On Friday after reports of the Strait of Hormuz reopening and a barrage of social media posts from President Trump suggesting a deal with Iran was in the works sent oil tumbling and the S&P 500 to its third straight day of record highs. Follow-up reports showed that the Strait may not be as open as hoped for, however, that did little to Curb the Enthusiasm heading into the weekend. The week’s 4.5% gain also made it three straight weeks of 3%+ gains, after five straight weeks of declines, something Larry David would describe as, “Pretty, Pretty, Pretty Good”.

With the ceasefire deadline coming into view again, news flow around the situation remains fluid. Over the weekend the IRGC attacked two ships in the Strait and the US then seized an Iranian-flagged ship that tried to breach the blockade. President Trump also said a second round of talks would take place in Pakistan on Tuesday, while also warning of airstrikes on infrastructure if a deal wasn’t accepted. There still hasn’t been an official confirmation of those talks with mixed messaging coming from Iranian officials. The weekend’s events and the up in the air nature of the next round of negotiations along with President Trump saying a ceasefire extension was “highly unlikely” is weighing on sentiment. That being said given the historic nature of the recent rally, which we documented last week, the resilience in equity markets is impressive. As we head to print the S&P 500 is modestly lower driven primarily by weakness in the mega-cap tech stocks while the equal-weight version of the index and small/mid-cap indices are modestly higher.