Hormuz Is Closed, Oil Is Screaming, and the S&P Just Hit 7,000 Anyway

Let's set the scene: the Strait of Hormuz is closed, a US naval blockade has forced 10 vessels to turn around, physical oil markets are so stressed that dated Brent is trading $25-$30 above ICE Brent, and the IMF is warning of a 400-million-barrel oil shipment shortfall. The S&P 500 responded by hitting an all-time high above 7,000. The Nasdaq just logged an 11-day winning streak. Markets, apparently, have chosen vibes over geopolitics.

The bull case, per CNBC's Paul Hickey: bank loan growth is up 10% year-over-year (highest since the financial crisis), unemployment sits at 4.3%, and 8 of 12 Fed districts are growing. Bloomberg Surveillance's physical oil desk is less chill — Asia faces compounded supply disruptions with 15-20 day transit times meaning actual shortages hit soon. The Market Edge Oscillator also just swung from -8 to +8 in under 10 days, one of the fastest moves on record, with Jim Cramer flagging only ~1.8% average S&P gain expected over the next 30 days.

The market is pricing in a ceasefire. Iran is pricing in a counterstrike. One of them is about to have a very bad Monday.