Iran Deadline Looms as Futures Quiet to Begin Week

0:00And let's get out to Tom White, who joins me now from Chicago. Very good morning to you, Tom. Obviously, we have got markets digesting a lot of headlines once again this morning, conflicting reports. Obviously, we cannot repeat what President Trump said over the weekend, because we'll have compliance on our backs. We also don't want to offend the children, Tom, but you do have Iran talking about this ceasefire this morning saying no rational person would agree to a ceasefire. So once again, we are looking for some direction. As we do have these conflicting reports and this asymmetric war playing out, just walk us through your thoughts today. Yes, Emma. You know, the uncertainty continues in equity markets isn't based on headline risk. Now you mentioned the fact that we had some solid gains last week, snapping those five week losing streets for the major averages. That's a positive sentiment and spin in that holiday, shortened week. So that's the positive side of it. Now you're talking about the conflicting reports that are coming out of whether it's Axios, whether it's Reuters, 45 days ceasefire. Who knows if that takes place.

1:00President Trump, we had that deadline today for them to open the streets of Hormuz. It didn't come to fruition over the weekend. He extended that to tomorrow at 8 p.m. Eastern time. Now I'll give some remarks here today, and potentially tomorrow, if we are going to go after their infrastructure, whether it's bridges, whether it's the electrical grid over in Iran. And so those are going to be, you know, at the top of headlines. If you looked at some of the traffic flow through the streets of Hormuz, it was actually 21 ships passed through over the weekend. That's a big jump from what we've seen recently, but these are all probably those boats heading to the southeast of Asia, whether it's India, potentially China also. So they're still monitoring that. They're working with Oman on perhaps creating some type of plan where they're going to charge ships that passed through. That gave the markets kind of a lift on Thursday in that final session of the trading week and kind of spun things to the upside.

2:03But, you know, you have to take a look at what's going on with oil here, Sam, because, you know, while we're down 1%, you know, crude oil, WTI, still near $110 a barrel. That is going to create headwinds. Jamie Dimon out with some notes on his annual letter today, basically stating, and I think this is what people have to focus on is, yeah, oil markets, energy markets are in flux right now, but the downside impact that it's going to have to the consumer, supply chain risks, how long this is lasting as far as the conflict with Iran. So you have to start taking that into consideration at this point, Sam. And I think the skepticism you're right is really playing out in the oil price this morning, particularly that's far right, because I heard of you this morning that if the market subscribed to the view that we were going to get some sort of off ramp here with a 45-day ceasefire and that that was going to happen within the next 48 hours or so, that we wouldn't be seeing WTI trading above $100 right now Brent for that matter. So I think you're right to point that out.

3:05And of course, I'll pick over the weekend interesting as far as their production, quote, is being raised as well over in May. But I mean, that is largely symbolic given that a lot of those members, of course, have trouble getting their stuff through the strait. I thought it was more interesting what they had to say about the repairs to energy facilities. It's going to be costly and it's going to take some time. But obviously, just moving away from oil and the data. Now, Tom, this is the first chance of the markets are going to have to wrap their arms around that jobs report. Obviously, the data has been taking somewhat of a back seat lately, but just walk us through your thoughts on this because no doubt it gives the Fed a little bit more headroom now, no doubt. Yeah, definitely a good number on Friday morning when markets were closed. 178,000 jobs are far above the expectations of about roughly 60,000 that they were expecting. And this comes on the back of those losses that we saw the prior month, but that was based on maybe a strike out with West with Kaiser Permanente. You did see that unemployment rate fall to 4.3%,

4:06but we did see a fall in labor participation rate. So that stabilization in the jobs market, Sam, I think that's going to be key. This week, because we get some inflation data, a delayed PCE this week, we get the CPI from March on Friday. This is going to kind of come into that narrative that we've had, where we're in a no higher, no fire type of situation, as far as the job market goes, where the Fed needs to pivot away from jobs because we're stable there, and we just need to flip that narrative back to what inflation is going to be. Now, that CPI report on Friday morning, if we get it, expected to show some volatility in those numbers as crude oil ramped up last month. So that's going to be, I think, key on the back of traders' minds at this point. And then we get the Fed mittens on Wednesday also. But jobs report pretty solid. We've seen those weekly jobless claims numbers, even though they ticked up on Thursday a little bit. Those have been relatively stable also. So I think the Fed has to pivot back to what inflation is going to do.

5:09We all know, Sam, that the expectations for a rate kind of basically gone away for 2026 due to the fact that we're going to have those inflationary pressures, probably, at least in the near term. Yeah, at least the jobs report keeps the Fed on hold for now and gives it that breathing room, as you mentioned. But I thought what was really interesting was a one-data print that got very much overlooked on Friday was the S&P services, which actually fell into contraction for the first time in a few years. And what the economist actually said was that the data showed the economy buckling under the strain of rising prices and intensifying uncertainty here. They used the word stagflationary environment of stored growth and surging price pressures. So obviously that is something to keep in mind as well. When we talk about the CPI and that feed through that pass through as well, we've got ISM services this morning at 10 AM, which obviously the markets give a lot more credence to and carries a lot more weight than S&P. But just getting back to the markets and some of this price action

6:11this morning, Tom, what's happening with Bitcoin? I mean, rallying. We're almost 70,000 once again on BTC. Yeah, you wonder if this is maybe a pushback into a little bit of safety play here. We're starting to see some stabilization. Remember, at the beginning of March, we saw a really steep decline from, you know, basically the 97, 98,000 level in Bitcoin down below, you know, we hit 60,000 basically throughout the month. But now we're starting to see some stabilization. We're starting to see some stabilization and gold prices also. So markets may be getting comfortable, but those asset classes, when we see certainty and stabilization, Sam, I think that's going to be key. And I think they may be, maybe that's why you saw that little bump up in equities last week is that if we see some stabilization, whether it's Bitcoin, whether it's gold, whether it's yields, we pulled back and yields a little bit. We're sitting just above 4.3% in that 10 year. That's all going to be positives for the equity market as we try to work through the headline risk

7:12that we've got coming out of the Middle East at this point. So stabilization, good in these markets. We're near that 70,000 level in Bitcoin. We're still below the 50 and 200 day moving averages in Bitcoin. But approaching that 50 day simple moving average, maybe that becomes an area of resistance. But I think the key, Sam, with a lot of these asset classes is stabilization at this point with all the uncertainties in the equity market at this point is probably a positive for risk on assets moving forward. Hopefully we'll get some good news out of the administration, out of the potential ceasefire that might come down over the next couple of days. Maybe the next couple of hours, Sam. But stabilization in these markets, probably a positive here for equities. Or the next couple of minutes. I mean, obviously we've seen what happens in recent weeks. We've got a press conference apparently at 1 p.m. Eastern, out of President Trump in the military. So let's see what they have to say. Tom, really appreciate it. Thanks for breaking down all those stories for us.