QUICKTAKE

January 7, 2025

Why Markets Celebrated the Fall of Maduro

Geopolitical instability. Macro uncertainty. The collapse of the international order. Risk-off.

As news broke over the weekend of a U.S. military operation in Venezuela, these were the words splashed across financial media.

President Trump’s decision to capture Nicolas Maduro through a high-stakes military operation was widely expected to rattle markets and send investors scrambling for cover.

That was the script. But a funny thing happened on the way to Monday’s open: stocks were heading higher.

Even with futures pointing decisively up before the opening bell, Bloomberg—perhaps the most widely read financial news source among institutional investors—described markets as “jittery.”

Then the market opened. And stocks kept going up.

The S&P 500 finished solidly in the green not just on Monday, but again on Tuesday, leaving many observers confused. One major news service suggested that investors have simply grown accustomed to “shrugging off” macro and geopolitical risks altogether.

That explanation misses the point.

What much of the financial commentary failed to recognize—as it often does—is that American assertiveness on the global stage is not a negative for markets. It is often a positive.

Markets do not fear change per se. They fear indecision, incompetence, and unmanaged risk. The investment world does not want chaos, but it also does not necessarily want the status quo either. It wants clarity, leadership, and progress.

Most of all, the investment world wants a strong America.

Many journalists and even Wall Street strategists seem to view Trump and his America First foreign policy as a dangerous wild card. But their biases and opinions ultimately do not matter.

What matters is what real people, with real money, choose to do. And on balance, they bought rather than sold.

Click HERE to start your subscription to the 76report for as low as $1 per month with promo code DOLLAR.

Why Venezuela is important

For years, Venezuela represented a lingering source of geopolitical and economic ambiguity: a sanctioned petro-state sitting atop the world’s largest proven oil reserves.

This resource-rich country of 30 million people, just a few hours by plane from Florida, has for more than a quarter century been ruled by a regime that was not only hostile to the United States, but also deeply embedded with America’s most significant adversaries.

There is not a single overriding reason that fixing Venezuela is strategically important for the United States. Rather, it is a combination of factors that are collectively quite meaningful, from energy markets and migration to homeland security, geopolitics, and stability across the Americas.

Venezuela has been a festering problem for the United States for decades. With Maduro removed, his successor, Delcy Rodriguez, now faces intense economic and military pressure to govern in a manner acceptable to the American government.

That pressure will center on clear priorities: restoring American property expropriated by the Chavez and Maduro regimes, revitalizing Venezuela’s oil sector through reintegration with global energy markets, and laying the groundwork for sustainable economic recovery for the Venezuelan people.

Remarkably, if these outcomes hold, the Venezuela problem may have been largely resolved—without the loss of a single American life.

The world’s largest oil reserves

Venezuela holds roughly 300 billion barrels of proven crude oil reserves, the largest in the world, representing about 17% of the global total. They are mostly found in the Orinoco Belt, with its heavy and extra-heavy crude deposits….

To continue reading Why Markets Celebrated the Fall of Maduro—including our analysis of the investment implications for energy stocks, gold and Bitcoin—subscribe now to the 76report.

Use promo code DOLLAR and begin for as low as $1 per month.

Click HERE!  

Click HERE to learn more about our Model Portfolio subscription plans.

Disclaimer