MARKET WRAP

It was a day filled with headline-driven swings, as markets reacted to U.S. / Iran news. Early fears from the weekend’s strikes on Iranian nuclear facilities faded quickly at the open, but fresh anxiety resurfaced midday on Iranian retaliation vs. a U.S. air base in Qatar — only to ease once again shortly after. Markets ultimately appeared to interpret Iran’s response as largely symbolic — a face-saving move intended more for domestic audiences. With that, equities rallied. Oil, notably, was quicker to reflect the “off-ramp” view, falling almost immediately after the midday headlines. On the day: SPX +1%, QQQ +1.1%, and IWM +1%.

As noted, Oil was sharply lower, now back below $70. the 10YY was lower, now 4.34%. DXY had early gains, but reversed to finish lower, now $98.40. The VIX was slightly lower but refused to go below 20 on the rally, closing 20.05.

After hours: SPX spiked into the close and after hours both SPY and QQQ are giving up a bit of that, both a tick lower.

• MRKT Call: Guy and Dan discuss equities, yields, oil, the dollar and VIX following this weekend’s news. Carter Worth joins to talk an unched market on the year and whether geopolitical news matters. Also, this week’s earnings.

• RiskReversal Pod: Stephanie Guild⁠, CIO at Robinhood. joins to talk Fed meeting outcomes, interest rates, tariffs, geopolitical tensions, market reactions, S&P earnings projections, monetary policy, investor sentiment, and more.

MRKT MATRIX: TODAY’S TOP STORIES

• Dow jumps 300 points as oil drops following a restrained retaliation by Iran to U.S. attacks (CNBC)

• China Rips Trump’s Iran Attack in First Comment Since US Hit (Bloomberg)

• Firms Wary of Market Chaos Are Selling Debt Before Iran Reacts (Bloomberg)

• Global Airlines Halt Gulf Flights as War Disruptions Reach Dubai (Bloomberg)

• Zuckerberg Leads AI Recruitment Blitz Armed With $100 Million Pay Package (WSJ)

• Stablecoin World Opens Up to Smaller Banks (WSJ)

• Choosing ‘Buy Now, Pay Later’ at Checkout Will Now Factor Into Your Credit Score (WSJ)

• Analyst Dan Ives rode in a Tesla robotaxi and said it exceeded his expectations (CNBC)

• The rise of ‘pre-plan’ venture capital (Financial Times)

WHAT’S NEXT?

Markets were whipsawed today in a fairly dramatic session marked by Middle East headlines. We saw several sharp intraday swings, before finishing green. The day began with a “sell the news” type reaction with buyers stepping in to take us positive on the day following US strikes over the weekend. But that tone soured mid day after reports that Iran had launched missiles at a U.S. military base in Qatar. Equities sank quickly on the news, but somewhat curiously so did oil.

As we highlighted in this week’s preview, oil was likely to be the best barometer for gauging market sentiment in the wake of any escalation — and that’s exactly how the day played out. Oil markets were first to reach a consensus view that Iran’s response, while forceful in appearance, was deliberately telegraphed to avoid U.S. casualties and leave room for de-escalation — an effort to save face domestically without triggering further escalation. With oil not panicked on the headlines, equities eventually reversed course and pushed higher. While uncertainty remains around how the U.S. now responds, markets (Oil, VIX, etc.) now appear to be pricing a lower likelihood of escalation from here — at least for now. The lesson for the next few days (if not weeks) for equity investors, keep an eye on oil when Middle East headlines hit.

The other news to keep up with this week is Central Banker speak. Tomorrow has more Fed Governor appearances (not to mention Powell on Capitol Hill), but also EU and UK speeches. Amidst today’s headlines from the Middle East we once again got Fed governors implying that a July rate cut is not off the table. Keep an eye (or ear) on that Fed Speak all week.

Tuesday Jun 24th

• Pre-market: CCL 6%

• All Day - Global Central Banker speeches

• 10am - Fed Chair Powell on Capitol Hill

• After-hours: FDX 7%, BB 11%

TODAY’S EPISODES

Watch MRKT Call’s newest episode: Markets Digest US Strikes On Iran

• Analysis - SPX, VIX, US10YY, Crude, FDX, MU, NKE, LULU, MSCI, AAPL, DASH, TSLA, UBER, HIMS, NVO

• Call of the Day: Raymond James upgrades DASH

• Your Questions:

  • Which index is most vulnerable to the downside?

Learn more about our sponsor, MoneyLion.

Watch RiskReversal Podcast’s newest episode: More To Markets Than The Mag7 with Robinhood CIO Stephanie Guild

Dan hosts ⁠Stephanie Guild⁠, CIO at Robinhood. They discuss the Fed meeting outcomes, expectations on interest rates, and economic impacts of tariffs and geopolitical tensions. They delve into market reactions, S&P earnings projections, monetary policy, and investor sentiment. Stephanie provides insights on tech disruptions, AI's influence on the economy, stock market valuations, and opportunities beyond the mega-cap tech stocks. They also explore the strategic operations within Robinhood, such as their new asset management service and how they're leveraging AI to enhance customer experience. The conversation highlights the adaptability required in today's market environment and Robinhood’s approach to staying competitive.

Learn more about our sponsor CME Group and SoFi.

A MESSAGE FROM OUR PARTNER

Subscribe to the RiskReversal YouTube Channel and drop a comment/like to show your support

Want to check out past podcast episodes? Go to wherever you get your podcasts and type in “RiskReversal Media”

We want to hear your feedback! Reply to this email with any comments or questions