Happy Father’s Day! Hope all is well with you. U.S. Markets finished the week higher. A rally on Thursday followed a mid-week sell-off triggered by the Federal Reserve’s rate decisions. By the end of the holiday-shortened trading week, major benchmarks posted solid gains, bolstered by strong performance in semiconductor stocks. The Nasdaq led the way with a weekly gain of about 2%. In honor of Father’s Day, I have broken down this week’s update using quotes from Seinfeld TV Dad, Frank Costanza.
“Festivus begins with the airing of grievances. I’ve got a lot of problems with you people, and now, you’re gonna hear about it!” – Frank Costanza
As I cautioned last week, don’t get too excited about this potential peace deal. Iran’s joint military command decided on Saturday to air grievances, stating that the Strait of Hormuz has been closed again. Iran cited Israeli attacks in Lebanon and the U.S.“bad faith” and “clear breach of its commitments” by failing to end the war as its rationale. The statement on state television also warned that “if the aggression continues, subsequent steps have been planned.” Oil prices dropped last week as ships had begun transiting the strait after the interim U.S.-Iran agreement was signed earlier in the week. It remains to be seen what this weekend’s news will do to oil prices in the coming days.
“The doctor gave me a relaxation cassette. When my blood pressure gets too high, the man on the tape tells me to say, ‘Serenity now!'” – Frank Costanza
Kevin Warsh began his term as Fed Chair with his first meeting this week. Warsh raised the market’s blood pressure during his first news conference as Fed Chair. The meeting and his comments had a more hawkish tone than was expected. The decision to hold rates steady for a fourth consecutive meeting was widely expected, but the more hawkish commentary caused markets to reassess rate projections for the remainder of the year. The revised policy statement and Warsh’s tone caused markets to drop mid-week.
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