Markets have already priced in every possible outcome of the Iran conflict, from worst-case scenarios to rosy endings. Risk assets have weakened since February 28, though they jumped Monday following reports of "very good and productive conversations" between US and Iranian officials. The author argues that risks are asymmetric - if the Strait of Hormuz remains blocked, equity drops would be smaller than potential gains from its reopening.

ETF activity has reached record levels, accounting for nearly half of all US trades according to Bloomberg data. This surge has created one of the biggest short positions in US stocks ever, with Citadel Securities suggesting many transactions came from rules-based algorithms. Despite geopolitical tensions, retail investors continue buying on dips while professional investors reduce exposure through ETFs rather than outright share sales.

Positive stories have been overshadowed by Middle East coverage, including Jensen Huang's claim that Nvidia's OpenClaw technology is "as big a deal" as the internet. Meanwhile, Wall Street expects 13% earnings growth for Q1, and US consumers keep spending despite economic uncertainty. The author suggests UK gilts at nearly 5% yields offer attractive opportunities, particularly given Britain's strong performance on IMF criteria for government borrowing capacity.