The Morning Call: seven myths about the war in Iran

 

The Morning Call

 

4/16/26

 

The Market

         

    Technical

 

            Wednesday in the charts.

            https://www.zerohedge.com/markets/tax-day-triggers-stocks-oil-vix-bears-get-bird

 

Summary: Markets charge to new all-time highs (but big divergence between NDX and INDU) as optimism of a conclusion to the war persists. 'Spot Up, VIX Up' signals a major (panic) chase is on as equities decouple from oil and bonds continue to underperform. The dollar dipped modestly, gold also down, while bitcoin was flat.

 

            Wednesday in the technical stats.

            https://www.barchart.com/stocks/momentum

            https://www.barchart.com/stocks/market-performance

            https://www.barchart.com/stocks/sectors/rankings

            https://www.barchart.com/stocks/signals/new-recommendations

 

            Four reasons the lows are likely in.

            https://www.carsongroup.com/insights/blog/four-reasons-the-lows-are-likely-in/

 

                Wall of capital waits on the sidelines.

            https://www.zerohedge.com/the-market-ear/wall-capital-waits-sidelines

 

Summary: This is not a short-term market call, but a broader observation. There is an enormous amount of dry powder sidelined. Record money market balances, muted equity positioning, and large private market reserves point to a system flush with liquidity, yet hesitant to deploy it aggressively—at least for now.

 

                Hedge funds panic.

            https://www.zerohedge.com/markets/hedge-funds-panic-they-badly-lag-market-surge

 

Summary: the ratio of hedge fund longs to shorts is below the peak Liberation Day panic, while stocks are back to record highs. This means that hedge funds are now scrambling and chasing stocks in an almost blind panic, which explains why yesterday saw the biggest call volumes of 2026. 

 

                        Time to fade the rally.

            https://www.zerohedge.com/markets/time-fade-rally-goldman-lists-6-trades-hedge-while-you-still-can

 

Summary: With risk assets back at record new highs, Goldman trader Tom Shea thinks the market has moved too far, too fast and is providing a good entry point for cross-asset hedges for 2 different shock scenarios:

1.         Re-escalation in geopolitical tensions causes a renewed selloff – for this risk shock a) buy SPY put spreads, b) own CDX IG protection, c) short HY cash (rate hedged to isolate for spreads), and d) buy front-end receiver spreads.

2.         De-escalation continues, but investor concerns turn to growth weakness & higher inflation – for this risk shock a) buy GBPUSD binary puts, or b) buy upside on the BCOM grains index.

 

What could go wrong?

https://www.zerohedge.com/the-market-ear/997-melt-meets-12-stock-breadth-collapse-what-could-go-wrong

 

Summary: The market just printed a 99.7th percentile melt-up, historically a green light for bulls. But here’s the problem: only a handful of stocks are actually driving the move.

 

Gold consolidates.

            https://talkmarkets.com/article/gold-consolidates-losses-as-traders-weigh-fed-outlook-and-us-iran-talks-hopes-1776273219

 

Thursday morning setup: Stock futures are edging higher on continued optimism about an extended truce in the Middle East, while Taiwan Semi's solid results have sparked another leg higher in AI trade. As of 8:15 am ET, S&P 500 futures rose 0.1%, while Nasdaq 100 contracts +0.2%, and on pace for a 12th day of gains. The early hours of the session saw a sharp rally in technology stocks after TSMC's upbeat revenue outlook highlighted the resilience of AI chip demand. In premarket trading, Mag 7 stocks were mostly higher led by MSFT +1.8% and TSLA +1.3%.  On geopolitical headlines, the White House remains optimistic on the second round of talk (key Pakistani negotiator visits Tehran); Israel’s security cabinet met to discuss a possible ceasefire. Bond yields are 0-2bp lower with a modest gain in the dollar. Brent rose toward $96 a barrel as movements through the Strait of Hormuz remained all but paralyzed. Bonds rose, led by gains in Europe where central bank policymakers signaled they’re in no rush to raise interest rates. The dollar snapped an eight-day losing streak while gold rose above $4,800 an ounce. April’s strong stock rebound is being driven by a new kind of FOMO, according to Ed Yardeni, with Goldman saying that "despite the sharp market rebound, positioning has not fully caught up."  Still, while equities are “definitely pricing” the end of the war, we are “not there yet,” cautioned HSBC’s Patrick George while the IMF and World Bank are also worried that markets are underestimating the war’s economic damage. Today's US economic data calendar includes April New York Fed services business activity, Philadelphia Fed business outlook, weekly jobless claims (8:30am) and March industrial production (9:15am). Fed speaker slate includes Williams (8:35am) and Miran (10:35am)

