Major indices are moving lower across the board as investors continue to watch the Iran Conflict that has resulted in another sharp increase in oil prices.

All magnificent seven names are moving lower and the heat map is a sea of red. However, we see some pockets of green in Energy (XLE), Utilities (XLU), Materials (XLB), and Consumer Staples (XLP).

Energy (XLE) is once again leading the way as energy commodity prices continue to face upward pressure following last nights strike on oil tankers in the Persian Gulf. Notably, the latest attack was reportedly carried out by autonomous naval drones.

Industrials (XLI) is at the bottom of the list, with transportation names in the sector getting hit the hardest.

The Trump administration is considering a suspension of the Jones Act in order to help ease oil prices. The Jones Act requires cargo moved by sea between 2 US ports to travel on ships built, owned, and operated by Americans. This comes as President Trump considers multiple options to curve the rise in energy commodity prices.

This comes as the latest data shows Strait of Hormuz being closed for 3 months could cause Brent prices to spike to $164/barrel.

Furthermore, the Iranian Deputy Foreign Minister indicated they were still allowing friendly ships to pass through the Strait and that they are currently not mining the strait.

Economic Data

Building permits fell 5.4% M/M in January to a seasonally adjusted annualized rate of 1.376M, below estimates of 1.41M.

On the other hand, housing starts rose 7.2% M/M in January to a seasonally adjusted annualized rate of 1.487M, above forecasts of 1.35M.

January trade deficit returned to the $50 billion range which has been a familiar zone since last year’s tariffs. 

The latest initial claims report came at 213k, missing consensus of 215k. This reflects a low-firing environment.