Not just another Monday morning

I will start with this, without words.

It's never easy writing after a profound tragedy and tie it into markets and the economy because it sounds insensitive and tone deaf but I'll try. We're seeing the exact market reaction that you would expect with commodities giving the largest response because of disruption assumptions, particularly oil with the unknown of how Iran will be dealt with (just as we drained our SPR, originally meant to protect us against supply disruptions, to 40 yr lows). Also, any hopes of the Saudi's pumping more oil on a grand deal with Israel and the US is of course now not happening. After three days of losses, the dollar is bouncing but gold is too. Grains are higher as is copper. While the cash market is closed, Treasury bond futures are rallying with the 10 yr up almost a half a point. I think stocks are only down modestly because the economic impact for now of what is happening is so muted that there is no discernible impact to earnings, notwithstanding the human devastation in Israel.

Speaking of oil, the US crude oil rig count fell by another 5 rigs and now is below 500 at 497, the least since February 2022.