The risk mood is worsening following Trump’s cabinet meeting. The market may have been looking for better signs that a deal was coming or that the Strait of Hormuz would open soon. Instead, it was the usual talking points that Iran is ‘desperate to make a deal’ but no real signs that’s coming and constant Iran denials.
A sign of worry is coming from the UAE, which is talking tough now about Iran and there are rumors they could join the fight. That would present a big risk to Dubai, which is just 60 km across the Persian Gulf and very vulnerable to strikes on infrastructure.
The mood had started out better in the day but worsened as Trump spoke in a move reminiscent of the covid era. Now the S&P 500 is at a session low, down 69 points to 6522.
The move isn’t just in stocks as oil prices are moving higher once again. Treasury yields are at the highs of the day with US 10-year yields up 7 bps and flirting with 4.4%. In FX, the US dollar is at the highs against the loonie and kiwi and within striking distance elsewhere.
In the press conference, Trump said he would announce ‘new deadlines’ when appropriate so there could be something on that but Trump also has a habit of acting after the market’s close for the week so we might not get anything substantial until Friday evening or Saturday morning after his 5-day deadline expires.
In terms of names, META is being hit hard today, down 6.8% after losing a lawsuit on social media addiction while AMD is close behind as the stock market laggard. The selling is beginning to spill over to the oil-sensitive names like airlines, cruise ships and miners.
Energy names are among the winners with Conoco-Phillips up 3.5%
This article was written by Adam Button at investinglive.com.
