The opinions expressed below are my own and do not necessarily represent those of Visdom Investment Group, LLC.
US & Iran
S&P futures were up small in the premarket. Yields weren’t doing much, nor was crude. The index opened up about +20 points and wandered around for a bit when news of a US/Iran deal broke. Apparently a the interior minister of Pakistan is brokering a final agreement. Details were, and remain, sparse. Markets jumped nonetheless. Oil fell, yields fell, stocks rallied, the Dollar fell, precious metals jumped. That initial reaction built momentum over the rest of the session. Later in the day, positive sentiment in equities turned towards Nvidia’s earnings tonight. The rally in the market buoyed hopes that Nvidia would inspire a fresh burst of upside once they report.
We’ve anticipated the positive potential of a true agreement between the US and Iran. We don’t have one yet but we are seeing how the market will react as we approach one. It remains to be seen whether today’s tease of an agreement is truly a peek into the future or another false signal.
We’ve also anticipated the market reaction to astounding results from Nvidia. We have not seen NVDA’s results yet and the market is putting a lot of faith in the announcement ahead of time. We shall see, very shortly, whether the market’s expectations were too lofty or not.
Markets today did a lot of anticipating. It is specifically anticipating good news. The good news is not without merit but it’s already getting into the prices of the moment. When the details of the US/Iran agreement, or non-agreement, come out, we’ll see how the tape reacts. Ditto for Nvidia’s numbers and guidance.
The market is no longer waiting neutrally. It is waiting with a bias. That’s good for the longs ex ante. We’ll see whether it’s good for them ex post.
See you tomorrow.
-Mike
Visdom Market Commentary
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