Hard to imagine a deal given far-apart red lines. Recommends caution and rebalancing, not putting all money to work.

We've seen this for weeks where even mention of ceasefire perks up optimism, but fundamentals don't support it.

For sustained period, we'd worry. High oil weighs on economy. Also means talks going nowhere, stalemate continues, so more concern about things turning south.

Sectors most affected: industrials, retail. Tech and service-oriented areas with resilient supply chains show solid earnings. Sees resilience in earnings moving forward.

Bloomberg consensus is $325/share, richer than our $300 estimate.

Financials trade: economy growing, even if Fed doesn't cut, sees more upside on long end of yield curve. If yields go up, banks get more for loans. Multiples attractive.

Short-term: Fed will eventually cut as economy slows from oil friction, inflation comes down. Long-term: very volatile, many drivers. 10-year inflation swaps closing gap shows investors worried about prolonged conflict, oil at $80-$85 not $60. Budget issues and war costs add to upside volatility in yields. Want to avoid long end.

If you're invested in long-end yields and they go up, it hurts return more due to duration.

Wouldn't put upper limit now. 4.75% maybe, but depends how we get there. If due to inflation and oil at $150, could see even lower bond returns. Reserve judgment, stick with unfavorable on long end.