The Morning Call---Iran---the aftermath

 

The Morning Call

 

4/7/26

 

The Market

         

    Technical

 

            Monday in the charts.

            https://www.zerohedge.com/markets/bitcoin-bid-most-markets-meander-ahead-trumps-iran-deadline

 

Summary:  With Europe still out for the loooong weekend, markets were less liquid, a little jittery, but the bottom line is that stocks, bonds, and oil ended very modestly better amid a literal avalanche of increasing and decreasing rhetoric (and actions) with traders anxious ahead of Trump's deadline tomorrow (and a stagflation-signaling Service sector survey - prices soaring, orders up, jobs falling). Gold and the dollar were flat while BTC stood out as the only asset with significant gains.

 

Note: the S&P pushed above that very short term downtrend marked by the succession of lower highs---although it was on very low volume. Nonetheless, if it closes above that trend today, the downtrend will be negated. On the other hand, the index remains below its 200 DMA---a stronger resistance level. What is needed now is follow through before getting too jiggy.

 

            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

 

            Buy or fade this rally?

            https://talkmarkets.com/article/the-stock-market-rally-buy-or-fade-it-1775470936

 

            Retail skipping the dips, selling the rallies.

            https://www.zerohedge.com/markets/skipping-dips-selling-rallies-retail-selling-stocks-alarming-pace

 

Summary: According to the latest JPMorgan retail radar note (available here), total purchases in March finished nearly 50% below the levels seen in the record January. Through last Tuesday, retail investors continued to post moderate inflows into ETFs while net selling single stocks, even as markets rebounded. On Wednesday, as market strength persisted, retail flows - while healthy (76.6%ile, driven by ETFs at 96.4%ile) - continued to signal caution: ETF inflows were strong, but in reality the incremental buying that took place skewed toward Fixed Income ETFs (98%ile, driven by SGOV, 5.5z), rather than “risk-on” exposures.

 

            The technical picture on gold.

            https://talkmarkets.com/article/gold-price-forecast-xauusd-around-4660-bears-sharpening-their-claws-1775498056

 

            France yanks the last of its US based gold reserves.

            https://www.zerohedge.com/precious-metals/france-yanks-last-us-based-gold-reserves-ubs-expects-demand-china-persist

 

Tuesday morning setup: US futures reversed earlier gains and oil advanced following reports that Iran's Kharg island was targeted earlier on Tuesday, while the market was largely paralyzed ahead of Trump’s 8pm ET deadline for Iran to agree to a ceasefire or face escalation. As of 8:00am ET, S&P futures are down 0.4%, and Nasdaq futures slide 0.6%. In premarket trading, all Mag7 names are lower even as AVGO (+3% pre-mkt) is bid after a TPU supply pact with GOOGL (+55bps) while ASML (-80bps) is weaker following a proposed US law that would further curb semiconductor exports to China (targeting ASML’s deep ultraviolet lithography machine). Managed care is well bid after the final Medicare Advantage rate of +2.48% (vs ~1% bogey) was released last night (HUM +9%, CVS +7%, UNH +6%, ALHC +11%). Bond yields rise 1bp, 10Y TSY yield at 4.34%, the USD is also higher while commodities are mixed with oil reversing earlier losses and rising over 2%. Today’s macro data focus is weekly ADP, Durable / Cap Goods, and NY Fed 1-year Inflation Expectations. Ultimately, expect weaker volumes today with some market swings on unconfirmed ceasefire / deal chatter.

 

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

                         

  February durable goods orders fell 1.4% versus projections of down 0.5%; ex transportation, they were up 0.8% versus +0.5%.

 

                          The March ISM services index came in at 54.0 versus consensus of 55.0.

                          https://www.advisorperspectives.com/dshort/updates/2026/04/06/ism-services-pmi-march-2026

 

                        International

 

February Japanese household spending rose 1.5% versus expectations of up 2.5%; the February leading economic indicators were reported at 112.4 versus 112.3.

