Svmuu reports that Garrett Jin, the proxy for the "1011 Insider Whale," stated that the market is currently pricing in "peace expectations," driving risk assets higher, yet diverging from the supply and demand situation in the energy market.
He pointed out that while the S&P 500 index hit a new all-time high, Brent crude oil prices rebounded to around $103. Previously, hedge funds had heavily shorted crude oil, with Goldman Sachs data showing a short-to-long ratio once reaching 7.6:1. The conditions the current market rally depends on—such as the resumption of traffic through the Strait of Hormuz, a decline in oil prices, falling inflation, and Federal Reserve rate cuts—have not yet materialized. The gap between forward earnings expectations and actual earnings has widened to levels seen at the 2021 peak.