 

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

Weekly initial jobless claims totaled 207,000 versus expectations of 215,000.

 

The April housing market index was reported at 34 versus consensus of 37.

 

The April Philadelphia Fed manufacturing index was 26.7 versus projections of 10.3.

                         

                        International

 

Q1 Chinese GDP grew 1.3%, in line; Q1 YoY industrial production was up 5.7% versus +5.5%; Q1 YoY retail sales were up 1.7% versus +2.3%; Q1 YoY fixed asset investment rose 1.7% versus +1.9%.

 

February UK GDP increased 0.5% versus estimates of +0.1%; the February trade balance was -L18.8 billion versus -L20.2 billion; February industrial production was up 0.5% versus +0.2%; February YoY construction output fell 1.0% versus -0.5%.

 

March EU CPI came in at 1.3% versus predictions of 1.2%.

 

                        Other

 

                           Update on GDP nowcasts.

                           https://econbrowser.com/archives/2026/04/gdp-projections-one-of-these-is-not-like-the-others

 

                          Against all odds.

                          https://www.capitalspectator.com/against-the-odds-us-is-relatively-resilient-despite-global-turmoil/

                       

                          The petrodollar theory is dead.

                          https://mishtalk.com/economics/petrodollar-nonsense-yet-again-this-time-in-two-opposing-directions/

 

                                  The US is at risk of an oil shock too.

                          https://giftarticle.ft.com/giftarticle/actions/redeem/eebe10d2-8661-4710-945a-0fa52c15694b

 

                                  Glass more than half full.

                          The Champagne Glass Is More Than Half Full

 

                         

            Iran

 

              Overnight News:

   https://www.zerohedge.com/geopolitical/hegseth-vows-hormuz-blockade-continue-long-it-takes-ships-now-subject-search-outright

 

              Seven myths about the war with Iran.

              https://www.tabletmag.com/sections/news/articles/seven-myths-iran-war-michael-doran

 

            Monetary Policy                    

 

              Latest Fed Beige Book confirms economic uncertainty.

              https://www.zerohedge.com/markets/beige-book-confirms-uncertainty-fuel-costs-surged-iran-war-economy-grew-slight-modest-pace

 

            The Financial System

 

More on the significant differences between the private credit market today and   the securitized debt market in the great financial crisis.

https://talkmarkets.com/article/will-private-credit-cause-the-next-financial-crisis-1776246125

 

     Investing

 

    News on Stocks in Our Portfolios

 

 

 

What I am reading today

 

            The myth that won’t die: war is good for the economy.

            (3) The Myth that Won’t Die: “War is Good for the Economy”

 

 

Visit Investing for Survival’s website (http://investingforsurvival.com/home) to learn more about our Investment Strategy, Prices Disciplines and Subscriber Service.

 

 

 

The Morning Call---Not your grandfather's stagflation

 

The Morning Call

 

4/15/26

 

The Market

         

    Technical

 

            Tuesday in the charts.

            https://www.zerohedge.com/markets/mission-accomplished-sp-tops-7k-retraces-all-iran-losses-bonds-bitcoin-bullion-all-bid

 

Summary: For stocks, it's a 'mission accomplished' moment as the S&P joins NDX and RTY in the green from pre-war (as tech laggards lead the charge). Optimistic tones from both US and Iran pushed stocks up, bond yields down (along with oil prices), and the dollar down. Gold and crypto also rallied bigly as central bank expectations drifted dovishly. As one very senior equity trader said: "Flows remain one-way... CTAs, clients, everyone is under-risked and chasing."

