you would call me a pacifist after our conversation last week. You know I like to fight, so.

**Adam Taggart** (1:41)
So I feel a little bad because we had this war theme running all the way through last week's discussion. And then obviously, the big news this morning, Lance, is that Israel issued a pretty major pre-emptive strike last night against Iran. So I wanted to focus more on peacemaking from here, and hopefully, world events will follow this week.

**Lance Roberts** (2:02)
You know what? I'm completely good with that.

**Adam Taggart** (2:05)
All right. And also folks, we're recording this a bit earlier than normal on Friday morning, because I'm doing a special report live stream with Ryan Boll, who is RAINN, which is one of the largest sort of geopolitical strategy corporations in the world. He's their Middle East specialist. So if you're watching this on Saturday, when this video airs, that live stream should have already happened. You can watch the recording of that if you want to get into the real details of what's going on over there, what is most likely to happen next, and hopefully, what we can all hope for, for as swift a resolution as possible to what's going on there. All right, so, and we'll probably be a little bit shorter today as a result for that, folks, so just FYI. All right, so in our previous conversations, Lance, when Israel and Iran have gone at it, my recollection is that you've said, you know, it's generally not something that the markets get that worried about. We are seeing stocks lower here today, right, as the market starts opening.
But is this severe enough to, you know, do you think generates some sort of material market impact that we should be aware of? Or do you think until, you know, some line of escalation is crossed, it's really not going to be that much of an issue markets wise?

**Lance Roberts** (3:24)
Well, and again, you know, it's always the, you know, when something initially happens. So let's step back one second here. The thing that always gets the markets is the one thing they don't expect, right? We've talked about this before, you know, the market has been doing fantastic over the last, really since April the 9th. We've had this 20% rally in the markets. We're, you know, we're back. We're up like 3% for the year for the S&P 500 And, you know, all those previous concerns over debts, deficits, whatever, those are pretty much inflation. That's all kind of faded into the background. And everybody's focusing now on earnings. Markets got very extended, very overbought. Last week, we said, hey, look, we're going to have some type of correction in the markets. What triggers it? Who knows? It's always some unexpected event like this. Now, this morning, you know, markets opened down, but they're already recovering. Futures were down a lot right after the event occurred. And then before the market even opened, the S&P was down like 80 basis points. As we're talking, the market's just opened. It's 844 Texas time right now. So the market's just opened 15 minutes ago.
And the index is down about 68 basis points. So very quickly, this market's already kind of looking through the event going, this is probably going to be pretty self-contained. It's probably not going to escalate to a great deal. Now, the markets could be wrong, mind you. And we'll see what happens because we haven't got a response back from Iran yet. And they just took out one of their leading, one of their highest ranking leaders. They've obviously destroyed their nuclear facility. So there's going to probably be a tit-for-tat event coming out of this as we've seen before. Before, when they've responded, that was the end of it. It was just, okay, we hit you back, we're done, we're even, we're good. Whether that's the case this time, who knows? But again, really early on, the markets are looking through this. But longer term, and I think this is the juxt of your question, is that, and here, let me just share a chart. This is a long-term chart of the S&P going back through history. And look, there are certainly events in time that have caused more severe corrections in the market, like the Arab oil embargo led to the 1973-74 bear market. We had inflation, other stuff going on, back-to-back recessions that all impeded on a bubble that existed at that time of the Nifty 50