Good morning,
 
Markets had a lot to digest last week. There was an escalation in kinetic activity between the US and Iran sending oil prices sharply higher. However, better than expected inflation data helped to keep Treasury yields in check. US equity markets ended the week in the red as there was a continued unwind of momentum. The S&P 500 ended the week down ~1.5% closing just under its 50d ma.  Semi and memory stocks bore the brunt of the weakness with both groups down >10% for the week.  Earnings season got underway and as expected the bank earnings were strong helping the sector to be one of the few to end the week higher.
 
Outside of a dominant performance by Spain in the World Cup finals and Ryan Fox birdying the final hole to win the Open Championship the primary focus this weekend was the continued escalation in Iran and the ramifications of DeepSeek part Deux with Moonshot’s Kimi 3 model release. ICE Brent re-opened last night >$90 but started to pullback right around the time European markets opened after a spokesman from Iran’s Foreign Ministry said negotiations with the US would be pursed based on “national interests”.  Prices took another leg lower after reports that mediators proposed a 10-day ceasefire however, shortly after priced bounced back to around unchanged levels after the Houthis announced a “sea navigation ban” on Saudi Arabia which has rerouted much of its oil exports to the Red Sea. S&P futures have been trading modestly higher overnight as there has been some stabilization in the tech stocks that got walloped last week ahead of some key earnings reports over the next few days. S&P futures are currently up ~0.4% recouping about a third of Friday’s selloff but have backed off from the morning high after the most recent headlines.
 

 
Treasury yields are up 1-2bps across the curve. The only economic data on the calendar is consumer confidence after the open. The USD index is back near overnight highs up ~0.2% at ~$100.75

• US 2yr +1bps to 4.20%, 5yr +1bps to 4.30%, 10yr +1bps to 4.57%, 30yr +1bps to 5.09%
• USD index: +$0.14 to $100.73

Most global markets traded higher overnight. South Korea reopened after being closed on Friday and promptly fell 4.5% while Japan was closed. Markets in China moved higher amidst reports that the “national team” was active in the market. The PBOC left rates unchanged. The Hong Kong Hang Seng was up >2% as tech stocks continued to move higher after last week’s news. There have been press reports that the administration is considering blocking the use of open-source Chinese AI models.  European indices are holding on to modest gains. PPI in Germany came in a touch better than expected. Ryanair is down >5% after missing estimates. In the UK Burnham was officially appointed as the PM and is expected to his policy agenda and cabinet over the next couple of days.
 

 
Headlines have been driving some volatility in oil markets with prices off the highs. US nat gas prices are modestly lower but prices in Europe continue to move higher as there is also an escalation in the Russia/Ukraine theatre. Metals are mixed. Gold is slightly lower continuing to hold just above 4k. Copper and silver are both bouncing modestly.  Ag prices are also moving higher. Crypto is bouncing off the morning lows. Bitcoin is trading just under 65k while Ethereum is just under 1.9k.
 

 
Reasonably quiet on the corporate headline front some highlights below:

• Domino’s Pizza (+>5%) missed EPS estimates but mgmt. highlighted “meaningful” order growth during the quarter
• AMC (+>15%) after better-than-expected results
• GME disclosed a nearly 10% stake in EBAY
• LXP being bought for $5.2B by Brookfield and Canada Pension Plan

 
Earnings:
Pre-Market: AMC, DPZ, Ryanair
After-Market: AGNC, CALX, CCK, MCRI, STLD, WRB, ZION
Pre-Market: ALLY, DHI, DHR, EFX, GM, GPC, HAL, HAS, KEY, MMM, MRSH, NVS, MSCI, NOC, SCHW, SYF, VMI
 
Economic Data:
US:

• 10:00 CB Leading Indicators
• 11:30 3/6mo T-Bill auctions

Global:

• PBOC leaves 1/5yr LPR rate unchanged
• Germany PPI: -0.3%/1.8% vs. -0.2% cons., prior 0.3%/2.2%
• Canada CPI: -0.4% vs. -0.2% cons., prior 1%