 

Note: the Market continues its relentless drive to the upside. Obviously, I was wrong about closing the huge gap up open---at least in the short term. Just to rub it in, the S&P executed a second gap up open yesterday. So, it would appear that the current situation is the exception to the rule. Having been wrong, I don’t want to compound it by panicking into the stocks on my Buy List. So, I am still going to wait for a correction to define support and give me an entry point.

 

            Tuesday in the technical stats.

            https://www.barchart.com/stocks/momentum

            https://www.barchart.com/stocks/market-performance

            https://www.barchart.com/stocks/sectors/rankings

            https://www.barchart.com/stocks/signals/new-recommendations

 

A thought on the rally: “Momentum-driven traders are too loath to miss out on a rally to worry about what is driving it,” Steve Sosnick, the chief strategist at Interactive Brokers, told Bloomberg.

 

            Market performance after a seven day winning streak.

            https://www.bespokepremium.com/interactive/posts/think-big-blog/one-streak-ends-others-make-history

           

            Buy stocks when the VIX is over 30.

            https://giftarticle.ft.com/giftarticle/actions/redeem/f1260576-7051-4a40-bfa6-056290a89530

 

            CTAs unleash buying spree.

            https://www.zerohedge.com/markets/largest-forecast-over-decade-ctas-unleash-historic-buying-spree

 

Summary: the bank now estimates CTAs will buy $83.5bn of global equities over 1 week in a flat tape, of which $43bn is US Equities, "this is a +4 standard deviations move", Armbrust exclaims. For Goldman, "these are the largest flow forecasts observed in the model over the past 10 years."

 

            The latest from Goldman.

            https://www.zerohedge.com/markets/market-braces-big-gamma-unclench-goldman-says-get-long-pullbacks-add-protection-days

 

Summary: VIX expiration tomorrow (4/15) through OPEX (4/17) to clear short VIX/vol bets, and remove positive gamma. This should allow for markets to have more volatility... Throwing everything into the blender, here’s my market view:...the primary bull trend remains intact......yet, the core growth / inflation tradeoff has worsened, and growth should slow in the second half. I think this all reaffirms my recent point on the tactics of near-term execution: build longs on sharp pullbacks / add protection on days like today.

 

The chase will hurt.

https://www.zerohedge.com/the-market-ear/squeeze-paid-chase-will-hurt

 

Summary:  The squeeze has done its job, now it’s starting to pull people back in. Positioning has flipped, volatility has reset, and equities are back pressing key levels. What was a clean, one-way setup is turning into something more dangerous - flows still support, but signals are starting to stretch. From here, it’s less about direction, and more about not getting trapped chasing it.

 

 

Wednesday morning setup: US equity futures are flat following yesterday’s rally as market awaits news on the Iran war resolution and as we traverse earnings season. As of 8:15am ET, S&P 500 futures are little changed after the benchmark closed within a whisker of a record. Risk sentiment took a small knock in recent trade after Iran cautioned that it will not allow shipments to or from the Gulf if the US blockade remain. Nasdaq futures are fractionally in the green, and set for an 11th consecutive gain as the massive short squeeze/CTA forced buying continues: in premarket trading, Mag7 / Semis are mixed, Discretionary and Staples are both stronger, Fins / Indu are leading Cyclicals with weakness in Materials. Bank of America and Morgan Stanley rose in premarket trading as their equity traders posted strong revenue beats. Europe’s Stoxx 600 traded flat, while China’s mainland blue-chip index became the latest in Asia to recoup losses since the Iranian war began. Brent erased early losses to rise 1% toward $96 a barrel as the US pressed ahead with a naval blockade of the Strait of Hormuz. Treasuries edged lower, with the two-year yield rising one basis point to 3.76% and the 10Y rising 2bps to 4.27%. The dollar is slightly stronger which would break a 7 session losing streak if gains hold while gold fell toward $4,800 an ounce. Other commodities are mixed with Ags, Base metals, and the Energy complex ex-natgas bid. Today’s macro data focus is on Beige Book, TIC data (keep an eye on buys/sells of Trsys), Housing prices, Empire Mfg, and Import/Export prices.

