Deep Value

White House confirms more US-Iran peace deal talks are actively being discussed, even as traffic through the Strait of Hormuz remains at a near standstill. That disconnect is the real story. Trump tied the ceasefire to the strait reopening, but ships still aren't moving freely. Whether these talks produce anything concrete or just more headlines is the question the oil market is pricing in right now.

Asia markets are extending gains into the session as Iran deal optimism keeps oil prices under pressure. This is a continuation of the same trade that drove Wall Street higher on Tuesday. Lower oil is feeding through to transport stocks, manufacturing, and consumer names across the region. The Nikkei and Hang Seng are both holding solid gains early in the Thursday session.

Asia markets are holding their gains as the session gets underway, tracking Wall Street's overnight rally with oil prices continuing to slide on U.S.-Iran deal optimism. The through-line here is that lower oil prices are doing a lot of heavy lifting across global markets right now. Airlines, shipping, and consumer-facing sectors across the region stand to benefit if crude stays suppressed while diplomacy plays out.

The US job market looks a lot weaker than the headline numbers suggest. Since January 2024, healthcare and social assistance has added 1.7 million jobs. Every other industry combined has shed 56,000 over that same stretch. Strip out healthcare and the labor market has been essentially flat for well over a year. That context matters a lot when the Fed is leaning on "labor market resilience" as a reason to stay patient on rate cuts.

Asian markets followed through on that open-higher setup, with the Nikkei, Hang Seng, and Sensex all posting cautious gains as oil prices eased on US-Iran talk optimism. The recovery is real but guarded. Traders are not fully buying into a resolution yet, and Hormuz uncertainty is keeping a ceiling on how far risk appetite can stretch. Vance already flagged earlier today that deep mistrust between the two sides makes a quick deal unlikely, and that skepticism is showing up in how these markets are trading.

Asia markets are set to open higher as optimism builds around a potential U.S.-Iran nuclear deal, with oil prices pulling back sharply. WTI crude dropped 2.39% to $88.94 a barrel as of Tuesday evening. Brent fell more than 4% to settle at $94.79. That kind of move in oil is meaningful relief for import-heavy Asian economies that have been absorbing elevated energy costs since the Gulf tensions escalated. The combination of diplomatic progress and falling crude is giving markets in Tokyo, Seoul, and Hong Kong something to work with heading into Wednesday's open.

Japan is moving to formally classify oil-based products as "specifically important" under its national security framework, according to Nikkei. This is a direct response to the Gulf crisis disrupting global supply chains. Japan imports nearly all of its oil and has very little buffer if Middle East flows get choked off. Formalizing this classification gives Tokyo more legal authority to stockpile, subsidize, and protect oil supply as a strategic asset.

France has entered the Iran nuclear negotiations, according to sources, adding a major European player to talks that have so far been dominated by the US. This matters because French involvement signals the diplomatic effort is broadening beyond bilateral US-Iran talks. France has historically been one of the toughest voices on Iranian nuclear limits inside the E3 framework alongside the UK and Germany, so their active participation could push for stricter terms than Tehran might prefer.

Gold held onto its recent gains after U.S.-Iran negotiations cooled fears about an oil-driven inflation spike, with crude pulling back and the dollar softening. The setup is unusual. Gold usually climbs on fear. Here it's being supported by the absence of fear, specifically the possibility that an Iran deal removes a major upside risk to oil prices and gives central banks more room to stay on hold or cut. Lower oil, softer dollar, and reduced inflation pressure are all running in the same direction right now.

Central banks that spent years hoarding gold are now selling it, and the reason is simple: war costs money. Some sovereign holders are liquidating bullion to raise cash as military and economic pressures from the ongoing Gulf conflict force hard choices about reserves. Gold had been the go-to safe haven asset during the accumulation years, but when a government needs liquidity fast, even gold gets sold. This is a notable shift. Central bank buying was one of the key structural drivers propping up gold prices over the past few years. If that demand pillar starts reversing, even modestly, it changes the supply-demand picture for the metal going forward.

