Morning Note

Very interesting action this morning... While one session does not nearly a trend make, those intuitive correlations among asset classes I've been talking about that haven't played out so far, are playing out this morning.

Fed rate odds, inflation. stocks, gold, etc. (video)

An additional point regarding the action in gold that I didn't detail in the video -- from our internal chat this morning:

"...it's so tethered to real interest rates right here though, unrelentingly!  You saw how it rallied yesterday on presumed de-escalation... If we get escalation, and we get higher yields, we could actually get gold selling off hard (higher yields being the key)... When escalation finally has the market thinking global recession, and treasuries get bought (yields fall), then gold turns golden... I.e., nominal yields fall faster than inflation expectations (the opposite of the current setup), then that (real rates falling) is big for gold."

Quick Morning Note

Reports emerged this morning that back-channel conversations are underway between the United States and Iran... More concretely, a commercial tanker successfully transited the Strait of Hormuz this morning after direct talks with Iranian officials -- the first tangible sign that the critical shipping corridor that carries a meaningful share of the world's oil supply may remain open.

Stocks are up broadly, gold is surging, and oil prices are pulling back -- all the logical responses to a world that looks slightly less likely to tip into a full-scale energy supply crisis.

Quick Morning Note

I can't help but sympathize with Peter Boockvar's bottom line this morning:

"Strictly from a market and economic perspective, the war either ends or continues and the Strait of Hormuz either fully reopens safely or does not. There is no in between at this point it seems."

Quick Morning Note

Per yesterday's video commentary, during the weekend we went from preparing to withdraw militarily to a 48 hour ultimatum, with weekend equity market proxies responding as expected -- rallied on the former, plunged on the latter... In the wee hours this morning the US headlines read that the US and Iran had constructive talks over the weekend and that strikes on energy infrastructure would be halted for 5 days while negotiations continued... Iran reported that there were no such direct talks, thus, assuming they indeed occurred, they were no doubt via the channels I referred to yesterday.

What's Working, What's Not, And Why (video)

Dear Clients, please be sure and watch this one when you have a few minutes.

Once playing, click the icon in the lower right corner for full screen. Focus should occur after a few seconds; if not, click the wheel to the left of the YouTube icon to adjust:

Attention Non-Client subscribers: Nothing in this video should be construed as investment advice. The examples expressed relate to portfolio management we perform on behalf of our clients, and, again, under no circumstances are they to be considered recommendations to the viewer.

Morning Note

Well, that (fed meeting) didn't go well for markets!

In yesterday morning's note I suggested that if Powell came across the least bit hawkish the market would hate it... While he actually did the balancing act he virtually had to, markets clearly needed to hear that the Fed was ultimately concerned with the consumer economics of higher energy prices.

Quick Morning Note

I suggested that I'd be popping in regularly this week (while away), but up until this morning, while the news has come fast and furious, the market action -- generally positive -- hasn't inspired me to grab your attention.

This morning's release of February's producer price data turned what, in last night's futures action, looked to be a green open for equities (globally), quickly into a red one... Escalation, by way of threats out of Iran, of the Middle East conflict isn't of course helping, with oil up over 2% as I type.

Morning Note

Global equity markets are seeing yet more downside this morning (I'm typing this at 8:50am pt) on the latest out of the Middle East... Iran's new leader declared publicly that they intend to keep the Strait of Hormuz closed, and that attacks on neighbors and US military bases in the region will continue... I.e., we're looking at escalation at this point.

Oil is up markedly on the news, and, again, global equities are getting slammed.

Quick Evening Note

As promised, clients, I'll be communicating more frequently as things continue to unfold... We know that times like these can bring angst and, as you long-time clients (we managed through Covid, the 2008 crisis, and the early 2000s tech bubble burst with many of you) have experienced over the years, when times are most uncertain is when we feel that you should be all-the-more hearing from us.

Quick Morning Note

Equity markets (US in particular) recovered intraday yesterday from a notable initial selloff on news out of Washington (Trump comments) that the war is very near over… Of course there is much pushback on that notion from the punditry, and today’s headlines either suggest there’s much more to come, or that this is the final salvo/show-of-strength before talks begin.

The market, as I type, is discounting the latter.

A Succinct Assessment Of The Action In Stocks, Commodities, Gold, etc. (video)

Once playing, click the icon in the lower right corner for full screen. Focus should occur after a few seconds; if not, click the wheel to the left of the YouTube icon to adjust:

Attention Non-Client subscribers: Nothing in this video should be construed as investment advice. The examples expressed relate to portfolio management we perform on behalf of our clients, and, again, under no circumstances are they to be considered recommendations to the viewer.

Beneath the Counterintuitive (video)

Dear Clients, this morning's commentary is an important one to take in...

Once playing, click the icon in the lower right corner for full screen. Focus should occur after a few seconds; if not, click the wheel to the left of the YouTube icon to adjust:

Attention Non-Client subscribers: Nothing in this video should be construed as investment advice. The examples expressed relate to portfolio management we perform on behalf of our clients, and, again, under no circumstances are they to be considered recommendations to the viewer.

Morning Note: Perspective

As I type (7:40am pt), we're experiencing one of those infrequent, but, alas, inevitable risk-off days where virtually all correlations move to one... Meaning, asset classes and individual securities that tend to complement each other from a risk standpoint -- i.e., tend to not always move in the same direction, or, better said, not move for the same reasons -- are, so far this morning, moving in the same direction (down), for the same reason(s).