Frames the market's dilemma as a tipping point between a temporary price shock and a more damaging valuation shock. Defines a price shock as rising oil prices leading to higher interest rates, which discounts future cash flows and lowers present asset values.

He states this is a normal, temporary reaction that can go away over time.

States his current view is that we are in a price shock, requiring adjustment to higher oil and rising rates.

Highlights a significant market signal: the first steepening of the curve where two-year yields fall and ten-year yields rise, suggesting the market is starting to 'tiptoe' into thinking about a valuation shock (a longer-lasting downturn). He clarifies this is not yet his own view.

Confirms he would fade the move toward pricing a valuation shock at this moment due to lack of clear information.

Reasoning: Strong pre-war economic data makes it hard to blow the US/global economy off course, though growth can be interrupted. We are in a waiting game to assess damage from oil shortages and higher prices, which will delay the reignition of growth.

Attributes part of Friday's sell-off to technical, weekend risk reduction, expecting a rebound on Monday if the status quo holds.

Advises viewing today's downdraft with a grain of salt, expecting prices to bounce around. Introduces the concept of 'negotiated escalation' between the US and Iran as a hard-to-process military tactic that precedes a ceasefire, contributing to market uncertainty.