Stocks, bonds retreat after Trump says Iran MOU 'is over'

LONDON/NEW YORK, July 8 (Reuters) - Oil surged and stocks and bonds dropped connected Wednesday, aft U.S. President Donald Trump said the memorandum of knowing that had provided a model for the ceasefire with Iran "was over" aft the 2 sides traded attacks overnight.

Trump spoke successful Ankara astatine a NATO acme successful the Turkish capital. Oil prices roseate 5% to $78 a tube and European stocks dropped 1.1%, portion the dollar jumped and authorities enslaved yields rose. U.S. stocks were modestly lower, with the Nasdaq down 0.6%.

COMMENTS:

BRUCE ZARO, MANAGING DIRECTOR, GRANITE WEALTH MANAGEMENT, ‌PLYMOUTH, MASSACHUSETTS:

"What is absorbing to maine is the enactment of lipid prices. Oil prices person been connected a downward trend... With OPEC coming successful and adding much lipid to the market, the imaginable for lipid is to spell little and that truly takes 1 of the biggest worries ‌off the table... When I perceive that the ceasefire is off, I deliberation it's a much muted absorption than the marketplace would person enactment connected than adjacent conscionable possibly 4 weeks ago, six weeks ago, 8 weeks ago."

ANGELO KOURKAFAS, SENIOR GLOBAL STRATEGIST, INVESTMENT STRATEGY, EDWARD JONES, ST. LOUIS, MISSOURI:

"The spike successful lipid prices and higher enslaved yields helped thrust a adjacent 10% correction successful the archetypal fractional ​of the year, but they besides underscored the economy's resilience to these shocks. Renewed geopolitical risks whitethorn substance immoderate near-term risk-off sentiment, but we bash not expect investors to respond to this circular of uncertainty successful the aforesaid way, for respective reasons.

"First, neither the U.S. nor Iran appears inclined toward a prolonged conflict, successful our view, and investors person already seen however reacting to fast-moving headlines tin pb to suboptimal portfolio outcomes. Second, we deliberation it would apt instrumentality a overmuch larger and sustained emergence successful lipid prices to materially change the outlook for the system and firm earnings. Finally, lipid supplies person begun to recover, providing a renewed buffer for vigor markets, portion the improving labour marketplace helps enactment household incomes—even arsenic the tailwind from higher taxation refunds fades."

IAN LYNGEN, HEAD OF U.S. RATES STRATEGY, BMO CAPITAL MARKETS, NEW YORK:

"In applicable terms, the imaginable reset connected the warfare successful Iran implies that the near-term economical information is little applicable – astatine slightest connected the margin. June's halfway ostentation figures volition beryllium downplayed successful the ‌event that crude lipid continues to march higher passim the period of July. What had been a downward power ⁠on header ostentation (and imaginable pass-through to core) appears to beryllium reverting to an upside risk.