Middle East Tensions and Your Money

After kicking off the New Year with new all-time highs, the stock market has chopped around a bit over the escalation in the Middle East. Last Tuesday, the U.S. embassy in Baghdad was stormed by Iran-backed militia, the Kataeb Hezbollah. The Iraqi security forces made no effort to stop the Kataeb Hezbollah protestors as they approached the U.S. embassy in a funeral procession.

Then early Friday morning, Iran’s top general, Qassim Suleimani, was killed in a U.S. airstrike in Baghdad. The assassination now has the world on edge, especially since Iran has vowed to “turn day into night” in a retaliatory strike.

However, President Trump stood his ground. On Saturday, he tweeted that the U.S. has “targeted 52 Iranian sites” and that Iran “will be hit very fast and very hard.”

While the stock market sold off on Friday in response to the U.S. airstrike in Iraq, Wall Street barely blinked Monday and today. Yes, the three major indices did open down, but they rebounded nicely and ended the day well above their lows.

The bottom line is all good bull markets like to climb a “wall of worry,” and this one has been very good at ignoring distractions, like Brexit and the impeachment proceedings. That’s because the United States is in the midst of an improving economic environment, thus it remains an oasis for global capital. We are also in a Presidential election year when the candidates will be running around and “sucking up” to voters, which tends to raise both consumer and investor confidence.

In the meantime, it’s likely tensions between the U.S. and Iran won’t ease any time soon, and now defense and intelligence are concerned about a silent war that could be just as deadly.

Cyberattacks are Becoming More Common

Some small cyberattacks happened last week. Hackers broke into a federal government library website and posted a disturbing meme of President Trump. And then today, this group hacked into the Texas Department of Agriculture’s website with another threatening picture.

While the White House and FBI have yet to confirm if these attacks were made by Iranian hackers, it’s still important to take notice. We’ve already seen hackers wreak havoc in cities in Maryland, Texas, Florida and Georgia – just to name a few. The costs for all of the cities ended up being upwards of $10 million.

Officials are now on red alert, given that Iranian hackers have attacked the U.S. before. Between 2011 and 2013, Iranian hackers hit 46 financial institutions with a denial of service attack, including Bank of America (BAC), Citigroup (C) and JPMorgan Chase (JPM). Hundreds of thousands of customers were locked out of their banking accounts and, in the end, banks were out millions and millions of dollars.

Cyberattacks are no laughing matter, and companies are now taking cybersecurity very seriously. In 2018, annual global cybersecurity spending clocked in at $114 billion.  By 2022, that number is estimated to be more than $133 billion annually.

Fighting Fire With Fire

At the end of the day, the best defense for cyberattacks is a good offense. In this case, that offense is buying the right cybersecurity software. And the companies that make the best of the best will be the cyber go-tos for investors.

One of those go-tos this year is CyberArk Software (CYBR). This company is leading the charge to protect businesses against cyberattacks. The company provides privileged access security, which protects a business’ assets, data and infrastructure in the cloud, development pipeline and in-house. It’s a complete security solution that allows CyberArk Software’s customers to prevent cyberattacks, not just react to them.

As a result, CyberArk Software’s security solutions are in top demand. About half of the Fortune 500 and more than 30% of the Global 2000 turn to CyberArk to protect their business against malicious cyberattacks. The company partners with more than 4,200 businesses around the world, and it has offices in the U.S., U.K., Europe and the Asia-Pacific.

The stock has been on fire since the New Year kicked off – up 9%. And with all the talk about election meddling and security breaches, I expect CYBR to continue to receive a lot of attention this year.

Back in February 2019 I recommended this stock in my Breakthrough Stocks service. Since then, it is up about 43%. So, my Breakthrough Stocks subscribers had a chance to get in early. And you definitely want to buy early with this one. Because CyberArk is a small company, it makes for an excellent takeover target. If it is bought out by another cybersecurity company, CYBR could easily double.

If you’d like to learn more, sign up here for my Breakthrough Stocks service. I strongly encourage you to sign up now, as I’ll be releasing a new recommendation in my upcoming Breakthrough Stocks January Monthly Issue on Friday. I expect this stock to surge in 2020, and I don’t want you to be late to the party. You can find all the details here.



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