Instant Reaction: Stocks Surge After Trump Statement

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1:23We'll be right back. The income is not guaranteed. Prepare by BlackRock Investments, LLC. This is a breaking news update from Bloomberg. Instant reaction and analysis from our 3 ,000 journalists and analysts around the world. The president communicates with the world through his favorite messaging. It is a very long tweet. I'm going to get to the key sentence. I've instructed the Department of War to postpone any and all military strikes against Iranian power plants and energy infrastructure for a five-day period. Markets reverse and rocket. NASDAQ up 2 percent. Standard & Poor's 500 exploding up 150 points.

2:07Paul Sweeney, your interpretation, please. I think a lot of folks have been waiting for this social media post. At some point, President Trump's just going to say enough is enough and maybe perhaps think about moving on. We are fortunate to have Germana Bersetzi here. Germana, I guess this raises a question in to the extent that President Trump is looking here, as this tweet suggests, to kind of step back and wind down operations in that part of the world. Is there a sense that that's the right move at this point? Or is it there a sense that, boy, the U.S. has broken this part of the world and it's going to be up for others to deal with it?

2:39Look, I think there's a big question about what exactly the U.S. are trying to achieve here and all of the mixed messaging that has come through this weekend. We woke up in the morning on Saturday to news that President Trump was thinking of a military wind-down only a few hours later to put up this 48-hour ultimatum to Iran, a threat to attack their power plants. And we know that, as I just mentioned to you, that would constitute a real existential threat to many of these Gulf states, the desalination plants specifically. They have been putting a lot of pressure, most likely, on the U.S. administration not to follow through on that threat.

3:11But at the same time, the fact that he's pushed it back by five days suggests that the threat of them acting is still there. And then equally alongside that, our own reporting suggests that the U.S. are weighing up the possibility of taking over Karg Island, sending thousands of more Marines to the region as well. And so any way you look at it, it does seem like this war is going to go on for a couple of weeks rather than a couple of days, irrespective of the post that he just put up now. Jubana, please stay with us. I have to do a market check here to keep it going. Oil plunges. A dollar comes in weaker right now as well.

3:46Also, gold, Tom, gold is down about 3.7%,$4 ,400 per ounce. Robert Titor, Chief Investment Strategist at Silvercrest Asset Management. Robert, you walked into the door probably with one set of expectations. Now we're here with one tweet later or one social media post later. The world's changed yet again. How do you put that in context? Yeah, absolutely. You know, it's been very much a day-by-day environment here, and I think this really speaks to it as well. You know, you've had a market that corrected sort of gradually as it went through this process rather than some of the prior events we've had where you had a really big, significant decline and then you sort of work your way back.

4:22And I think that was the market's expectation that this day would come at some point. So it was a step by step, day by day adjustment. Because we sit here today, the critical element will be if this is a five day window, do we start to get ships and commodities and oil flowing through the strait in the next five days? The timing sets up interest in me as I look at it. You know, this is something that could be contained to first quarter in terms of any type of disruption that companies want to blame this on. So if you get oil moving in the next five days, then I think we're right back pretty quickly to a pretty normal environment where investors are looking at second quarter, third quarter and beyond.

4:55If you get no traffic through the straight over the five days, it's you know, you still have to be a little bit careful there. Did the bond market tell the president what to do? I mean, at a seismic shift in bonds, the bond market shifted. I mean, I'm sorry. Bonds lead stocks. Absolutely. Bond market, a powerful player here. If you want to call it the bond vigilantes, you could. This is a very strong message the bond market was sending and saying something needs to happen and soon. Now, we've had commentary before that indicated that perhaps we were towards the end of the conflict. And so, again, for me, it's a one variable metric.

5:27I look here on Bloomberg at ECAN and look at the traffic through the strait. And hopefully over the next few days and weeks, we'll start to see some numbers ticking up there. I guess if you're the Fed here, inflation was something that probably had your attention a little bit more than expected the last meeting. Maybe this suggests that there may be a little easing on that front, a little bit, at least on the energy side. Yeah, I think that's right. Again, especially if traffic starts flowing through the strait, then, yes, you get an alleviation in oil prices that we're seeing here this morning.

5:56That alleviates some of the stress in terms of commodities across the board, not just oil, but other commodities as well. And the pass-through effect puts the Fed in a much better spot. I hesitate to say that we'd get back to normal right away, but I think pretty quickly we can get back to normal in terms of balanced outlook with a bias towards a cut later in the year if you get a weak employment print. Our view had always been that you will get a weak employment print at some point. It might be a blip, and that'll be what gives the Fed the catalyst to respond. Thank you for our first view of the morning.

6:24Robert Teter, greatly appreciated. Head of Investment Policy and Strategy, Silvercrest Asset Management. man to. Paul, I just did a fancy chart of Dow Jones Industrial Average Futures. It's incredibly elegant chart. We are down in the gloom of perfect two standard deviations, and we've bounced right up to my key middle term moving average line. We have a long way to go on the Dow to get back to normal. But seeing the Dow up a thousand, you don't see that every day. So again, markets moving on, trying to digest what this means in the next several days and what it means over the next several weeks, so we'll stay on it.

7:00Perfect timing to speak with Henrietta Trey's co-founder of VEDA Partners, just wonderful on the pulse of Washington. Henrietta, who did the president listen to? Who did he take counsel from to make this reversal in policy? Well, you can really pick your target. It could be the immigration polling data. It could be the fact that Congress is not going to pass this$200 billion supplemental spending request for many months now. It could be the gas prices that are increasing nationwide. It could be the fact that you can't, you know, unwind the Jones Act and expect it to offset closure of the straight and more moves.

7:34But the economic data sets going into a midterm election cycle are a problem that, you know, the president created and he has to fix. There's no interplay with Congress here. So it makes sense that he'd be the executor sort of implementing change and winding things back as it becomes completely untenable for the American public to support him going into a midterm election cycle. But you go right to where I wanted to go next. Who is the interplay with his inner circle? Who is he talking to within his inner circle? Or is this a president alone? I think it's got to be an expansive set on everybody from the fundraisers and the donors to the political campaigns, the down ballot Democrats, excuse me, Republicans, as well as his own cabinet that is continuing to see polling data come in over and over and over again, saying that the American public does not support the war.

8:23You might have 94 percent of the MAGA base, but you've lost everybody else, including a huge majority of independents. So when you look at those data sets, it doesn't matter who enters the room. If it's your energy secretary, your transportation secretary, your secretary of defense, all those people are getting negative feedback from the Pentagon to the State Department.

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