“The supreme art of war is to subdue the enemy without fighting.”
— Sun Tzu, The Art of War
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Bombs go down = stocks go up. Bombs stop going down = stocks go up.
Conclusion: stocks want to go up [FULL STOP]
However the second half of this year starting next week will look like, 2025 will definitely go down as the year where investors (and newsroom anchors) could not catch their breath …
Only after hours after Iran bombed US military sites in the region, which followed US bombing of suspected Iranian nuclear sites only another few hours later, President Trump announced a ceasefire overnight.
Over this entire episode, stocks went more up than down. Here’s the S&P 500 mini-futures since Sunday evening:
Yesterday’s breadth in the “cash” equity trading session was pretty impressive, with nearly four stocks up for every stock down and only one sector (energy - surprise! surprise!) down out of eleven:
Let’s stay on the energy theme then for a moment, where we observe that crude oil prices collapsed post Iran’s counterattack, which carefully avoided oil producing assets. WTI futures for example are down 14% since Sunday evening:
This is then what the daily candle chart looks like from the same:
Wild!
In other news, the US Dollar has been weakening since Friday night versus its G-10 peers, as it is losing its safe haven edge:
As I have written in past editions of the QuiCQ (and the Quotedian), the structure weakness of the Greenback is really remarkable here. Versus the Euro, the next stop seems to be 1.20ish in due course:
Gold has then failed in the past few hours to rise on the back of a weaker US Dollar, which is probably a function of some profit taking as the immediate dangers from a wider Middle East conflict seem to recede:
Finally, (US) bond yields softened a tad yesterday, after some dovish comments regarding a possible July rate cut by one FOMC member:
Time's up, more tomorrow - May the trend be with you!
In a gamified world (no critique, just observation) everything can be bet on. Even what the odds are for Iran to close the Strait of Hormuz. And those have just collapsed post the developments over the past 48 hours:
