The opinions expressed below are my own and do not necessarily represent those of Visdom Investment Group, LLC.
Not promising.
Despite the 8 PM deadline, there’s been no meaningful progress on the US/Iran situation. Markets, which yesterday assumed things would proceed in some acceptable way, started throwing in the towel today. Premarket futures bounced from down 30 to up 10 and the S&P 500 opened about down 20. Regular hours trading took the index further lower in the morning, rebounding significantly by early afternoon, slipping again mid-afternoon, and finally popping up late, on headlines suggesting deadline extensions. Capital flow was light again today, 71%. The yield curve steepened a bit, essentially undoing yesterday’s move.
We are almost at the moment of truth. Will a last-minute miracle of diplomacy result? If not, how furious will the military actions get?
Markets are now waiting for actual events to unfold. The discounting and handicapping are done. Tonight, in Asia, in tomorrow’s waking hours, in Europe, and come mid-morning, in the US, markets will be repricing. We will reprice based on the results of events. We will also begin discounting and handicapping the new potential paths and outcomes that result from whatever actually happens this evening.
See you tomorrow.
-Mike
Visdom Market Commentary
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