Vance confirms the US is actively negotiating with Iran. This is a direct statement from the Vice President, adding official weight to what had been described earlier as cautious diplomacy. The last two tweets on this topic covered his skepticism and then a shift to optimism. Now he is putting it plainly: talks are happening.

Vance is now striking a more optimistic tone on the Iran nuclear talks, saying he feels good about where things stand. That's a notable shift from earlier today when he was emphasizing deep mistrust between the two sides. The back and forth from the US delegation suggests the talks are still very much in motion, with sentiment swinging by the hour.

Vance is tempering expectations on the US-Iran talks, saying the deep mistrust between the two sides is not going away quickly. This comes as negotiations have been ongoing, and Vance's framing suggests the White House is bracing for a long road rather than a fast deal. Not exactly the language markets want to hear heading into another round of talks.

Bernstein analyst Mark Moerdler is calling $MSFT a buy right now, arguing the stock may be forming a bottom after its recent underperformance. His thesis centers on capex payoff. Microsoft has been spending heavily on AI infrastructure and Moerdler thinks the financial returns on that spending are about to start showing up in the numbers, which he expects to act as a catalyst for the stock.

S&P 500 closed Tuesday less than 1% away from its all-time high set on January 28, and stock futures are little changed heading into Wednesday. Two straight days of gains have the index knocking on the door of record territory. Whether it breaks through depends heavily on any new developments out of the Middle East and what tone Fed speakers strike this week.

$NVDA just closed out a 10-day winning streak, its longest run in months. The rally comes as confidence in the AI trade quietly rebuilt itself after a rough stretch earlier this year. Blackwell demand, data center spending commitments from hyperscalers, and fading fears around export restrictions all gave bulls a reason to come back in. The stock is up roughly 50% from its April lows.

Secretary of State Rubio met with Egypt's foreign minister today to discuss a potential Iran ceasefire, the latest sign that back-channel diplomacy is picking up steam. Egypt has historically played a quiet but important mediating role in Middle East conflicts. Rubio choosing Cairo as a stop suggests the US is working to build a regional coalition around any eventual deal rather than going it alone.

Venezuela's government is pushing oil companies for input on the energy sector while making clear that US sanctions need to go. Jorge Rodriguez says the licensing framework lacks long-term legal certainty, which is exactly the argument major oil producers have used to avoid committing serious capital to Venezuelan fields. $CVX has been one of the few US companies operating there under an OFAC license, and that license status has always been the central question for anyone looking at Venezuelan crude production. If sanctions come off, Venezuela could eventually add meaningful supply back to global oil markets. It is sitting on the world's largest proven oil reserves but has seen output collapse from over 3 million barrels per day in the late 1990s to a fraction of that today. Any credible path toward lifting restrictions would be a supply story worth watching.

$ORCL closed higher for the second straight day as the software sector continued to bounce, and the company expanded its capacity agreement with Bloom Energy. Bloom Energy was the real story today, closing up 22% on the news. The deal is tied to AI data center power demand, which is becoming one of the most important infrastructure themes in the market right now. Data centers need massive, reliable power, and fuel cell companies like Bloom are increasingly being seen as part of the solution.

Kim Jong Un says he is ready to meet with Trump at any time to help mediate between the US and Iran. This is a notable offer given North Korea's historically close ties with Tehran. Whether Trump takes it seriously is another question, but any new diplomatic channel involving the Hermit Kingdom and Iran in the same sentence is worth watching.

UK 10-year gilt yields just hit 4.9158%, the highest since the 2008 financial crisis, as the government sold a record £15 billion in bonds through its 2036 syndication. The demand was staggering. £148 billion in orders poured in for that £15 billion sale, nearly a 10x oversubscription. That kind of appetite suggests global investors still want UK debt, but they are demanding a serious premium to hold it. Higher yields mean higher borrowing costs for the British government at a time when fiscal pressure is already a major political flashpoint in London. Worth watching how this feeds into the broader developed market bond story. Gilt yields moving to post-2008 highs does not happen in a vacuum.