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.
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.
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.
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
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