Trump roils markets touting quick end to Iran war

0:00Welcome to Seeking Alpha's Wall Street Lunch, our afternoon update on today's market action, news, and analysis. Good afternoon, today is Monday, March 23rd, and I'm your host, Kim Khan. Our top story so far, President Donald Trump flipped the market narrative this morning, seemingly a quick end to the war in Iran and potential joint control of the Strait of Hormuz. Risk-off sentiment reversed sharply, equities in crypto rallied while Treasury yields an oil fell, odds of a fed rate hike as soon as October evaporated. But the situation remains fluid, but the Iran pushing back on the President's assertions that negotiations are advancing. Here's what we know. In posts and interviews, Trump said U.S. envoys were in talks with Iranian counterparts and claimed 15 points of agreement, including that Iran would not pursue a nuclear weapon. Iran's foreign ministry denied that any talks were taking place and accused Washington of trying to buy time, according to Bloomberg. Israeli official also said there's been sign of an imminent end to the war. As one analyst quipped, it takes two to talk up.

1:01Here's the market reaction, stock swung from pre-market losses to strong gains. All three major averages are up more than 2% though trading remains choppy. Treasury yields a retreating with a two-year back below 3.85%. Oil is down sharply, with double-digit percentage declines in both WTI and Brent. Sentiment is moving with every headline and post, but Michael Brown, strategist at Pepperstone, said the signal may matter more than the noise. Have there been talks? Who knows? Doesn't matter, he wrote. The signal is that Trump's pullback on his ultimatum is seeking de-escalation and appears to be looking for an off-ramp that feels like the most important piece right now. Among active stocks, draft kings and flutter entertainment are rallying, after the Wall Street Journal reported that U.S. lawmakers are preparing bipartisan legislation that would bar prediction markets from offering contracts that effectively function at sports bets. The bill, led by Nevada Democratic Representative Dina Titus, would target sports trades and other casino-style games on platforms such as Calche and Pauline Market.

2:01Those platforms argue their contracts fall under federal derivatives rules rather than state gambling laws. And as Metacy E.O. Mark Zuckerberg grooming his own AI successor, the journal reports that Zuckerberg is developing an AI agent designed to help him retrieve information more quickly, reducing the need to filter requests through layers of management. In other news of note, do you want AI's with that? McDonald's outlet in Shanghai is deployed humanoid robots to serve customers. These make replicants, as they should be known, and built by Chinese firm Keenan Robotics, deliver meals, collect trays, provide information, and greet guests. Keenan called it a showcase of how service automation is becoming a seamless part of global dining. They've also seen happy meals you wouldn't believe. And in the Wall Street Research Corner, cities refreshed its return on equity trends basket, focusing on companies where Ford ROE is improving due to better margins and stronger asset turnover, rather than financial engineering. The bank describes a theme as the second derivative equality, arguing that the change in ROE trajectory offers more differentiated exposure than the quality factor itself.

3:05Among large cat names showing positive ROE trends are Vistra, Boeing, Southwest, Omnicom, and Take 2 Interactive Software. That's all for today's Wall Street lunch. Look for links for stories in the Schoenert section. Don't forget, these episodes will be up with transcriptions at SeekingAlpha.com slash WSV, and join the elite community of real investors to unearth great investing ideas. Just head to SeekingAlpha.com slash subscriptions.