Yesterday, the market struggled all session but tried to move into the plus column on reports of a possible “phase deal” with Iran to reopen the Strait of Hormuz fully. The terms of the deal seemed far-fetched from the United States' perspective, but stocks are eager for the conflict to end.

Deal Before Midterms?

President Trump understood that from the first day of the campaign to end Iran’s nuclear weapons capability, the Western media was not going to be helpful. Iran understands this as well.

In hindsight, we entered into that so-called Memorandum of Understanding (MoU) too soon and got played. The eagerness to end the conflict with limited harm to U.S. military personnel and temporary harm to the global economy has been noble but misguided.

I think most Americans understand what’s at stake, but election pollsters never ask them about world peace or a world free from the threat of a nuclear Iran with missiles able to carry projectiles across half the planet.

But Iran’s economy is being strangled, and any concessions they might have gotten from America and Middle Eastern neighbors diminish every day.  The market senses that there is urgency for Iran to cut a deal, and not settle for the Western media dunking on the White House.

 Bond Yields’ Relentless March

Crude oil pulled back initially on the Iran headline, but bond yields (TNX) are moving relentlessly higher. This isn't an automatic death knell for stocks, as investors aren’t going to pour into bonds en masse, while the ICE MOVE Index (MOVE) erupts higher.

New Lows Alert

Market breadth was abysmal, with decliners soaring over advancers and down volume greater than up volume (overall volume was very light). Still, the new highs-to-new lows ratio is the story.

These are eye-popping numbers (see in red).

The ratio of new highs to lows is at its lowest point since the peak of the ‘Tariff Tantrum.’

There are opportunities in that woodpile, but not enough confidence for big money to start making real moves.

Hyperscalers Get a Second Look

All the artificial intelligence (AI) doomsday stuff has masked what’s happening in AI, from token adoption and cost declines to the fact that hyperscalers seem perfectly positioned for significant, historic gains right around the corner.

Oracle Corporation (ORCL) is the wild card but still positioned to excel.

Mag Seven’s Quiet Ride Higher

It's not getting much ink or fanfare, which is a good thing, but the “Mag Seven” (MAGS) is back and looks poised to make further gains.

Tweet

 

Home | Products & Services | Education | In The Media | Help | About Us | Disclaimer | Privacy Policy | Terms of Use | All Rights Reserved.