JPMorgan on Ceasefire - FJElite

We are moving back to Tactically Bullish. This ceasefire should trigger a re-risking potentially similar to the post-Liberation Day pivot. How far could this go? SPX futures are trading -6810, so breaching 7k feels likely as euphoria returns to markets. A positive earnings season (previewed below) is likely to help boost Equities further especially given the decline in Tech valuation over the course of the conflict. We reposted the most recent Positioning Intel note. The keys are that Iran is opening SoH and that both sides can extend the ceasefire after two-weeks. Assuming that this is not a feint from any of the parties, the market is likely to treat this as a de facto end of the conflict despite the economic damage that is still coming across all regions. Normalization of SoH throughput will matter to Energy markets and ultimately inflation; further, there may be a residual geopolitical / re-escalation risk premium that keeps oil prices elevated over the near-term. Longer- term, energy shocks tend to boost inflation, negatively impacting consumer; but, this will take time to play out in the data so keep an eye on jobs and spending data as well as incremental fundamental improvements that support a sustainable move above 7k in the SPX.