Stock futures were higher on Monday even after the U.S.’ attack on Venezuela and capture of leader Nicolas Maduro as crude oil prices showed little reaction and investors bet the action would not lead to bigger geopolitical conflicts that upset markets.
Energy stocks led the early gains on the notion the companies would benefit from rebuilding Venezuela’s oil infrastructure. Gold and bitcoin prices gained.
S&P 500 futures rose 0.3% with gains in stocks like Chevron helping to lift sentiment. Nasdaq-100 futures advanced 0.6% as investors kept buying chip stocks like AMD. Dow Jones Industrial Average futures traded down 16 points.
Chevron surged 7% higher and was seen as the biggest beneficiary because of its presence already in Venezuela, which has the largest proven oil reserves in the world. Exxon Mobil advanced 4.2%. Shares of oilfield services companies that could aid the Venezuela energy rebuild like Halliburton and SLB gained 9% each. The State Street Energy Select Sector ETF (XLE) popped 4.7% in the premarket.
Following the attack and capture by the U.S. military, Maduro and his wife, Cilia Flores, were flown to New York — where they were charged with narco-terrorism conspiracy and other crimes. Drug trafficking, according to the indictment, “has enriched and entrenched Venezuela’s political and military elite.” President Donald Trump said Saturday in a news conference that the U.S. would “run” Venezuela “until such time as we can do a safe, proper and judicious transition.”
“This is a significant geopolitical event though unlikely to be a major near-term market-mover,” wrote Matthew Aks, policy analyst with Evercore ISI in a note. “For now, investors are left to navigate a now-familiar landscape of Trump’s likely purposeful ambiguity around his next steps.”
“Our instinct is that Trump is generally not interested in full-scale boots-on-the-ground regime change like the Iraq and Afghanistan wars he has long criticized. However, Trump’s statements today leave open the possibility this won’t quite be a one-and-done like the Iran nuclear strike last year,” Aks added.
Defense giants General Dynamics and Lockheed Martin advanced around 1% each with Trump’s latest action showing quick military strikes would be a key part of his policy for dealing with geopolitical issues that arise.
Even with the bullish equities reaction, traders also hedged positions by adding exposure to gold. Futures contracts tied to the precious metal surged 2.4%. Bitcoin traded back above $93,000.
Wall Street is coming off a mixed session. The S&P 500 and Dow closed higher on Friday — the first trading day of the year — while the Nasdaq ended just below the flatline.
This week, traders will look out for the release of the December jobs report on Friday. Economists polled by Dow Jones expect the economy added 54,000 jobs last month.
Denmark in ‘crisis-mode’ as Trump eyes Greenland
Denmark is in “full crisis mode” after U.S. President Donald Trump once again set his sights on Greenland, following the strike on Venezuela.
“We need Greenland from the standpoint of national security and Denmark is not going to be able to do it, I can tell you,” Trump said Sunday on Air Force One, echoing similar remarks made separately to The Atlantic magazine.
His comments come a day after the U.S. conducted a major military operation in Venezuela, capturing Venezuelan President Nicolas Maduro and his wife, Cilia Flores, in a surprise intervention that sent shockwaves across the globe. Read more.
— Sam Meredith
Oil stocks jump after U.S. attack on Venezuela
Shares of major U.S. oil companies jumped following the U.S. attack on Venezuela that led to the ouster of leader Nicolas Maduro. Chevron traded 7% higher, while Exxon Mobil advanced 4.2%. Halliburton popped 9%.
— Fred Imbert
Regime change unlikely to entice U.S. oil companies to operate in Venezuela, 22V Research says
The U.S.’ military intervention in Venezuela is unlikely to result in U.S. oil companies rushing to put down roots in the region, according to 22V Research.
“Given this highly uncertain political outlook inside Venezuela, it strains credibility to assume that U.S. oil companies would now commit significant private resources (or in Chevron’s case increase their existing commitment) inside Venezuela to increase local oil production,” analyst Jacob Funk Kirkegaard said Sunday in a note to clients.
However, the analyst noted that “it is possible that U.S. oil companies might commit to do so, out of consideration for other possible economic benefits (or harm) that the Trump Administration might bestow upon the industry elsewhere in return for supporting the president’s Venezuelan gambit.”
