The opinions expressed below are my own and do not necessarily represent those of Visdom Investment Group, LLC.
FYI. I am out of the office from this afternoon until Monday April 6th. No Recaps for a week.
Hanging by a nail
It’s the middle of the trading day and US markets are reacting poorly to the extension of the pause on US attacks of Iranian energy infrastructure. The S&P opened down about 40 points, weakened further around 10 AM and attempted to recover. It remains to be seen whether the index can print some intraday highs by the close. Treasury rates started the day higher but they came in a little. Crude is up on the front and down after October.
Markets are basically out of patience. Headlines out of the White House and Iran are being treated as less and less believable. The lack of shipping traffic in the Strait of Hormuz remains a top concern for markets. For the market to leap higher, some kind of development must occur and ships must move.
Until then, we’re drifting lower. The risk is if the drip drip drip pressures investors, both psychologically and through levered exposures. If the margin clerk starts going to work and sentiment breaks, ugliness will result.
The market may be strong enough to withstand the pressure as we wait for a positive outcome. A messy risk-off situation is not destiny. I simply point out that it’s a plausible risk and it grows with each small down session.
We need not wallow in doom and gloom however. A truly positive breakthrough is really just a successful negotiation away. It’s not too much to ask. I hope all the players are ready and willing to make a deal.
See you in a week and a weekend!
-Mike
Visdom Market Commentary
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