The cozy feeling of optimism that had carried stock markets to new all-time highs the previous week began to unravel over the weekend. Within hours of Trump boasting that "Iran has agreed to never again close the Strait of Hormuz”, Iran again closed the Strait of Hormuz, in response to the US refusal to lift its blockade.
The oil price jumped but stocks remained steady in Asia and Europe on Monday. The previously-buoyant mood on Wall Street soured as Trump assured us all that he was not going to extend the ceasefire. Iran cast doubt on its attendance at proposed negotiations in Pakistan. Markets flinched a little and the rally stalled with the indexes all slipping a touch lower.
Retail sales data was better than expected on Tuesday morning and stocks rose cautiously when markets opened on ongoing low trading volume before falling back as lingering hopes of imminent US/Iran negotiations evaporated and drove oil prices back into triple figures. The indexes all closed in the red again for their first back-to-back down-days of the month.
Just moments after the closing bell, Trump completely reversed course yet again, posting that he was indefinitely extending his ceasefire deadline “until discussions are concluded” while maintaining the naval blockade.
Stocks recovered solidly on Wednesday with tech taking the lead but a confused sense of limbo persisted in a vacuum of meaningful war news beyond Trump barking threats on social media, even as more mostly positive earnings reports continued to come out. The indexes defiantly held onto their gains throughout the session and both the S&P 500 and NASDAQ indexes reclaimed new all-time record highs.
Earnings from Tesla, IBM and Amex underwhelmed and brutal levels of mass layoffs and voluntary buyouts were announced by both Microsoft and Meta on Thursday. Stocks stagnated, albeit still hovering around record highs and then sank moderately with zero signs of any resolution of the standoff in the Strait of Hormuz. Both sides seem equally desperate to declare victory, but each are terrified of appearing to their domestic audiences to be making any kind of compromise. Energy prices rose for a fifth straight day.
A sensational earnings report from Intel, which screamed up by almost 30% at the open to break its record high from 2000 before cooling off a touch, pushed tech stocks sharply higher again on Friday morning. The indexes were then boosted further by the US announcement (notably unconfirmed by Iran) of a possible sequel to the failed high level face-to-face negotiations in Pakistan at the weekend to complete a fourth straight week of gains following four weeks of losses and, of course, at new all-time record highs.
I am losing count of the number of times I have been asked recently a version of the question; “How can we possibly be at new all-time highs, given what is going on?”
I see a number of reasons:
* Financial markets are always forward-looking and anticipatory. A common investor mistake is to conflate events happening right now directly with the real-time daily direction of stock and bond prices. We are probably past peak uncertainty in the war. While the timeline is unclear to say the least, some kind of eventual diplomatic solution is still the most likely outcome.
* The biggest market fear has always been that the conflict would send the price of oil spinning above $150 and towards $200 a barrel (at which point we will probably get massive demand destruction that will inevitably cap the price), not about whether its $75, $85 or $95. That $200 scenario remains unlikely, and as long as it stays that way, traders will give the diplomatic process the benefit of the doubt.
* The Q1 earnings season is proving to be extremely robust. 80% of companies reporting so far have beaten estimates, some by a lot. At the end of the day, earnings are the prime driver of stock prices.
* A strong dip-buying mindset remains alive and well and becomes self-fulfilling as investor reluctance to stay bearish for too long becomes reinforced time and time again by swift bounce-backs in price following any substantial declines.
* AI is back, baby! Tech and AI-related names, which are for the most part less impacted by the conflict, are soaring again. Concerns over AI capital expenditure that were rampant earlier in the year have eased and many of these names comprise massive chunks of the weightings of the major indexes.
Some other things I’m thinking about ..
* This coming week is a highly consequential one. Beyond continued war developments, there’s a Big Wednesday that includes earnings from Alphabet/Google, Microsoft and Meta and a Fed Funds Rate decision (to likely do nothing - see INTEREST RATE EXPECTATIONS below). Amazon and Apple also report during the week.
* Fed chairman nominee Kevin Warsh faced a grilling at his Senate confirmation hearing last week, including the accusation that he was simply Trump’s“glove puppet”. Despite his pledge to maintain central bank independence, the troubling signs were there as he declined to say who won the 2020 election and was unable to come up with a single Trump economic policy that he disagreed with. He also refused to come to the defense of Fed colleagues Lisa Cook and chairman Jerome Powell who were at the time both facing vindictive and obviously spurious legal proceedings at the behest of the president (the case against Powell was actually dropped later in the week), choosing instead to fire barbs at the current Fed chairman over recent policy that sounded remarkably like a Trump social media post. Warsh is all but certain to be confirmed by the Senate.
