Good morning,

Markets had a lot to digest last week. There was an escalation in kinetic activity between the US and Iran sending oil prices sharply higher. However, better than expected inflation data helped to keep Treasury yields in check. US equity markets ended the week in the red as there was a continued unwind of momentum. The S&P 500 ended the week down ~1.5% closing just under its 50d ma. Semi and memory stocks bore the brunt of the weakness with both groups down >10% for the week. Earnings season got underway and as expected the bank earnings were strong helping the sector to be one of the few to end the week higher.

Outside of a dominant performance by Spain in the World Cup finals and Ryan Fox birdying the final hole to win the Open Championship the primary focus this weekend was the continued escalation in Iran and the ramifications of DeepSeek part Deux with Moonshot’s Kimi 3 model release. ICE Brent re-opened last night >$90 but started to pullback right around the time European markets opened after a spokesman from Iran’s Foreign Ministry said negotiations with the US would be pursed based on “national interests”. Prices took another leg lower after reports that mediators proposed a 10-day ceasefire however, shortly after priced bounced back to around unchanged levels after the Houthis announced a “sea navigation ban” on Saudi Arabia which has rerouted much of its oil exports to the Red Sea. S&P futures have been trading modestly higher overnight as there has been some stabilization in the tech stocks that got walloped last week ahead of some key earnings reports over the next few days. S&P futures are currently up ~0.4% recouping about a third of Friday’s selloff but have backed off from the morning high after the most recent headlines.