Nevertheless, those commitments are unlikely to lead to considerable near or even medium-term oil production increases in Venezuela due to the remaining threats of domestic political instability there.
— Liz Napolitano
Venezuelan President Maduro’s deposition could cause “Liberation Day echo,” 22V Research says
The U.S.’ deposition of Venezuela President Nicolás Maduro could result in a “Liberation Day echo,” according to 22V Research.
“Despite Trump’s clear intention to use Venezuelan for discretionary purposes, [sic] the abject lack of post-strike strategic planning frame my expectations of US public policy challenges,” analyst Kim Wallace said Sunday in a note to clients. “Venezuelans might realize a Liberation Day echo like last March-April.”
U.S. President Trump’s so-called “Liberation Day” announcement threatening to hike tariffs on U.S. trading partners roiled global markets last spring.
The analyst added that “the [Trump] Administration will need Congress to cover on-going and possibly escalating military costs, as well as funds to “run” an additional country (should this remain an objective). [It] seems possible but too soon to reliably handicap that the Maduro capture results as the peak of US intrusion into sovereign domestic politics in Venezuela.”
— Liz Napolitano
U.S. indictment against Venezuela President Maduro, wife is unsealed
U.S. Attorney General Pam Bondi has publicized the charges against Venezuelan President Nicolás Maduro, his wife and four other people following the long-time leader’s deposition on Saturday, according to a recently unsealed indictment.
The indictment published online on Saturday shows Maduro and his alleged conspirators face narco-terrorism conspiracy and other charges. Maduro and his wife were captured by American forces in Venezuela this weekend.
“For over 25 years, leaders of Venezuela have abused their positions of public trust and corrupted once-legitimate institutions to import tons of cocaine into the United States,” the indictment alleges.
Read the full story here.
— Dan Mangan, Liz Napolitano
Airlines struggle to accommodate tens of thousands of travelers in Caribbean following U.S. strikes on Venezuela
Airlines are scrambling to accommodate tens of thousands of travelers stranded in the Eastern Caribbean after canceling hundred of flights due to the U.S.’ military operation in Venezuela.
The FAA closed airspace in the region to U.S. commercial flights on Saturday, after the United States’ performed strikes in Venezuela. The restrictions expired overnight, allowing flights to resume on Sunday.
However, some travelers could face disruptions for days as seats on many flights were already scarce due to a travel boom tied to the New Year holiday weekend and school vacations.
But, flight schedules are improving. FlightAware showed about 20 cancellations in San Juan on Sunday, versus 400 the prior day.
Read the full story here.
— Leslie Josephs, Liz Napolitano
Crude slips after Venezuela attack
Crude prices were slightly lower Sunday after the U.S. attack on Venezuela and the ouster of leader Nicolas Maduro.
U.S. crude oil fell 31 cents, or 0.54%, to $57.01 per barrel. Global benchmark Brent fell 22 cents, or 0.36%, to $60.53 per barrel.
Read more here.
— Spencer Kimball
Rubio appears to backtrack on Trump remarks about U.S. running Venezuela
President Donald Trump said Saturday in a news conference that the U.S. would “run” Venezuela “until such time as we can do a safe, proper and judicious transition.” Secretary of State Marco Rubio appeared to walk back those remarks on Sunday, however, noting the U.S. would use leverage to meet policy goals. He also did not say the U.S. would govern Venezuela directly.
“What’s going to happen here is we have a quarantine on their oil, that means their economy will not be able to move forward until the conditions that are in the national interest of the United States and the interests of the Venezuelan people are met, and that’s what we intend to do,” Rubio said on ABC’s “This Week with George Stephanopoulos.”
— Fred Imbert
Stock futures open little changed
Trump issues warning to Venezuelan leader Rodriguez
President Donald Trump issued a warning on Sunday to Venezuelan leader Delcy Rodriguez, saying: “If she doesn’t do what’s right, she is going to pay a very big price, probably bigger than Maduro.”
Trump, speaking to The Atlantic, also defended his decision to attack Venezuela. “You know, rebuilding there and regime change, anything you want to call it, is better than what you have right now. Can’t get any worse.”
— Fred Imbert
