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Good morning, guys. Let’s take a quick look at the most important things on the market right now and those worth monitoring today.
As I told you yesterday, with both the US and UK on bank holidays, there was little important economic data or strong statistics, so the market was relatively calm and there were no big moves.
But the most striking thing that happened yesterday was the renewed tension in the Middle East, even though the ceasefire remains in place and we have yet to see an actual resumption of large-scale military operations.
There were initial reports of an explosion in southern Iran, and soon after, U.S. Central Command announced that the attack had targeted ships preparing to lay mines in the Strait of Hormuz. From an American perspective, this meant that these were defensive actions, not violations of the armistice.
The most important thing now is that Iran did not escalate the situation in the media. We have yet to see strong statements about a break-up of the truce or an outright resurgence of war, suggesting negotiations are continuing behind the scenes.
But frankly, the longer negotiations go on, the more complicated things get. There was great optimism over the weekend, but now we’re starting to hear harsher statements. Trump again talked about the need to completely dismantle Iran’s nuclear program or move nuclear materials to another country. This suggests that negotiations have become more difficult than before.
Still, the market’s reaction to the situation has been relatively positive. Oil prices are up slightly, but Brent crude prices are still close to $95, well below the levels we saw last week. This means that the market still expects a deal to be reached and calmer in the coming period.
Another important news is that JPMorgan Chase has raised its expectations for the S&P 500 Index, which is expected to reach 9,000 points by 2027, which means the continuation of the strong rise in U.S. stocks.
But personally, I’m always cautious about investment bank forecasts. Because banks naturally benefit when people continue to inject money into the market, it is normal for their expectations to be optimistic.
I think the true picture of the market will become clearer when we get answers to the following fundamental questions:
Will interest rates rise again?
Will The Iran Files End Soon?
Will we witness a new wave of inflation?
These factors will determine the true direction of the market in the next stage.
Today is also the ECB’s financial stability report, but frankly I don’t think it contains anything that will have a significant impact on markets.
So for now we are working calmly and normally, following the news. If there are any important developments or influential news, I will share it with you directly.
I’ll see you all at today’s meeting.