 

The March German services PMI was 50.9 versus estimates of 51.2; the composite PMI was 51.9, in line; the March EU services PMI was 50.2 versus 50.1; the composite PMI was 50.7 versus 50.5; the March UK services PMI was 50.5 versus 51.2; the composite PMI was 50.3 versus 51.0.

 

                        Other

 

                          The only economy is the world economy.

                          https://www.forbes.com/sites/johntamny/2026/04/05/the-strait-of-hormuz-couldnt-care-less-about-the-federal-reserve/

 

            Overnight News

 

Negotiators are pessimistic Iran will bend to meet President Trump’s demand to reopen the Strait of Hormuz before his Tuesday-night deadline, paving the way for the U.S. to target Iranian bridges and power plants in a fresh escalation of the war. Twice in his second term, Trump set a deadline for a deal with Iran, said he would bomb the country if its leaders didn’t comply, then followed through with military operations.

 

Airstrikes pounded Tehran on Tuesday, and Iranian officials urged young people to form human chains to protect power plants, hours before the expiration of U.S. President Donald Trump’s latest deadline for the Islamic Republic to reopen the crucial Strait of Hormuz or face punishing strikes on its infrastructure.

 

 

            Iran---the aftermath

 

               More pessimism on how the war ends.

              https://danieldrezner.substack.com/p/the-strategic-defeat-of-the-united

 

              A perfect storm for the petrodollar.

              https://www.dbresearch.com/PROD/IE-PROD/PDFVIEWER.calias?pdfViewerPdfUrl=PROD0000000000622186

 

              Shattered assumptions and the energy quandary.

             https://research.gavekal.com/documents/12764/Shattered_Assumptions_And_The_Energy_Quandary.pdf

 

              Oil shocks and recessionary outcomes.

              https://www.advisorperspectives.com/commentaries/2026/04/06/oil-shocks-recessionary

 

              Running on empty.

              https://www.realclearmarkets.com/articles/2026/04/06/its_a_jackson_browne_economy_running_on_empty_11fis74844.html

 

              Prolonged stress lurks.

              https://www.capitalspectator.com/prolonged-stress-test-lurks-for-global-markets-as-war-continues/

           

              The cascading effect,

              https://theomission26.substack.com/p/assessment-011-the-cascade

 

            Fiscal Policy

 

              The debt spiral ends in dollar destruction.

              https://www.zerohedge.com/political/debt-spiral-ends-dollar-destruction-6-hard-truths-america-can-no-longer-ignore

 

Inflation

 

              Five year inflation expectations.

              https://econbrowser.com/archives/2026/04/daily-data-on-5-year-inflation-expectations

 

              The ‘real’ wage adjusted price of gasoline hasn’t hit deprivation yet.

              https://bonddad.blogspot.com/2026/04/the-real-wage-adjusted-price-of-gas.html

 

            The Financial System

 

              Another private credit firm caps redemptions.

              Another Day, Another Private Credit Fund Takes A Shit

 

Summary: Asset manager Barings capped redemptions at one of its private credit funds at 5% of shares after investors sought to withdraw 11.3% in the first quarter, according to a regulatory filing on Monday.

 

Jamie Dimon says that private credit losses will be even greater than many feared.

https://www.ft.com/content/58df968f-de4d-4a00-87b6-0b790057f9d3?syn-25a6b1a6=1

 

                          US Treasury calls in insurance regulators over private credit concerns.

              https://www.ft.com/content/09f4fa70-d3e6-4abc-bc95-234afe7111f4?syn-25a6b1a6=1

 

            Tariffs

 

              Trump’s other tariff.

  https://thedispatch.com/newsletter/capitolism/trump-visa-fee-tariff-skilled-labor/?utm_source=iterable&utm_medium=newsletter&utm_campaign=capitolism&utm_content=114244

 

 

     Investing

 

            Misreading the tea leaves.

            https://www.carlyle.com/carlyle-compass/misreading-the-tea-leaves

 

            What inflation does to stock market performance.

             https://traderfeed.blogspot.com/2026/04/what-inflation-does-to-stock-market.html

           

            Bond market gets nervous about rising inflation.

