MARKET COMMENTARY
Its the eighth week of the War in Iran, and markets are looking to make it their fourth straight week of gains, rapidly rallying over 10% to breach new all-time highs. From the pits below the 200-day moving average, we’ve soared to new heights. Dip buyers have grasped control of markets, and there’s been a consistent pattern emerge over the last few weeks. Tepid weekend news leads to a weak Monday open for equities, which is subsequently bought and fuels gains for the week. Traders have teed themselves up for another swipe at this, with the S&P opening slightly lower this morning. Instead of the defensive and value names reclaiming their leadership prior to the war, the Mag 7 and technology stocks have spearheaded this latest leg higher. These market rotations are happening quickly and decisively.
The most impactful theme on the market at the moment remains the War in Iran, and investors have been on the edge of their seats awaiting and digesting the slew of information coming out of the respective delegations. Over the weekend, Iran reiterated that the Strait of Hormuz would be closed after previously saying a reopening was afoot. The current ceasefire is still active, but rhetoric from the President is reverting to hawkishness as progress toward a sustainable deal appears sluggish. Peace talks were set to resume in Pakistan this week, with Vice President Vance in attendance, but Iran stated they have no plans to participate. All that to say, the resolution and duration of this war are still murky at best, and either markets have peered through that and correctly identified each party’s intent for an agreement, or they have become too optimistic and are setting up for some deflation.
Its a light week on the economic data front, but there are plenty of interesting things to watch out for. For starters, Kevin Warsh, the nominee to replace Jerome Powell as head of the Federal Reserve, begins his Senate Banking Committee confirmation hearings this week, where the public will receive much more insight into the perspective brought to the Fed via his confirmation. If anyone’s forgotten, its also earnings season, and we are set to receive results from 93 of the S&P 500 companies, including Tesla after market close on Wednesday. So far so good for this earnings season, with results and guidance giving the mood of calm confidence amid all of the chaos.
Economic Releases This Week
Monday: None
Tuesday: US Retail Sales
Wednesday: None
Thursday: Initial Jobless Claims, S&P US Services PMI, S&P US Manufacturing PMI
Friday: Consumer Sentiment
Stories to Start the Week
US seizes Iranian cargo ship as tensions rise
Robot shatters the human half-marathon world recordd, outpacing last years robot by two hours
American Airlines is reportedly not interested in the potential merger floated by United’s CEO
Meta plans to layoff 10% of its global workforce in an initial round of 8,000 job cuts next month
Disclousure:
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