Recipe for a Rally (Three Ingredients)

What’s in Today’s Report:

• Recipe for a Rally (Three Ingredients)
• Weekly Market Preview: Yields Remain Key (Geopolitics and Inflation in Focus)
• Weekly Economic Cheat Sheet: CPI (Friday) is the Key Report This Week

Futures are modestly lower on higher oil prices as geopolitical risks rose over the long weekend.

Oil prices hit multi-month highs and that’s directly weighing on global stocks as Iran launched an unsuccessful attack on a U.S. Naval vessel and the U.S. sunk three Iranian tankers in response, keeping tensions elevated and the prospect of a near term ceasefire low.

In Russia, there was no progress on a Russia/Ukraine ceasefire despite U.S./Russian meetings over the weekend.

Today there are no notable economic reports nor any major Fed speakers so focus will remain on geopolitical headlines, oil and Treasury yields.  As has been the case for the past few weeks, any headlines that push oil and yields lower will help stocks rally (and if oil and yields keep rising, stocks will continue their decline).