Stock Market Rally Isn't Running Out of Fuel. US Economy Still Acing Stress Tests.

President Donald Trump may have to write a sequel to his 1987 book, "Trump: The Art of the Deal." It's hard to make a deal if you kill your opponent. He said that about Iran today again: "They’re all messed up. They have no idea who their leader is... We took out, really, three levels of leaders... So they have a hard time figuring out who the hell can speak for the country." Reports surfaced today that Mohammad Bagher Ghalibaf, the Speaker of the Iranian Parliament and Tehran's lead negotiator, has resigned from the negotiating team. He allegedly did so due to persistent interference from the hardliners in the Islamic Revolutionary Guard Corps.

As a result, Brent is back up to $100 a barrel this evening. However, the futures market is still signaling a sharp decline over the next 12 months (chart). That's certainly a possible outcome, but why isn't the price of oil much higher today since the Straight of Hormuz has been effectively shut to navigation since February 28, when the war started? Oil is leaving the Middle East via pipelines and oil truck convoys. Also, Russia is supplying more oil to both China and India. Japan is buying oil from Mexico.