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Briefing.com Summary:
*Oil prices are down on some positive developments.
*Bond yields are lower across sovereign bond markets in response to oil prices.
*Optimism is building in front of the Trump-Xi meeting on September 24.
Things sounded a bit dicey over the weekend, with reports indicating the Houthis had launched an attack on Riyadh and that President Trump left Camp David early to return to the White House. You wouldn't know there was anything problematic, though, looking at the equity futures market this morning.
The S&P 500 futures are up 49 points and are trading 0.7% above fair value, the Nasdaq 100 futures are up 312 points and are trading 1.0% above fair value, and the Dow Jones Industrial Average futures are up 399 points and are trading 0.8% above fair value.
More to the point, oil prices are down (not up), and that has helped drive a relief trade in sovereign bond markets that has afforded equity markets some relief on this Yom Kippur morning.
WTI crude futures are under $100.00/bbl, down 3.0% to $97.28, and Brent crude futures are down 2.6% to $101.27/bbl. Those moves stem from reports that Saudi Arabia managed to export nearly 3.0 million barrels of oil per day through the Strait of Hormuz the last six days and that there is some hope for a diplomatic breakthrough between the U.S. and Iran on the other side of the UN General Assembly this week.
That hope is rooted in the U.S.'s restraint in leading a counterattack, although President Trump made it known that the U.S. has several options for dealing with Iran, including "wiping Iran out." Iran said, according to NBC News, that it has the capability to introduce "new weapons" if the U.S. launches a new attack.
For now, the market is taking the under on a major offensive, resting some additional hope on the possibility of President Trump meeting Iran's president during the UN meeting this week.
That is one aspect of the world order playing out for the market. Another is the hopeful view that the U.S. and China could strike their own trade breakthroughs. President Trump and President Xi will meet in Washington on September 24, but Treasury Secretary Bessent and China's Vice Premier He Lifeng met over the weekend for some foundational work ahead of that meeting. Mr. Bessent labeled that meeting as being "successful."
Separately, President Trump announced on Truth Social that the U.S. struck a deal with Denmark and Greenland whereby it can develop a significant military presence in Greenland and block other countries from doing the same. Full details of the agreement have yet to be shared.
There is no U.S. economic data of note today, but little else seems to matter except the direction of oil prices and interest rates. Both are headed in the right direction at the moment for the equity market, which is ready to run at today's open.