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

Weekly mortgage applications rose 1.5% while purchase applications were down 1.0%.

 

Month to date retail chain store sales were up 7.0% versus +7.6% in the prior week.

 

The April NY Fed manufacturing index came in at 11.0 versus forecasts of -0.5.

 

                        International

 

February Japanese machine tool orders were up 3.6% versus predictions of -1.1%.

 

February EU industrial production grew 0.4% versus estimates of +0.3%.

 

                        Other

 

            Iran

 

  Overnight news: Effort to extend US-Iran ceasefire has made progress, AP reports   citing official; mediators aim to extend the ceasefire for at least another two weeks; both sides gave an “in principle agreement” to extend the ceasefire.

 

The Pentagon is sending thousands of additional troops into the Middle East in the coming days, WaPo reports citing US officials; in a bid to pressure Iran while mulling the possibility of additional strikes or ground operations if the ceasefire breaks.

 

US Central Command said blockade of Iranian ports has been fully implemented and that US forces have completely halted economic trade going into and out of Iran by sea.

 

US has intercepted eight Iran-linked oil tankers since the start of the blockade.

 

New satellite images show Iran digging for missile launchers trapped underground amid a ceasefire.

 

More than 20 commercial ships have passed through the Strait of Hormuz in the past 24 hours.

 

The blockade from Iran’s point of view. I have read dozens and dozens of articles on the economics of the closing of the Strait of Hormuz and I have seen nothing that confirms the math of the author with respect to Iran’s oil revenues since the war began. That doesn’t mean the author is wrong; but no one else seems to be singing his song. So I have to question his accuracy.

https://www.bloomberg.com/opinion/articles/2026-04-14/the-hormuz-blockade-is-as-much-about-china-as-iran?utm_source=website&utm_medium=share&utm_campaign=copy

 

            Fiscal Policy

 

              The only way to stop the growth of government spending is to cut taxes.

              https://www.realclearmarkets.com/articles/2026/04/14/neither_balanced_budgets_nor_starve_the_beast_will_limit_government_1175867.html

 

              Yet another big monthly deficit.

              https://talkmarkets.com/article/us-government-spending-addiction-drives-yet-another-big-monthly-deficit-1776186765

 

            Inflation

 

              Everyday prices jump.

              https://econbrowser.com/archives/2026/04/everyday-prices-jump

 

              Not your grandfather’s stagflation.

              (3) Not Your Grandfather’s Stagflation - by Quoth the Raven

 

            Recession

 

              Unemployment claims as a recession indicator.

              https://www.advisorperspectives.com/dshort/updates/2026/04/14/unemployment-claims-and-the-clf-as-a-recession-indicator-march-2026

           

            Affordability

 

              New home affordability in February best in four years.

              https://politicalcalculations.blogspot.com/2026/04/new-homes-sold-in-february-2026-are.html

           

              Where did all the affordable cars go?

              https://econbrowser.com/archives/2026/04/clifford-winston-on-where-did-all-the-affordable-cars-go

 

            The Financial System

 

              Private credit has calmed the credit cycle.

              https://giftarticle.ft.com/giftarticle/actions/redeem/34307f76-2c4b-4216-8794-1583d71b3b7d

 

     Investing

 

            Diversification is the only free lunch in investing.

            https://alhambrapartners.com/weekly-market-pulse-the-only-free-lunch-in-investing/?src=news

 

            The basics of building wealth.

            https://dariusforoux.com/the-basics-of-building-wealth/

 

            Risky debt outshines Treasuries.

            https://www.capitalspectator.com/in-wartime-markets-risky-debt-outshines-treasuries/

 

            What do you believe about investing?

