Brent crude sulked below $80 per barrel on Thursday as Iran indicated a plan with Oman may be imminent. But this potential deal appears likely to allow Tehran to retain control of inbound traffic to the Strait of Hormuz. Whether Washington will accept that arrangement is far from certain.
Meantime, the tech-heavy Nasdaq pulled back a touch on Wednesday, stalled by post-earnings stock price flubs from SpaceX and AMD, as well as from high-flying Sandisk and Western Digital. It was a split market, however, as the Dow Jones hit a new high.
Asian equities took their cue from the tech pullback stateside, with South Korea's KOSPI falling more than 4% and Japan’s Nikkei nearly 1% on Thursday. Wall Street futures were mixed before the bell.
Gold, perhaps reflecting hopes for an end to the Iran war and easing pressure on the Federal Reserve to hike interest rates, had its best day in six months on Wednesday, hitting its highest level in seven weeks. That said, it's still down nearly 20% from where it was when the Iran war started in late February.
All eyes are now trained on the July U.S. payrolls update due tomorrow. Labor market reports this week have so far come in on the softer side, with below-forecast private-sector jobs gains for July reported by ADP yesterday. Along with the lower oil price, that's helped take some of the heat out of the rates market and Treasuries.
But markets are also considering what Fed members are saying ahead of next month's meeting. Overnight, board governor Lisa Cook said she was prepared to raise rates if inflation didn't come down soon. At the same time, San Francisco's Mary Daly indicated she was more comfortable with the Fed's current stance as it awaits more data.
With that, onto today's column.