                        https://wolfstreet.com/2026/04/04/bond-market-gets-nervous-about-rising-inflation-ballooning-debt-sees-rate-hike-mortgage-rates-jump-to-6-46/

 

            The dollar is losing its grip.

            https://talkmarkets.com/article/the-dollars-grip-is-loosening-what-comes-next-1775214726

 

    News on Stocks in Our Portfolios

 

 

 

What I am reading today

 

           

 

 

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

 

 

 

Monday Morning Chartology

 

The Morning Call

 

4/6/26

 

 

The Market

         

    Technical

 

Talk about being right on the edge. The S&P closed (right on the downtrend line of lower highs) and right on the closing price of the last lower high. In addition, the prior Friday’s gap down open has been filled, so no upward pull from that factor. Today’s pin action will be enlightening; but I not doing anything until I know how stocks close---and if they finish lower, I am still not doing anything. Meanwhile, I am making my list and checking it twice.

 

                        Bottoms come when everything looks terrible.

            https://www.zerohedge.com/the-market-ear/markets-dont-wait-why-bottom-comes-when-everything-still-looks-terrible

 

 

 

 

 

TLT managed to bounce off the lower boundary of its very short term trading range and hold. Nonetheless, it remains below all DMAs and in downtrends across all major timeframes. With oil six feet high and rising and the increasing likelihood of a stagflation economic environment, I am hard pressed to think that bond prices are going to improve markedly.

 

            Bond market volatility just collapsed.

            https://www.zerohedge.com/the-market-ear/bond-vol-just-collapsed-now-watch-squeeze

 

            Summary: Yields tested 4.4% and failed. At the same time, bond volatility has quietly collapsed, removing a key headwind for risk.

The oil–rates relationship is also starting to crack. Bond vol had been moving almost one-for-one with crude, reinforcing the inflation narrative, but that link is now weakening as MOVE rolls over despite elevated oil levels. Markets spent weeks pricing stress. Now the mechanics are shifting: bond vol is resetting, positioning is light, and key macro relationships are starting to flip. The setup is no longer about downside, it’s about whether this turns into a squeeze.

 

 

 

Gold continues to try and stabilize after that vicious sell off. But it has been too short a time span to have confidence that the worst is over. The good news is that (1) it is attempting to reset its 100 DMA to support [if it remains above it through the close Tuesday, it will reset], (2) it remains in uptrends across all time frames and (3) still has those two gap down opens overhead that need to be filled. I continue to hold a one half trading position in GDX.

 

 

I think it unfortunate that dollar regains some strength on bad news (war, credit crisis) as opposed to good news (strong economy, lower inflation). But that is the scenario we got. Like every other index, its current trend is highly dependent on the length and outcome of the war. Absent that, the macroeconomic backdrop of the US economy (slow growth and rising inflation) suggests a lower dollar.

That said, UUP has reset all three DMA’s to support, negated a short term downtrend, and established a very short term uptrend---which it unsuccessfully challenged last week. I expect it to stay this way at least until the cessation of hostilities.

 

 

 

 

 

            Friday in the charts.

            https://www.zerohedge.com/markets/crude-credit-crypto-crazy-usrael-iran-trade-threats-long-weekend

 

Summary: Tl;dr: The overnight (correlated) panic after Trump's disappointment (oil up, yields up, stocks down) saw the relationships break amid chatter of Hormuz reopenings - with a toll - as hyper-sensitive stocks rebounded (stocks up, yields down, oil meh). The dollar rallied into the long weekend with bitcoin and bullion battered after trump's threats. The market is still trading from tweet-to-tweet (desperate hope) and not counting barrels (desperate nope)... with the first up-week of the war in stocks.