            https://behaviouralinvestment.com/2026/04/14/what-are-your-investment-beliefs-2/

 

            Are you an analyst or an investor?

            https://microcapclub.com/are-you-an-analyst-or-an-investor/

 

    News on Stocks in Our Portfolios

 

 

 

What I am reading today

 

           

 

 

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The Morning Call---the rapidly changing conflict

 

The Morning Call

 

4/14/26

 

The Market

         

    Technical

 

            Monday in the charts.

                https://www.zerohedge.com/markets/deal-or-no-deal-risk-roller-coasters-deal-hope-trumps-hormuz-dead-end

 

Summary: Another week begins where buying Sunday's opening dip and selling the Monday open was wildly profitable. 34 ships thru SoH and 'talks ongoing' >> End of peace talks + Hormuz blockade with every asset retracing the kneejerk moves overnight. Stocks were the big 'outperformers' as they seem more confident than oil and gold that this ends well. Bond yields and the dollar tumbled all day, bitcoin bid.

 

            Monday in the technical stats.

            https://www.barchart.com/stocks/momentum

            https://www.barchart.com/stocks/market-performance

            https://www.barchart.com/stocks/sectors/rankings

            https://www.barchart.com/stocks/signals/new-recommendations

 

            What is behind the melt up?

            https://www.zerohedge.com/markets/whats-behind-meltup-complete-hedge-fund-institutional-and-retail-flow-and-positiong

 

Summary: Looking ahead, Goldman writes that sentiment remains fragile and outside of the expected mechanical buying from systematic players, hedge covering and very selective re-risking, investors remain frozen in anticipation of the next Iran/Hormuz headlines with quasi-symmetrical risks of reescalation vs deescalation, arguing for choppiness ahead.

 

            The tape says one thing, the headlines another.

            https://talkmarkets.com/article/the-tape-says-one-thing-headlines-say-another-1776100385

           

Tuesday morning setup: US equity futures, and global stocks rise while oil slides on a Reuters report that negotiating teams from the US and Iran could return to Pakistan later this week to resume negotiations to end the war in the Gulf, days after the first peace talks ended without a breakthrough, with chatter from Pakistani media that Trump is said to be in attendance. As of 8:00am ET,  S&P 500 futures are up 0.2% while Nasdaq 100 contracts add 0.4%, as the cash index braces for a 10th straight day of gains, its longest streak of gains since 2021, with all Mag 7 stocks higher in premarket trading (Alphabet +0.9%, Amazon +0.7%, Apple +0.2%, Nvidia +0.6%, Meta Platforms +1.2%, Microsoft +1.1%, Tesla +1.9%) as tech / semis outperform other sectors; Cyclicals ex-Energy are leading Defensives. The risk-on rally is poised to continue today with the dollar weaker for a 7th day in a row while Treasuries were little changed. Gold rose 0.7% toward $4,800 an ounce. Bitcoin hit a four-week high. Brent fell 0.4% to below $99 a barrel, with the International Energy Agency estimating that the war will wipe out global oil demand growth for the first time since the 2020 pandemic, selling was boosted by Iran de-escalation hopes; Ags remain bid and precious metals continue to move inversely to the Dollar. Today’s macro data focus is on weekly ADP, Small Biz Survey, and PPI. Headline PPI (YoY expected to increase from 3.4% to 4.6%) is expected to see a significant jump with Core PPI (YoY expected to increase from 3.5% to 3.8%) increases more muted. Big banks report Q1 earnings today with consumer health the key macro read-through.

 

    Fundamental

 

 

Headlines

 

              The Economy

 

                        US

 

                          March existing home sales fell 3.6% versus consensus of down 2.0%.

                          https://www.advisorperspectives.com/dshort/updates/2026/04/13/existing-home-sales-remained-sluggish-in-march

 

March PPI rose 0.3% versus projections of 1.1%; core PPI was up 0.1% versus +0.5%.

                                                  https://www.zerohedge.com/markets/us-producer-prices-cooler-expected-march-despite-surge-energy-costs

 

The March small business optimism index came in at 95.8   versus estimates of 98.6.

