On Friday most major US indices moved lower with semis and financials leading to the downside as the Citrini induced fears were reignited after Block laid off ~40% of its workforce. Despite the volatility and dispersion beneath the surface losses at the index level were contained with the S&P 500 ending the week down 0.4% while the Dow and small and midcap indices were off a little more than 1%. For the month of February, the S&P 500 ended down ~1% continuing to trade in a multi month 250-point range between 6,750 - 7,000. However, most other major indices ended the month in the green as the rotation that has been underway since the end of last year continued. That rotation took a more defensive turn during the month with staples, yield oriented sectors and commodities the best performing ending the month up between 5-10%.

The events of this weekend in the Middle East are clearly the focal point with a pretty typical conflict playbook being utilized (recapped below). Equities are moving lower around the globe though losses are reasonably contained with most major indices in Asia and Europe down between 1% - 2.5%. There are a couple of exceptions around the globe - the Tel Aviv 35 index is up >3%, the China Shanghai Composite was modestly higher as was Australia given commodity exposure. US futures are down a little more than 1% but off the worst levels hit shortly after the European open after reports that 3 US fighter jets were downed over Kuwait, which were apparently shot down accidentally by friendly fire.

• The VIX is currently around 23 off the overnight high, this catalyst was not completely out of left field so we could see early monetization of hedges.

• ICE Brent traded over $80 as futures re-opened last night but has pulled back modestly trading between $78 - $80 since midnight.

• Natural gas prices are sharply higher, particularly in Europe (+50%), as about a 20% LNG shipments move through the Strait of Hormuz

• Gold is near overnight highs up ~3% trading just over $5,400.

• The USD index is moving higher in a flight to safety bid. The USD index is up nearly 1% breaking above its 200d ma for the first time since mid-January.

• Treasury yields are moving higher as inflation concerns bubble up with the increase in oil prices and as the Strait of Hormuz is essentially shut down.