Oil and Defense Stocks Move; Newmont Jumps; US Steel Concerns

On this episode of Stock Movers:

- Raytheon (RTX) is higher this morning along with other defense stocks on the S&P as geopolitical tensions rise over Israel's strikes on Iran. It launched airstrikes against Iran’s nuclear program and ballistic-missile sites renewed a standoff between two adversaries that risks spiraling into a wider conflict. While the reaction was strongest in crude oil, other pockets of the market suggested that investors are watching how long the tensions will last and whether the situation escalates.

- Chevron (CVX) shares are higher this morning as Israel strikes Iran. Oil prices surged double digits after Israel carried out strikes against Iran, raising fears of a wider war in the region. The Strait of Hormuz, a critical oil chokepoint, is a key concern, with the potential for Tehran to retaliate and block the strait, and OPEC+ spare capacity potentially being challenged in such a scenario.

- Newmont Corp. (NEM) shares are higher this morning as gold's risk premium is lifted by Israel's attack on Iran. According to Bloomberg Intelligence, Israel's attack on Iran could trigger a further jump in gold's risk premium above fair value of $100-$150 an ounce, pushing the metal beyond $3,600. Gold is expensive vs. almost every other financial yardstick and appears overvalued by $200-$700 an ounce vs. our three regression models, yet it's likely to remain a lead indicator.

- US Steel (X) shares are lower in premarket trading after Nikkei reported that Nippon Steel’s planned takeover of the US company may not proceed if the Japanese company has insufficient freedom of management. Nippon Steel continues to seek condition that US steel becomes wholly owned, Nikkei reported citing an unidentified executive

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