Investors eying income solutions and defense stocks as geopolitical tensions rise

(This is a wrap-up of the key money moving discussions on CNBC’s “Worldwide Exchange” exclusive for Pro subscribers. Worldwide Exchange airs at 5 a.m. ET each day.) Investors are trying to digest the market risk in the escalating conflict between Israel and Iran. One policy expert says the Middle East, along with Ukraine and the tensions in the South China Sea, are forming the biggest overall geopolitical risk for investors in the past 50 years. Worldwide Exchange Word of the Day: Income Simeon Hyman of Proshares Advisors said with rising geopolitical tension, a U.S. port strike and a potential market moving jobs report coming up on Friday, investors should turn to bonds for guaranteed income. “The fixed income market has enough yield to bail you out if the geopolitical tensions get worse,” said Hyman said on Worldwide Exchange. Geopolitical risk Terry Haines of Pangaea Policy said investors are seeing the riskiest geopolitical environment in the past 50 years and it could be dangerous to ignore it. Haines says the escalating conflict between Israel and Iran, the Ukraine War and tensions in the South China Sea have not been fully priced into the market. “The worst possibly happening has markedly increased in just the past few weeks,” Haines said. “Investors are not focusing on the likely U.S. response post election to replenishing defense stocks and ramping up capabilities.” Defense stocks Lockheed Martin (LMT) , Raytheon (RTX) and L3Harris (LHX) are all higher on the week on Middle East tensions between Israel and Iran. Worldwide Exchange Pick: Biotech Stocks Scott Ladner of Horizon Investments is seeing opportunities in the biotech sector, specifically the iShares Biotechnology ETF (IBB) and SPDR S & P Biotech (XBI) ETFs. For now, he sees the sector as another way to bet on artificial intelligence innovation, but is watching the economy closely. Both ETFs have traded lower since the Fed’s half-point cut, and Ladner believes another aggressive cut would actually be a negative for the rate sensitive sector. “The reason I like biotech and healthcare has more to do with AI,” said Ladner on Worldwide Exchange, “It matters why we get to 50 (basis point cut) if we get there because the economy is too slow and too weak, that is probably a problem.” Chart of the Day: Shipping Stocks Shipping stocks have actually outperformed amid the disruption at U.S. East and Gulf Coast ports as the Longshoremen’s strike enters its second day. Investors appear to be betting these companies will benefit from the disruption of normal supply routes and be able to charge higher rates as retailers look to move merchandise in other ways.