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.
France yanks the
last of its US based gold reserves.
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.
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.
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.
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.
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.
The dollar is
losing its grip.
https://talkmarkets.com/article/the-dollars-grip-is-loosening-what-comes-next-1775214726
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