The opinions expressed below are my own and do not necessarily represent those of Visdom Investment Group, LLC.
Positive headline.
Premarket futures were down substantially. Asian markets closed down more than 3%. The usual risk-off trades were in motion. A little after 7 AM, President Trump announced a 5-day halt of attacks on Iran, subject to progress in talks with Iran. Markets reacted strongly. S&P 500 futures climbed more than 200 points. Oil prices collapsed. Treasury yields fell. The S&P opened about +95 and rallied to +150 around 11 AM. The index gave back about half those gains by lunch and rallied gently further through the afternoon. Yields fell across the Treasury curve and the Dollar retreated some.
Details are thin. Markets are wondering just what Trump’s announcement means, especially when it was refuted by Iran sometime later.
There’s no sense in attempting to divine what’s likely or not from the geopolitical headlines right now. We just don’t know what this Trump/Iran headline means.
What we do know is how the market will react if more positive events break, and obviously the converse.
So our question is simple. Is today’s positive headline just a feint that scared all the shorts into covering? Or is it that start of a new phase of positive progress?
One could argue that Trump has observed what last week’s actions, and non-progress, did to markets, and that he doesn’t want to continue down that path.
If true, today represents an actual turning point. Can we handicap how likely this shift is? Do we have 5-days or relief rallies, to actually see if the positive progress is real?
I think so. Things could obviously go badly but the public game of chicken between Trump and Iran just changed for the better. Would either side want to return to the collision course of last week?
See you tomorrow.
-Mike
Visdom Market Commentary
IMPORTANT INFORMATION
This is general educational information and market commentary and is intended for informational purposes only and is not intended as an offer or solicitation for the purchase or sale of any financial instrument or as an official confirmation of any transaction.
All market and economic data herein is as of the date hereof and sourced from Bloomberg unless otherwise stated. The information is subject to change without notice and we have no obligation to update you.
This general market commentary is intended for informational purposes only and is not intended as an offer or solicitation for the purchase or sale of any financial instrument or as an official confirmation of any transaction. The views and opinions expressed constitute the author(s) judgment based on current market conditions, are subject to change without notice, and may differ from those expressed by other employees of Visdom Investment Group LLC ("Visdom") and Visdom. Past performance and any forward-looking statements are not guarantees of future results. It is not possible to invest directly in an index.
We believe the information contained in this material to be reliable and have sought to take reasonable care in its preparation; however, we do not represent or warrant its accuracy, reliability or completeness, or accept any liability for any loss or damage (whether direct or indirect) arising out of the use of all or any part of this material. Any securities referenced are shown for illustrative purposes only, and are not intended as a recommendation or endorsement by Visdom or by the author(s) in this context. The information presented is not intended to be making value judgments on the preferred outcome of any government decision. This information does not constitute Visdom research, nor should it be considered a recommendation of a particular investment strategy or an offer or solicitation for the purchase or sale of any financial instrument. Investing involves market risk, including the possible loss of principal. You should speak to your financial advisor before making any investment decisions. Visdom and its affiliates do not provide legal, tax or account advice so you should seek professional guidance if you have questions.
