Markets Trust Trump Victory Declaration – Maximalist Demands From Both Sides; Reality Check – Weak Treasury Auction
Weak Treasury Auction Please click here for an enlarged chart of SPDR S&P 500 ETF Trust (NYSE: SPY ) which represents the benchmark stock market index S&P 500 (SPX). Note the following: The chart shows continued buying after the stock market previously hit zone 1 (support). As described in yesterday's Morning Capsule , there was a deep excursion inside zone 1 in the premarket before President Trump's post rallied the stock market. This morning, there is buying in the stock market on President Trump declaring victory in the Iran war. President Trump said, "You know, I don’t like to say this, we’ve won this – this war has been won." From our sources, Iran has rejected the ceasefire proposal and is calling talks with the U.S. "illogical." So far, the markets believe President Trump, not Iran. The U.S. has submitted a 15-point plan. The U.S. demands are maximalist. Here are the key demands: No nuclear enrichment Dismantling of nuclear facilities Very limited missile production No support for proxies Joint control of Strait of Hormuz It is not clear who the U.S. is negotiating with on the other side. Iran continues to say it is not in talks with the U.S. Iran has also put out maximalist demands. Here are the main demands: Reparations for the damage Guarantee of no future attacks No sanctions No U.S. bases in the area Iran charging for passage through the Strait of Hormuz just like Egypt charges for passage through the Suez Canal There is conflicting information, and it is hard to know what is real and what is a chess game. In our analysis, in spite of conflicting information, the scenario with the highest probability remains a ceasefire deal that is minimalist to allow for more time for more negotiations. There are reports that U.S. allies in the Gulf are concerned that ... Full story available on Benzinga.com
