Good morning. Equities were sharply higher yesterday on the back of the latest optimistic signals that the Iran conflict is reaching an end. The S&P 500 and Russell 2000 rose 1.5%. Brent fell 8%, yields fell 5-8bp and gold rose. President Trump announced a pause in Project Freedom and reports of the two sides edging towards an MOA served as a primary catalyst for yesterday’s strength, with earnings and AI news flow providing another boost. On the Iran optimism, we’ll note we’ve already seen many false dawns.

Coming off of the Knicks Game 2 win last night, the geopolitical news feed today has been relatively quiet, with Iran’s response to the US’ latest proposal the primary anticipated event. Equity futures haven’t been doing much this morning, in line with the news flow. The S&P is around unchanged.

The latest round of earnings continued to come in strong overall though stock reactions are more nuanced. WHR is under pressure after a tough report and commenting that the Iran war led to “recession-level industry decline in the U.S. as consumer confidence collapsed in late February and March.” CF posted solid consensus beats but is trading lower. The company noted that 50-60% of ammonia and urea capacity in the Middle East was hampered in some way while Russia and China nitrogen/fertilizer exports are limited. Software is seeing some divergent earnings responses. DDOG and FTNT are up sharply in the software space while APP is down modestly, SNAP is under a bit of pressure and FSLY is down sharply. On the equipment side of things, ARM and COHR are trading lower.

Jobless Claims this morning continued to remain at low levels. Non-farm productivity fell in Q1 and was below consensus, along with Unit Labor Costs. Treasury yields are continuing to move lower this morning down 5bp at the short end, with the Dollar following lower. Oil continues to come in, down another 5% this morning. Posts from Arabic news outlet Al Hadath about “intensive” talks to reopen Hormuz helped push prices down overnight. Precious metals continue their inverse correlation, moving higher. Ag is mostly lower and crypto is slightly lower as well.