Running for the hills

Not yet. S&P 500 far from maintained Thursday‘s late session rebound fire, and clearly rolled over in fear of NFPs incoming. Sure, different methodology to calculate, and nursing strike on top, the figure (and unemployment rate with participation rate) were most disappointing. Every cloud has a silver lining, and rate cutting bets made stocks rebound, and even the battered financials took part. The flight out of semis also slowed down notably, and that helped to give an impression of solid day making at least Nasdaq to return to pre-NFPs level.

Tech to S&P 500 ratio looked okay for a counter-trend move higher to extend maybe all the way till the insitutional positioning, but final two hours saw almost non-stop selling when S&P 500 breadth was waning already before that – and it didn‘t take USD to rise at all really on the day.

To be clear, markets are still treating Iran as a Mideast problem that will be solved in a few short months at worst – it‘s best seen in oil futures backwardation with late summer contracts priced very tame. It‘s only the front months that have been truly rising (and not even gold took truly off when faced with rate cutting prospects Friday).

Markets are still convinced this will be a short-lived war, while there isn‘t really a sign pointing to that – apart from midterms focus to come increasingly to the fore over the weeks ahead, and upcoming inflation that used to enjoy the benefit of declining oil and gasoline prices… yes, those are the ingredients behind the scenes for putting an end to the war of attrition that‘s actually increasing in intensity still.

So much for what the dollar, oil, gold and stocks have already reflected, and have to take into account still. How close to the equivalent of 90-day tariff pause of 2025 are we?