Regarding Iran, Markets Do Not Require Perfection

Ever since the US and Iran signed a purported 60-day peace deal buying time for discussions on Iran’s nuclear program and the Strait of Hormuz, the “ceasefire” hasn’t fully ceased fire. More ships crossed the Strait, but attacks reportedly continued and negotiations hit stumbling blocks. Then, on Tuesday, the US revoked a temporary waiver allowing Iran to sell oil unsanctioned. Strikes on Iran followed overnight, and President Donald Trump declared the ceasefire over on Wednesday. Yet markets’ reaction wasn’t huge. US stocks fell a little (-0.2%), European stocks fell more, and oil’s “spike” saw it rise to benign levels below $80 per barrel—far off early April’s highs.[i] This underscores what we said when the peace deal first materialized: Whether or not it holds, markets have largely moved on. Read Full Article »