NATO says Greece, Turkey set for 'technical talks' on Med tension
NATO says alliance members Turkey and Greece have agreed to hold "technical talks" on ways to de-escalate military tensions in the eastern Mediterranean Sea over disputed gas exploration activities.I will not hold myself out as an experienced geopolitical analyst, but Russia and Greece are both Orthodox Christian. A cynical Russia would love to see Turkey and Greece fighting a limited war because it fractures the NATO alliance, but in an escalating conflict, I'm not as sure of Russia sitting out. Eastern Europe is opposed to Turkey joining the European Union and President Trump likely leans towards Greece. When I look at the charts and see doom for Turkish assets and I look at the pickle they are maneuvering into...but enough about Turkey.Tensions are running high over Turkey's drilling activities, which Greece and Cyprus say violate their sovereignty, and both sides have deployed warships in a show of force, raising fears of conflict erupting by accident.
Predicting presidential elections is tough business, but do markets provide information? Back in 2016, many natural resource stocks, including coal, rallied strongly. It seemed like they rose on central bank stimulus and a rebound in China's economy, but could it also have been an early warning of geopolitical events about to unfold? Hillary Clinton was famously anti-coal, yet the coal ETF rallied nonstop that year. The rally didn't peter out until 2018.
Gun stocks were pehaps even more predictive. Gun stocks tend to rise when Democrats win because there's a threat of gun control. Some gun stores put up a picture of President Obama in their stores with some form of "#1 Salesman." Back in 2016, Smith & Wesson (SWBI) peaked in early September and Sturm Ruger (RGR) earlier in March, contrary to how they should move if Hillary won. Today, gun sales are exploding because of rising urban violence, but both stocks are sporting small topping patterns that could lead to a larger pullback. As a speculator, I would be bullish on gun stocks heading into a Biden victory because the Democrats would likely take the House and Senate in that scenario. Aside from buying gun stocks,buying a bunch of AR-15s would also be a good speculation because their resale value would soar in November.The cleanest asset for a Democrat win might be marijuana. Historic House vote to legalize marijuana expected this month. I have some pot stocks because I think various states will legalize marijuana for tax revenue, but the largest pot ETF, ETFMG ALternative Harvest (MJ) isn't indicating Democrat sweep yet.
There are other assets that are pointing to a Democrat win, such as alternative energy, but it's hard to disentangle the impact of the Federal Reserve's monetary policy. Solar is also rallying along with the broader technology sector and pulling back along with it. Let's see how these assets behave in the days and weeks ahead. Full disclosure, I have been placing some bets on a Trump win. My two largest bets are that Trump will win Minnesota and that the Republicans will gain in the Senate. These aren't the most probable bets, but the ones that offered me the best risk/reward ratio given my expecations about various electoral outcomes.
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