 

                Friday 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

 

Monday morning setup: Yields tested 4.4% and failed. At the same time, bond volatility has quietly collapsed, removing a key headwind for risk. The oil–rates relationship is also starting to crack. Bond vol had been moving almost one-for-one with crude, reinforcing the inflation narrative, but that link is now weakening as MOVE rolls over despite elevated oil levels. Markets spent weeks pricing stress. Now the mechanics are shifting: bond vol is resetting, positioning is light, and key macro relationships are starting to flip. The setup is no longer about downside, it’s about whether this turns into a squeeze.

 

    Fundamental

 

       Headlines

 

              The Economy

 

The US stats were slightly positive last week with one upbeat inflation stat and three primary indicators (all plus). Overseas, the numbers were upbeat, which included two positive and one neutral inflation reading.

 

We still aren’t seeing any economic effects of the Iran war and the turmoil in the private credit market in the data (I know; it is starting to sound like a broken record---but it is going to happen [I think]]). With respect to the dramatic rise in oil prices, it has been four weeks since the war began (and it looks like we have a couple more to go---barring another Trump turnaround); and it takes time for its inflationary impact to work its way into the system. Frankly, I don’t’ see how we escape the fallout from the massive destruction of the Mideast oil production infrastructure. And while we are seeing it real time at the pump, higher oil prices have yet to work their way into the macroeconomic numbers about which the pundit class is busy arguing about the size and duration thereof. Clearly, it will have some effect, but it is way beyond by level of expertise to forecast it magnitude.

 

The private credit problem just keeps getting worse. Before attempting to judge the impact of the present circumstance, we need the answer to two questions: (1) how many of the private sector loans are trash and (2) how large is the exposure of the banking and insurance industries.

 

And speaking of getting worse.

https://www.zerohedge.com/markets/private-credit-bank-run-begins-blue-owl-gates-after-shocking-41-tech-fund-investors-ask

 

However, a new study last week pointed out that (1) while magnitude of the ultimate damage is still an unknown, we do know that private credit has produced no ancillary derivatives securities/markets and (2) during the great financial crisis, derivatives risk was sixfold greater than that of the underlying securities. So whatever the risk today, it is considerably less than it was during that episode. Which eases my concern with regard to the viability of our financial system.

 

Here is the link to that study:

The difference between the current private credit crisis and the GFC.

https://www.zerohedge.com/markets/subprime-crisis-20-will-private-credit-be-trigger

 

So what do we know?

 

(1) we know how the economy responses to war (Vietnam, Iraq, Afghanistan, Ukraine) and despite some initial hiccups, all was well.

 

(2) we now have a solid reason to believe that risks associated with poor lending practices in the private credit market will likely not lead to the kind of financial devastation experienced during the great financial crisis and finally

 

(3) we know that earnings estimates just keep going up [I review the financials of a portion our investment universe weekly and I am struck by how earnings forecasts from the Street keep rising despite the potential inflationary fallout from rising oil prices].

 

So, as you might guess, I am feeling a little more optimistic about the economy. I am not reinstating my ‘muddle through’ scenario, though the odds of it materializing are going up. On the other hand, as you know, I did reaffirm my ‘inflation is as good as its going to get’ forecast. Which means my focus is starting to shift from worries about recession to those of stagflation.

https://www.zerohedge.com/economics/services-sector-contraction-march-screams-q1-stagflation

 

 

 

                        US

 

 

 

                        International

 

                        Other

           

                          More positive news on the employment front.

                              https://bonddad.blogspot.com/2026/04/jobless-claims-continue-near-historic.html

 

                          Update on Q1 GDP nowcast.

                          https://mishtalk.com/economics/gdpnow-forecast-for-first-quarter-gdp-sinks-to-1-9-percent/

 

                          Details on Friday’s blowout nonfarm payrolls report.

                          https://www.zerohedge.com/economics/march-jobs-shocker-payrolls-soar-178k-most-2024-blowing-away-all-estimates-unemployment

 

            Investing

 

              Could a bear market be starting?

              https://www.carsongroup.com/insights/blog/no-fooling-could-we-go-into-a-bear-market/

 

                  Latest from BofA.

