GOOD MORNING! A flare-up of tensions over the Strait of Hormuz sent stocks lower and Treasury yields higher around mid-day on Thursday. Oil prices rose as fears of a more extended closure of the Strait increased, worsening the disruption in energy flows. The downward moves in stock and bond prices were tempered somewhat in the afternoon, but both stocks and bonds ended lower on the day. We understand the US Navy now has orders to shoot any boat putting mines in the Strait, there are reports that two supertankers having been intercepted trying to evade the blockade, Tehran remains defiant and Israel’s defense minister said his county is poised to resume the war. Not exactly market friendly headlines! In other news, initial jobless claims rose slightly when reported Thursday morning but remain at low levels. PMI data for both Services and Manufacturing was also stronger than expected. Corporate earnings announced today were somewhat mixed, but it was news from the Middle East that again stole the show.

     We will be getting University of Michigan Sentiment Index data Friday morning. That may give the markets some additional insights into future economic activity, but news from the Middle East likely continues as the main market driver.