 

                        International

 

February Japanese industrial production declined 2.0% versus projections of -2.1%; capacity utilization was down 0.1% versus +1.0%.

 

The March Chinese trade balance was $51.1 billion versus forecasts of $112.0 billion.

 

March German CPI rose 2.7% versus expectations of +0.4%.

 

                        Other

 

                          The world’s anti-recession guardrails are weaker than ever.

  https://www.bloomberg.com/news/features/2026-04-12/imf-world-bank-to-meet-in-dc-this-week-as-iran-shock-looms?utm_source=website&utm_medium=share&utm_campaign=copy

 

            Iran

 

              The latest in the rapidly changing conflict.

              https://www.zerohedge.com/geopolitical/iran-mulls-hormuz-shipping-pause-preserve-talks-avoid-trump-blockade-showdown-us

 

              Chinese tanker tests Trump’s blockade.

                          https://www.zerohedge.com/markets/us-sanctioned-tanker-signaling-chinese-ownerships-tests-trump-blockade-hormuz-crossing

 

              Oil shock is now fully playing out.

              https://www.zerohedge.com/commodities/stocks-are-ignoring-it-jpmorgan-warns-oil-shock-now-fully-playing-out

 

Summary: As JPM concludes, today’s much wider gap signals a market struggling to source barrels for delivery now, even if it still assumes supply will normalize later. In that sense, the strength in Dated Brent is the market’s way of signaling that time has become a scarce commodity. 

 

              The danger that the Strait of Hormuz will not soon reopen.

              https://www.zerohedge.com/energy/strait-hormuz-crisis-exposes-fatal-flaw-economic-thinking

 

              An optimist’s view of the current situation.

              https://www.zerohedge.com/geopolitical/how-irans-mosaic-doctrine-fracturing

 

            Monetary Policy

 

              An impossible choice for the Fed.

              An Impossible Choice For the Fed? - Carson Group

 

            Recession

 

              The surge in oil prices could be the straw that breaks the camel’s back.

              https://bonddad.blogspot.com/2026/04/the-big-picture-overview-of-economy-oil.html

 

            The Financial System

 

              The credit cycle has not been repealed.

              https://www.realclearmarkets.com/articles/2026/04/13/with_private_credit_we_see_the_credit_cycle_hasnt_been_repealed_1175984.html

 

     Investing

 

            Take this simple step as you approach retirement.

            https://www.morningstar.com/retirement/take-this-simple-step-runup-retirement

 

            Ten wide moat stocks trading at discounts to their fair value.

            https://www.morningstar.com/stocks/10-wide-moat-stocks-trading-attractive-discounts-their-fair-values

 

            Bond yields are too low for what is coming.

                        https://wolfstreet.com/2026/04/11/us-government-sold-620-billion-of-treasury-securities-this-week-10-year-yield-ends-at-4-31-30-year-yield-at-4-91/

           

Iran war may raise ten year Treasury’s risk premium.

            https://www.capitalspectator.com/iran-war-may-widen-10-year-yields-market-premium-vs-fair-value/

 

            Q1 earnings season to gain momentum.

            https://talkmarkets.com/article/q1-earnings-season-to-gain-momentum-what-will-it-show-1775891992

 

            New dawn for short sellers?

            https://giftarticle.ft.com/giftarticle/actions/redeem/9d798d20-a585-427b-8790-68dbca70ba29

 

            What will AI do to discount rates?

            https://www.permanentequity.com/unqualified-opinions-roll/ai-and-discount-rates

 

    News on Stocks in Our Portfolios

 

 

 

What I am reading today

 

            The ‘annoyance economy’.

            https://www.nytimes.com/2026/04/12/business/annoyance-economy-costs.html?unlocked_article_code=1.alA.v4Tp.YJIp0QgmzIpL&smid=url-share

 

                       

                        Artemis II photos.

            https://www.popsci.com/science/artemis-ii-photos/

 

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