“In the spring, there will be growth.” Chance the Gardener
‘Wall Street Has an Elite Coffee-Tasting Force. It’s Struggling to Find Recruits.’
WSJ)I COULD DO THIS!!!Getting some greatest hits this morning from Trump on Fox Business: we should have Greenland, disappointed with NATO, a gratuitous shot at Meloni after she criticizes a tweet attacking the Pope, and a renewed threat to fire Powell. Expects a ‘big, fat hug from Xi for opening the Strat.
Feels like he is going back to the old playbook despite growing evidence of its quickly declining effectiveness. More and more of the market is yawning at the noise.
**State of Play:**We are now in a situation where the world trusts Iranian comments on the situation as much as the President of the United States.Falling faster than a meteor: J.D. Vance’s star is rapidly declining, and I would not be at all surprised if he gets more and more marginalized. Naming him “Fraud Czar” felt like a dead-end, guaranteed-to-fail appointment. This NY Times story detailing the decision to start the Iran ‘excursion’
of leaking from the Vance camp, painting him as the only wise man in the room opposing the move. His failure to help Orban, followed by the total waste of time in Islamabad (which I still believe was pure theater), further sullied his standing; in fact, why was he there instead of Rubio? Set up for failure, perhaps? just sayin..reekedAccording to Co-Pilot,
‘under international law, a blockade is generally considered an act of war.’ Also, according to Co-Pilot,*‘Congress — specifically granted in Article I, Section 8, Clause 11 of the Constitution:**“The Congress shall have Power To declare War ‘*Did I miss the Congressional Resolution, or do we now think of the Constitution as a series of suggestions and not the iron-clad basis for our entire Government?
Oh yay!
‘End of ‘Pattern Day Trader’ Rule Could Turbocharge Retail Stock Trading -- WSJ’. Just what we needed. Tangentially, more than half of men ages 18-49 (52%) now say they have an active sports betting account with an online sportsbook like DraftKings, Caesars, FanDuel, or BetMGM.KEY THEMESThe Iran conflict is entering a critical inflection point as President Trump signals the war is “very close to over” , yet the US naval blockade of Iranian ports remains “fully implemented” . The US military blockade of the Strait of Hormuz took effect Monday , creating what shipping analysts describe as a “restrictive” transit environment , though Trump claimed 34 ships passed through the strait on Sunday
The International Energy Agency has called this “the most severe oil supply shock in history” , with global oil demand now forecast to contract by 80,000 barrels per day this year—the first negative reading since the pandemic .
Markets are caught between optimism over renewed diplomatic efforts and the reality of ongoing supply disruptions: Brent crude has whipsawed from above $110 to the mid-$90s , the dollar is unwinding its war-driven rally after seven consecutive days of losses , and European banks have stabilized after BNP Paribas downgraded HSBC and Barclays while upgrading Standard Chartered .
MARKET SNAPSHOTCross-asset positioning is shifting dramatically as hedge funds pivot to bearish dollar bets , with the Bloomberg Dollar Spot Index falling for seven straight sessions to levels last seen in early March . The dollar’s retreat reflects market expectations of a positive war outcome , though Harvard economist Kenneth Rogoff warns investors may be “naive” about near-term resolution prospects and notes the dollar remains “at least 20% overvalued”.
Emerging market equities extended their rally with MSCI’s EM index posting its biggest weekly gain since the Covid era , driven by Asian tech stocks including TSMC, Samsung Electronics, and SK hynix . Bitcoin is holding above $74,000 but pulling back from its brief approach to $76,000 , with analysts noting $75,000 remains “both the milestone and the ceiling” .
MACROThe dollar has fallen to four-month lows as traders aggressively unwind haven positions, with hedge funds adding to bearish dollar trades through April 10 according to Morgan Stanley’s proprietary model . The offshore yuan climbed to three-year highs , while Chinese banks sold a record $257.64 billion in foreign currencies to corporations in March—the highest level since data became available in 2010.
