Hegde Fund CIO: "After This Market Rolls Over, Rates Are Going Back To Zero, And The Fed Balance Sheet Will Balloon"

By Eric Peters, CIO of One River Asset Management

Iran has agreed to never close the Strait of Hormuz again. It will no longer be used as a weapon against the world!” posted President Trump on Friday morning. The Nasdaq closed the week at another new all-time high, extending its winning streak to thirteen days. It is as if nothing can hold this market down for very long. Not a Persian excursion. Not another energy crisis. Not an 85% probability that Democrats take the House in November. Nor a 50% probability that they’ll take the Senate. Not evidence that China helped Iran target US bases. Not the recent congressional scandals. Not a fight with the Fed Chairman. Not even a fight between the President and the Pope. It is generally true that a market that refuses to fall on bad news must rally. And vice versa. But you tend to only discover the real reasons why that’s the case after the move is mostly over.