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?
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.
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:
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.
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”
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for Survival’s website (http://investingforsurvival.com/home)
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