European natural gas prices have surged over 40% to 2023 highs following the Iranian drone strike on Qatar’s Ras Laffan facility , though prices tumbled 17% on Wednesday as Qatar prepared to restart production . Goldman Sachs warns that damage to Qatar’s LNG infrastructure could push global gas prices 50-100% higher , and the firm forecasts Brent will average above $100 per barrel through 2026 if the Strait of Hormuz remains closed for another month .
Perspective: IEA Executive Director Fatih Birol spoke Monday at the Atlantic Council. His framing deserves direct attention. He points out the 1973 embargo removed roughly 5 million b/d of supply. The 1979 Iranian revolution also removed roughly 5 million b/d. Both triggered global recessions. The current disruption has removed more than 12 million b/d of oil supply and 20 percent of global LNG supply, with cascading effects through petrochemicals, fertilizers, and sulfur. Birol adds these numbers up to conclude the current crisis is a “triple shock” (oil, gas, food/fertilizer) that “surpasses in severity the shocks of 1973, 1979, and 2022 combined.”
Bessent on shrinking the balance sheet: “It is very difficult to get to a much smaller balance sheet from here.... I think it will be a long process. I’m not against it.”
Middle East
US CENTCOM:We have completely stopped maritime trade to and from Iran since the start of the blockade
Pres Trump (Fox): War with Iran is close not over; Iran very eager to make a deal; not thinking about extending ceasefire with Iran, an extension won’t be necessary; thinks you’re going to be watching an amazing 2 days ahead; It could end either way, but I think a deal is preferable because then they can rebuild
FT: Iran used China spy satellite to target US bases; IRGC secretly acquired system and used it to guide strikes during war in Mar
WSJ: More than 20 commercial ships have passed through the Strait of Hormuz in the past 24 hours, according to two U.S. officials. The development comes as the U.S. enforces a blockade of Iranian ports. Ships that aren’t visiting Iran’s ports aren’t subject to the blockade and are being allowed to transit freely.
WaPo: US to send 1000s more troops to ME as Pres Trump looks to squeeze Iran
Fars: Iranian super tanker has been able to pass through Strait of Hormuz
{ia} Mehr: Iran will use alternative ports to bypass blockade
China: Considering restriction on export of solar equipment to US
** From Scott Ruber at Citadel:**
‘CTAs have been the primary buyer in the systematic community, going from net short last week to long, however, exposure is only in the 31%tile; so, they continue to have scope to add on a move higher. Risk Control, however, has not been a meaningful buyer yet, with exposure flat WoW driven by high realized volatility. Should the speed of the move higher slow Risk Control could buy ~$185bn over the next month if SPX averages a +/-50bps move.
The flow backdrop improves further into May as the corporate buyback window reopens. While we are currently in peak corporate blackout, the repurchase window reopens in two weeks, providing a tailwind for incremental demand.
U.S. corporates have already authorized ~$428bn year-to-date, the strongest start on record, setting the stage for a meaningful reacceleration in buyback activity. With a 90% execution rate, this means that US corporates are on pace to execute roughly $1 trillion of share repurchases in 2026.
Tailwinds for the markets as systematic trading needs to catch up
Private Credit‘US Treasury asks private credit firms for data, Punchbowl News reports’
(Rtrs)
’More clarity emerging around private credit exposure.
BofA disclosed ~$20B in exposure, alongside JPM ($50B) and others, as scrutiny around the space grows.
So far, banks are emphasizing strong protections and downplaying systemic risk.’
‘Pimco Buys All $400 Million of Bonds Sold by Blue Owl BDC’-
(Bbrg)
Leveraged loan Index at multi-year lows
Disclaimer: Opinions are mine alone and may change. It does not constitute an offer to buy or sell or a solicitation of an offer to buy or sell any security, loan or asset or to participate in any trading strategy. It is not intended to form the basis of any investment decision, should not be considered a recommendation, and does not constitute an offer or solicitation with respect to the purchase or sale of any investment, nor is it a confirmation of such terms.
