President Trump met with his team in the Situation Room for eight minutes yesterday. There is scuttlebutt that the focus is on whether the United States should drop a Bunker-Buster bomb on Iran. There are also reports that the administration is considering offering Israel the use of aircraft refueling tankers.

The great hope is that the White House doesn’t find itself in the War Room next.

Energy Climbs

Energy (XLE) was higher again, as West Texas Intermediate (WTI) edged higher. Still, both are not rocketing like we’ve seen in the past when geopolitical instability had folks talking about WWIII.

I’ll be the first to admit we are in the golden age of hype, but if the market thought this regional issue could significantly affect the world, the reaction would be much more severe.

Very few green patches on the heat map.

Advancers

There was an interesting mix among the top ten advancers:

Cybersecurity stood out, with two prominent names among the biggest advancers in the session. Cybersecurity is part of modern warfare, so it stands to reason these names are moving higher.

Sea of Red

Yesterday, there was no place to hide. The pullback allowed investors to take some chips off the table rather than rotate them. Revenue was hit the hardest, which is surprising, considering these names have lower beta than other factors.

Empire State Fed Manufacturing Survey

There was more bad “soft” data, but the miss on the Empire States masked compelling developments. Expectations soared, just like the most recent University of Michigan survey, and employment edged higher while prices edged lower. I wonder if the Fed will notice.

Today’s Session

Housing starts and permits came in below consensus.  There will be headlines and narratives about the slowing economy and tariffs. The fact of the matter is housing affordability has been unattainable for years.

Starts

Permits

Affordability

Young folks are locked out of home ownership, delaying family starts and children, which has exacerbated the fertility crisis. 

Only older wealthier people can afford homes. I hope Powell is paying attention.

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