The opinions expressed below are my own and do not necessarily represent those of Visdom Investment Group, LLC.
Here we go again
Trump extended the ceasefire yesterday and risk-on responses occurred. Overseas markets didn’t react but the US markets did. The S&P opened about +45 and the index back-and-forthed around +60 for the bulk of the day, picking up a few more points into the close. The Treasury curve climbed a little. The Dollar strengthened some. Crude climbed across the curve, surprisingly. Precious metals popped, as did Bitcoin.
The crude market is not signaling good things despite the truce extension. Shipping through the Strait of Hormuz is non-existent and reports of various ships getting attacked makes it clear to markets that the true economic relief to the US/Iran conflict remains to be determined. The US stock market doesn’t seem to mind the situation too much and the US bond market is pausing, watching, and waiting.
We’re glued to the US/Iran headlines but the tension in the market is less. I guess it will take an outbreak of substantial violence for US equities to worry. The other assets classes have different levels of concern.
Earnings season is rolling along and the first Mag 7 name reports after the close, Tesla. It’s the worst performing Mag 7 stock year-to-date. So if it reports good things and forecasts better ones, the stock is going to leap. And it will drag a lot of the market higher in sympathy.
See you tomorrow.
-Mike
Visdom Market Commentary
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