In a move drawing parallels to the 1989 invasion of Panama, the United States has confirmed a large-scale strike on Venezuela resulting in the capture of President Nicolas Maduro.
President Trump confirmed via Truth Social that Maduro and his wife have been flown out of the country following months of delegitimization and drug-trafficking accusations.
🌍 THE TWIN GEOPOLITICAL FLASHPOINTS: Markets are now digesting two simultaneous regime-threatening crises:
- Venezuela: Direct US military intervention and leadership decapitation.
- Iran: escalating internal unrest that poses the “biggest threat to authorities in years,” with the US pledging support to protesters.
📉 ANALYST & INVESTOR REACTION:
1️⃣ The “Risk Rotation” (Annex Wealth Management): Chief Strategist Brian Jacobsen notes that while markets may initially knee-jerk into “risk-off” mode, they often rotate quickly to “risk-on” once the conflict phase begins.
- The Oil Trade: Jacobsen warns this could eventually “unlock massive quantities of oil reserves,” exacerbating the forecasted supply glut in the medium term.
2️⃣ The “Headline Risk” Era (Saltmarsh Economics): Economist Marchel Alexandrovich argues that this is the new normal. Investors must now price in significantly higher headline risk—from tariffs to Ukraine to Taiwan—than in previous administrations.
3️⃣ The “Bonanza” Optimism vs. Reality (Fordham Global Foresight): Strategist Tina Fordham predicts a surge in “animal spirits” on the Monday open, driven by optimism for a post-Maduro Venezuela and potential opening of Iran.
- The Caveat: She warns that post-authoritarian transitions are “bumpy and nonlinear,” and the reality will likely be messier than the initial market euphoria suggests.
💡 ANALYST TAKEAWAY: The immediate trade is Volatility. With two major energy-producing nations (Venezuela & Iran) in flux, the “Geopolitical Risk Premium” is back. However, the medium-term view is deflationary for energy: if Venezuela’s reserves eventually come back online efficiently, the current supply glut fears will intensify.
👇 Energy Traders: Do you buy the geopolitical spike, or sell the long-term supply glut news?