For the 4th year in a row, markets were up sharply the first trading day of the year. It often continues for the 2nd trading day so look for more gains tomorrow, especially in the AM when European orders come in.
Stocks were generally up 1.5% today. Gold was up 2.5% and oil 4% on continuing harsh rhetoric from Iran concerning new sanctions.
Iran has been conducting military exercises in the Persian Gulf and last week threatened to block the Strait of Hormuz at the end of the Persian Sea. The US sent a carrier to the area which has since turned around and Iran warned today against sending it back when their exercises are over.
Of course, Iran always talks in blustery tones so it is hard to know how much store to put by their remarks. My guess is while they may go higher short-term gold and oil will drop back some when the talk blows over. The tone of Iran’s leadership is really at odds with their people and I don’t think Iran really wants a war with the US.
The US dollar dropped sharply today. Keep an eye on that because nearly everyone thinks the Euro will go much lower than the dollar this year, not higher. Sometimes trades get too obvious and too crowded and that may be the case here.