Things you need to know.
- Iran retaliates and FAILS miserably.
- Countries across the middle-east praise Trump for ending the threat.
- 3 new FED heads calling for RATE CUTS next month.
- Trump announces a cease fire overnight – futures surge.
- Oil down, Gold down.
- Try the Sweet Potato Crusted Grouper
News Flash! Iran retaliates against the US – and stocks SURGED! Countries around the world condemn Iran and praise Trump with many hoping for peace.
Now as expected – Iran sent missiles into Qatar to try to take out the US Air base in what some are calling a ‘symbolic’ gesture – to make it appear that they are getting tough…Well that FAILED and the broader economic hysteria that they tried to create FAILED as well. Qatari air defenses intercepted the missiles. The ministry confirmed that its air defense systems successfully thwarted the attack, with no casualties or injuries reported. But let’s be clear – it was Patriot Missile – manufactured by RTX – used by the Qatari military that took the ‘home-made’ Iranian missiles out…And let’s also be clearer again….Sources tell us that the Ayatollah called up the Sheikh giving them advance warning that they were getting ready to launch an assault on the US base so that they were prepared and any damage or casualties were minimized.
Countries across the region all condemning Iran – Saudi Arabia, Oman, Qatar, Kuwait, UAE, Egypt, Bahrain, Lebanon, Jordan, Morocco, Turkey even the PLA condemned them – the PLA – The Palestinian Liberation Authority condemned Iran! You gotta love that! Even top Clinton and Obama operatives as well as some Democrats are praising Trump for his brave, decisive action – with some thinking he should get the Nobel Peace Prize!
On top of that we now have 3 – count them – 3 – FED heads calling for a rate cut – out LOUD – at the July meeting….Chrissy Waller, Austi Goolsbee and Mishy Bowman – interesting to see who is going to distance themselves from JJ now as they all ‘audition’ for his job….I have a clue for you…I think Trump is going to nominate an outsider – just to ‘shake it up’. Target date – May 2026.
Stocks surged on the back of that ‘attack’ while everything else plunged – oil -9%, gold -0.1%, the VIX (fear index) -3.8% and the dollar – 0.35%. The Dow added 375 pts or 0.9%, the S&P up 57 pts or 1%, the Nasdaq +183 pts or 0.95%, the Russell up 23 pts or 1.1%, the Transports added 332 pts or 2.25%, the Equal Weight S&P up 13 pts or 0.2% while the Mag 7 gained 415 pts or 1.6%.
Trump – not wasting a minute – pushed for ‘de-escalation’ in the middle east calling Iran’s response ‘very weak’ after Tehran made sure to telegraph it to the world prior to launching one rocket. Krishna Guha Vice Chairman and head of central bank strategy at Evercore put it this way –
“The symbolic strike allows Iran to claim that it has retaliated against the US military, while sending a clear message that it doesn’t want to get drawn into a war with the US it cannot win, which would threaten its regimes stability”.
Not sure about you, but I think their regime is ‘toast’ and it is now time for the country to change the narrative and change the leadership, but that’s for them to decide, not us. In any event – today’s attack should lower the temperature and the risk premium that has affected crude oil, natural gas and gold.
And that whole ‘We’re gonna shut down the Strait of Hormuz’ narrative – yeah – that’s not happening either – the countries in the region will not let that happen and China will not let that happen! They import 11 million bpd of oil – 50% of that (5.5 million barrels) come from Middle Eastern countries (not Iran, but a range of countries in the region). So, shutting down the Strait? Think again.
As noted – Oil plunged – falling $6.50/barrel or 9% – plunging thru $74, $73, $72, $71, $70, $69, $68 and $67 trading as low as $66.60 (trendline support) before rallying a bit to end the day at $68.51! And guess what that did? It gave back ALL of its gains that it has seen in the last 12 days.
Gold – was not as dramatic at all…. while it thrashed around ($52 range) overnight Sunday into Monday – it did not do anything that dramatic during the day….it had a $40 range, $3371/$3410 before ending the day at $3,395. Now it appears to be holding the trendline – which is now at $3,343 – should we fail to hold that line – It would not surprise me if we traded down to $3290 ish.