 

                  Earnings forecasts up, stocks down.

              https://www.ft.com/content/f2694c02-1f02-4bae-9d89-f1591f75e2db

 

                  Spring snapshot of S&P market cap.

              https://politicalcalculations.blogspot.com/2026/04/spring-2026-snapshot-of-s-500s-market.html

 

                  Q1 earnings expectations.

              https://talkmarkets.com/article/sp-500-earnings-dashboard-26q1-1775148517

 

              For the bears.

              https://www.zerohedge.com/markets/cash-king-dowd-sees-10000-gold-credit-market-starting-end-party

 

 

What I am reading today

 

 

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The Morning Call--The easy part of the bounce is over

 

The Morning Call

 

4/2/26

 

The Market

         

    Technical

 

            Wednesday in the charts.

            https://www.zerohedge.com/markets/whos-fool-trump-talk-kicks-april-stocks-gold-crypto-higher

 

Summary: New month, new quarter yet same hyperbolic back-and-forth between Trump and Iran ahead of a potential ceasefire (and tonight's must-watch Trump Address) may leave a lot of people feeling like a fool. Oil was lower overall but not aggressively so. Stocks relished the hope of a ceasefire (led by big-tech), but activity was low, bonds chopped sideways. A weaker dollar supported bullion, but bitcoin gave up its early gains.

 

Note: despite another positive day in stock land, the S&P (1) traded to the upper boundary of that trend of lower highs and retreated, (2) failed to close above the last lower high and (3) did so on unimpressive breadth and volume. In addition, the 50 DMA fell below the 100 DMA. Keep your powder dry until there is a break of the current downtrend.

 

            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

 

From TraderFeed: ‘So, for instance, yesterday we had a nearly 3% jump in SPY. That is unusual; there have only been 49 occasions out of around 4000 since 2010 when a similar rise has occurred. The average return over the next five days has been negative, but quite positive over the next 30 trading days. Perhaps more important, the next five day volatility has been over twice as high following the big jump compared with the rest of the market sample.’ 

 

            Massive short squeeze fogs market’s view of peace prospects.

            https://www.bloomberg.com/news/articles/2026-04-01/wall-street-traders-say-positioning-not-peace-is-driving-stocks?srnd=homepage-americas&sref=loFkkPMQ

 

            The easy part of the bounce is over.

            https://www.zerohedge.com/the-market-ear/easy-part-bounce-over-now-comes-hard-part

 

XLE from overbought to support.

            https://www.zerohedge.com/the-market-ear/overbought-support-3-days-xle-just-reset

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

Weekly initial jobless claims totaled 202,000 versus consensus of 212,000.

 

The February trade balance was -$57.3 billion versus expectations of -$59.2 billion.

 

The March manufacturing PMI was reported at 52.3 versus estimates of 52.4.

https://www.advisorperspectives.com/dshort/updates/2026/04/01/sp-global-manufacturing-pmi-march-2026

 

The March ISM manufacturing index was 52.7 versus projections of 52.5.

https://bonddad.blogspot.com/2026/04/march-ism-manufacturing-shows-expansion.html

 

                        International

 

                        Other

 

                          February median household income.

                          https://politicalcalculations.blogspot.com/2026/04/median-household-income-in-february-2026.html

 

                          The latest March CPI nowcast.

                          https://econbrowser.com/archives/2026/03/anticipating-april-10-march-cpi-release

 

                          Four factors that will determine the direction of the economy.

                          https://www.wsj.com/economy/economic-tail-risks-in-2026-65187567?mod=economy_lead_story

 

                          Huge physical disconnect in the energy market.

                          https://www.zerohedge.com/commodities/there-huge-physical-disconnect-energy-markets

 

Summary: Specialist clients increasingly believe (1) a higher floor is being set across several commodity markets given destocking and infrastructure damage and (2) commodities can trade materially higher with no further escalation as the current imbalance can create acute tightness. 

