The opinions expressed below are my own and do not necessarily represent those of Visdom Investment Group, LLC.
Now what?
Crude prices fell again but US stocks did not rally. The S&P opened flat and slowly wandered around during the session, bottoming around -35 points and topping around +45 points. Treasuries sold off as yields climbed significantly across the curve. Precious metals rallied and the Dollar wandered around unch’d until strengthening some late. Markets didn’t do much today even though many thought we’d see a risk-on continuation as a result of the drop in oil.
The situation in the Middle East continues to dominate markets. The bulls need some significant positive headlines to print for momentum to get going. The bears need some significant negative headlines to get risk assets to crack. Today we got neither and markets are wondering what, if anything, they can make of the situation.
US Defense Secretary Pete Hegseth announced that today was the most intense day of strikes on Iran. That announcement left market participants wondering what to do. Will the intensity trigger a quick capitulation from Iran? Will it destroy Iran’s ability to threaten the Straits of Hormuz? Will it bring stability sooner?
Or none of those things?
There’s a very bullish possibility, a very bearish one, and many in-between ones. None of the possibilities are evident yet. We are all waiting to see how things develop, and then act in the markets. There appears to be no strong speculation out there. There’s no consensus for how things will play out.
We’re truly on the fence and we’re searching for signs.
A headline will certainly come. It’s only a matter of time. It will be a headline that moves the indices multiple percentage points. Whether it’s up or down is a coin flip at this moment. Hold on to your hat.
See you tomorrow.
-Mike
Visdom Market Commentary
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