Bonds rallied – the TLT and TLH both higher – Up 0.3% and 0.4% respectively. The 2 yr is yielding 3.86%, the 10 yr is yielding 4.34%, and the 30 yr is yielding 4.87%.
Every one of the 11 sectors gained MORE than 1% with Consumer Discretionary kissing 2%. Energy of course was the standout loser – falling 2.5% as oil plunged by 9%.
Existing Home sales surprised everyone – rising by 0.8% vs. the expected loss of 1.3%. The surprise causing the homebuilders to surge, the XHB + 3% as some are calling for the end of housing weakness…. especially if the FED CUTS rates next month – sending mortgage rates lower.
Both PMI’s – Manufacturing and Services remain in expansionary territory and that is a positive.
Today’s Eco data includes Richmond Fed Manufacturing Index of -10, the Conference Board Consumer Confidence Index and the S&P Core Logic Housing price trends.
And overnight – Trump announces a CEASE fire agreement (on Truth Social), although this morning Israel accuses Tehran of already violating the agreement – Tehran naturally denies – but US futures are screaming higher….Dow +300 pts, S&P’s up 51 pts, the Nasdaq +245 pts while the Russell is up 22 pts! Oil is down another 3% at $66.25 and Gold is down 1.8% or $60/oz at $3,335 – oh, and inflation is lower too! It’s a palooza of good information and data. Get set to hear more and more about a July rate cut because that seems to be part of the narrative and that is helping to fuel this risk on mentality.
European markets are also higher on the news… Germany in the lead – up 2.2% followed by Eurostoxx +1.7%, Italy +1.6%, Spain +1.5%, France +1.4% and the UK +0.4%.
The S&P closed at 6025 up 57 pts. We will open in the 6050/6060 range – piercing the June 11th high of 6059 – only to push higher – attempting to kiss 6100…. Trump is on his way to the Hague today to attend the NATO summit where it is likely that he will receive some form of recognition or praise particularly for his push to increase defense spending among NATO allies. The summit is heavily focused on a new defense spending pledge, with many allies moving toward a target of 5% of GDP, a goal Trump has championed. NATO Secretary General Mark Rutte and other leaders have crafted the agenda to align with Trump’s priorities, aiming to give him a “victory lap” for driving higher commitments. U.S. Ambassador to NATO Matthew Whitaker has already credited Trump for pushing the alliance toward this historic commitment. And so the story continues.
It appears that Iran is neutralized for now – so expect the temperature in the room to cool and that will allow investors to focus on data, earnings, the FED, and the outlook for the economy. The world is safer today than it was yesterday.
Call me for a free (no obligation) portfolio analysis. 561-931-0190
Take good care,
Sources: Bloomberg, CNBC, Reuters, Wall Street Journal
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Sweet Potato-Crusted Grouper
You need: 4 grouper fillets (about 6 oz each), skinless, 1 large, sweet potato, peeled, Olive oil (or butter for extra flavor), 2 eggs, 1 tbsp Dijon mustard, lemon zest, s&p,
Grate the sweet potato using a coarse box grater or food processor.
Place it in a bowl and toss with a pinch of s&p, and lemon zest.
In a small bowl, whisk the egg with the Dijon mustard. Brush a thin layer onto the top side of each grouper fillet. Press a generous layer of grated sweet potato onto the egg-brushed side of the fillet. Press firmly so it sticks well.
Pre-heat your oven to 400 degrees.
Now: Heat a non-stick or cast-iron skillet over medium-high heat with a bit of olive oil or clarified butter. Carefully place the fillets crust-side down and sear for about 3–4 minutes until the sweet potato is crisp and golden.
Flip gently and transfer the whole pan to the oven for another 6–8 minutes until the fish is cooked through.
When done – Plate crust-side up. Serve with the Citrus – Herb Aioli.
Here is the recipe:
1/2 cup mayo, 1 clove garlic, finely grated, 1 tbsp lemon juice, 1 tsp Dijon mustard, zest of 1/2 lemon, 1 tbsp chopped parsley or dill, s&p to taste.
Whisk everything in a bowl until it is smooth. Chill for 15 mins to let the flavors meld.
Buon Appetito