The opinions expressed below are my own and do not necessarily represent those of Visdom Investment Group, LLC.
No changes.
Overseas markets fell. Crude climbed. S&P 500 futures bounced around a bit but rallied ahead of the open. Yields moved around over the day but the Treasury curve finished steepening again. The S&P opened nicely higher, rallied early, and fell down into negative territory by 11 AM. It spend the rest of the day down modestly. Conflict in Iran continues and escalating attacks are threatened by all sides. The Dollar strengthened again.
The situation is the same as the last few days. The issue is the Straits of Hormuz. The observable is the price of oil. The pressure on risk continues. Time, in this limbo-state-of-affairs, only favors the bears.
There’s not anything else to say. While the situation remains unresolved, this is how markets are moving.
Crude climbs
Stocks fall
Bonds fall and/or the curve steepens
Precious metals are volatile but trendless
The Dollar strengthens
These market behaviors appear unalterable as long as Iran maintains a credible threat over shipping traffic in the Straits. If Iran’s ability to threaten, or willingness to threaten, goes away… all of these market movements will reverse.
The question is whether all these markets are rubber bands that will rebound when the Straits open again.
Or whether the bands will break beforehand?
It’s a dicey circumstance and investors no longer have conviction that a full and rapid rebound is a high probability.
Have a great weekend, see you Monday.
-Mike
Visdom Market Commentary
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