 

            Thursday Morning Setup

 

Global risk assets, including US equity futures and global markets, as well as Treasuries and precious metals, tumbled as oil soared with Brent hitting $110 this morning after Trump's late Wednesday speech refused to pivot and dashed hopes that the Hormuz Strait would reopen soon and the war in the Middle East is nearing a swift resolution. As of 8:00am ET, S&P 500 futures dropped 1.7%, reversing yesterday's short squeeze as investors refuse to add to risk positions ahead of the long weekend when many speculate a ground invasion of Iran may begin. Nasdaq 100 contracts slumped 2% amid a premarket selloff in big tech stocks and chipmakers. Tech is getting hit hard with Mag7 and Semis lagging while Cyclicals ex-Energy are underperforming Defensives with both Staples and Healthcare down in absolute terms pointing to broad-based de-risking into the holiday weekend. Energy should have a good day as investors re-gross in the sector and Integrateds are trading up ~3% pre-mkt. Brent soared 8.2% to more than $109 a barrel after Trump pledged more aggressive action against Iran and offered no concrete plans to reopen the Strait of Hormuz. European diesel futures hit $200 a barrel. Bonds tumbled as expectations that oil prices will stay higher for longer prompted traders to initiate fresh bets on tighter monetary policy. The dollar advanced the most in a week while gold snapped a four-day streak of gains. US economic data calendar includes March Challenger job cuts (7:30am New York time), February trade balance and weekly jobless claims (8:30am). Fed speaker slate includes Logan (10:15am) and Bowman (12:45pm)

 

            Iran

 

              Dimon says that it is vital to successfully complete Iran war.

  https://www.bloomberg.com/news/articles/2026-04-01/dimon-says-vital-us-ensures-iran-war-is-successfully-completed?srnd=homepage-americas&sref=loFkkPMQ

 

  Summary: “We’ve got to finish this thing and finish it right.” Anything less will likely leave markets and the world economy vulnerable to   shocks.

 

                          Gulf allies privately encouraging Trump to decisively defeat Iran.

              https://apnews.com/article/trump-iran-saudi-arabia-mbs-gulf-war-uae-89f690b952fe28d3140c537b70fa5051

 

            Monetary Policy

 

              Are fiat currencies in a death spiral? This analyst thinks not.

              https://www.advisorperspectives.com/commentaries/2026/04/01/rubino-fiat-currencies-death-spiral

 

            Inflation

 

              Disappointing plantings, higher fertilizer prices add to global food inflation.

              https://www.zerohedge.com/commodities/disappointing-us-plantings-exploding-urea-prices-fertilizer-squeeze-add-fuel-global

 

Summary: granular urea spot, the benchmark cash price for granular urea at New Orleans and the lower Mississippi River market, has nearly doubled this year to almost $700 per short ton. For context, urea is one of the world's most important nitrogen fertilizers. Adding to the surging fertilizer prices and mounting global supply concerns, the latest U.S. Department of Agriculture data showed that American farmers plan to plant fewer acres this year than previously expected.

 

     Investing

 

            Five red flags that almost always lead to disaster.

            https://www.riskhedge.com/outplacement/the-5-red-flags-that-almost-always-lead-to-disaster

 

            Betting on war is dangerous.

            https://spencerjakab.substack.com/p/loaded-dice-will-blow-up-in-our-faces

 

            Reasons to be bullish on gold.

            https://www.ft.com/content/daf29b16-5f97-42af-b7c0-8e9ca78c8e95?syn-25a6b1a6=1

           

Summary: So, what is the gold price telling us? First, markets remain uncertain on the duration of the conflict, driving a continued need for liquidity. Evidence of this is shown in how the implied volatility in gold markets has jumped to levels last seen during the pandemic. Gold also appears to have now reverted to taking its short-term cues from US rate expectations and uncertainty around the policy response to the current crisis.

 

The state of the ETF market. I didn’t find most of the article particularly interesting. However, if you invest in ETFs, you need to read the section entitled Trust Decay.

            https://www.etf.com/sections/etf-analytics/q1-26-state-bonkers-etf-market

 

    News on Stocks in Our Portfolios

 

 

What I am reading today

 

           

 

 

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