It was another day where US president Trump said that a deal with Iran was “very close” and that was enough to turn the market mood around for the most part. It’s not the first time that we have seen this sort of theatric from Trump and you can bet that it won’t be the last.
And just like the story of the boy who cried wolf, markets are falling it for hook, line, and sinker every time. However, will there come a day just like in the fabled tale that the boy gets ignored and the wolf really does come?
Trump said yesterday that a deal was “very close” and that “I think things will happen over there” with regards to the Israel-Lebanon situation. This sort of optimism continues to rebuff market expectations and hopes for a deal. But even after two weeks, we’re still yet to see anything to show for it.
I’m not doubting that the US and Iran are mere steps away from agreeing to a deal. However, nothing can be agreed until everything is agreed. A reminder:
All four of these pre-conditions need to be agreed to in order for the framework agreement to be settled. And only then can we actually start to get into nuclear discussions.
But even now, Trump already wants Iran to offer up some baseline promises on nuclear/uranium and that is going to be an additional sticking point to the above.
US stocks staged an epic comeback yesterday despite some heavy losses from semiconductors. Broadcom fell by over 12%, AMD down by nearly 8%, and AMD dropped by over 3%. While ugly, the losses could’ve been much worse considering they were all bleeding heavier at the open yesterday.
And come end of day, the S&P 500 closed up 0.4% with the Nasdaq only marginally falling by 0.1%. That’s a win in my books.
Fast forward to today though, the mood music is not too bright once again. S&P 500 futures are down 0.5% with Nasdaq futures down 1.0%. It’s going to be another tricky day especially with some key developments to watch out for.
For one, it looks like Iran – not confirmed yet – is once again strategically striking key energy facilities in the Gulf region. Barring any major surprises, the impact of the jobs data will be less influential this time around
