Coming out of the long holiday weekend with the cloud of geopolitical uncertainty equities were able to close higher after a choppy day of trading. The S&P 500, Dow, Rusell 2k were all up +0.4%. Investors digested a weekend of Iran headlines, plus a long press conference from President Trump mid-day, which contained no major updates but stressed both the latest upcoming deadline (8pm tonight) and his desire to find a peaceful resolution. It was the lowest volume day of the year a function of light attendance, most global markets being closed and traders largely sitting on their hands with the wide range of potential outcomes looming. Most sectors were higher with Discretionary, Energy and Staples leading. Utilities, Healthcare and Materials lagged. Yields were mixed as 2s and 10ys rose 2bp while 30y fell 2bp. ISM Services missed estimates but was generally solid overall, though Prices increased, though that wasn’t unexpected.

The cloud of uncertainty is clearly weighing on sentiment today. As the countdown clock keeps ticking the situation remains fluid with the two sides continuing to exchange bellicose rhetoric. There are also conflicting reports about the diplomatic efforts and whether those lines of communication remain open or not. Meanwhile there have been strikes on military targets on Kharg Island, bridges and railways. The S&P 500, which remained capped by its 200d ma yesterday, was down >1% at the lows but has traded almost all the way back to unchanged after headlines at 1:30 that the UN Secretary General’s Personal Envoy was en route to Tehran. The S&P 400 and 600 have been outperforming and are now up ~0.3%.