If you are not yet a financial planning or investment management client of Anglia Advisors and would like to explore becoming one, please feel free to reach out to arrange a complimentary no-obligation discovery call with me.
ARTICLE OF THE WEEK ..
“Stocks don’t always obey the fundamentals of the backdrop. Because they are owned by people, traded by algorithms created by people and perceptions change as quickly as human emotions.”
Ritholtz’s Josh Brown chimes in on the “AI is a bubble” theory.
.. AND I QUOTE ..
“They don’t care about gas prices.”
American Express CEO Stephen Squeri, on the company’s customers.
LAST WEEK BY THE NUMBERS:
Last week’s S&P 500 market color courtesy of finviz.com
* SPYM, a US Large Cap ETF, tracks the S&P 500 index, made up of 500 stocks from a universe of the largest US companies. Its price rose 0.5% last week, is up 4.8% so far this year and ended the week at its all-time record closing high (04/24/2026).
* IWM, a US Small Cap ETF, tracks the Russell 2000 index, made up of the bottom two-thirds in terms of company size of a universe of 3,000 of the largest US stocks. Its price rose 0.3% last week, is up 12.4% so far this year and ended the week 1.1% below its all-time record closing high (04/20/2026).
* VXUS, an International Non-US ETF, tracks the MSCI ACWI Ex-US index, made up of over 8,500 of the largest names from a universe of stocks issued by companies from around the world excluding the United States, in both developed and emerging markets. Its price fell 1.5% last week, is up 9.4% so far this year and ended the week 2.4% below its all-time record closing high (04/17/2026).
INTEREST RATES:
* FED FUNDS RATE * ⬌ 3.625% (unchanged from a week ago)
* PRIME RATE ** ⬌ 6.75% (unchanged from a week ago)
* 3 MONTH TREASURY ⬇︎ 3.69% (3.70% a week ago)
* 2 YEAR TREASURY ⬆︎ 3.78% (3.71% a week ago)
* 5 YEAR TREASURY ⬆︎ 3.92% (3.84% a week ago)
* 10 YEAR TREASURY *** ⬆︎ 4.31% (4.26% a week ago)
* 20 YEAR TREASURY ⬇︎ 4.88% (4.89% a week ago)
* 30 YEAR TREASURY ⬌ 4.91% (4.91% a week ago)
Data courtesy of the Federal Reserve and the Department of the Treasury as of Friday’s market close.
* Decided upon by the Federal Reserve Open Market Committee at periodic meetings 8x a year. Used as a basis for overnight interbank loans and for determining high yield savings interest rates.
** Wall Street Journal Prime Rate as of Friday’s close. Tending to move in lockstep with the Fed Funds Rate, this measure is used as a basis for determining certain consumer loan interest rates such as credit cards, auto loans, personal loans, home equity loans/lines of credit and securities-based lending.
*** Used as a basis for determining mortgage interest rates.
AVERAGE 30-YEAR FIXED MORTGAGE RATE:
* ⬇︎ 6.23%
One week ago: 6.30%, one month ago: 6.30%, one year ago: 6.81%
Data courtesy of the Freddie Mac Primary Mortgage Market Survey.
INTEREST RATE EXPECTATIONS:
Where will the Fed Funds interest rate be after the next rate-setting meeting on April 29th?
* 0.25% higher than now .. ⬌ 1% probability (1% a week ago)
* Unchanged from now .. ⬌ 99% probability (99% a week ago)
* 0.25% lower than now .. ⬌ 0% probability (0% a week ago)
With six more rate-setting meetings in 2026, what is the most commonly-expected number of remaining 0.25% Fed Funds interest rate cuts this year?
* ⬌ Zero (unchanged from a week ago)
Data is derived from futures market pricing based on the current Fed Funds interest rate of 3.625%. Courtesy of CME FedWatch Tool as of Friday’s market close.
PERCENT OF S&P 500 STOCKS ABOVE THEIR OWN 200-DAY MOVING AVERAGE:
* ⬇︎ 55%
One week ago: 60%, one month ago: 42%, one year ago: 31%
Data courtesy of barchart.com as of Friday’s market close.
This widely-used technical measure of market breadth is considered to be a very robust indicator of the overall health of the S&P 500 index.
A high percentage (above 70%) generally suggests broad market strength and a bullish trend, while a low percentage (below 30%) may indicate market weakness and a bearish trend.
FEAR & GREED INDEX:
“Be fearful when others are greedy and be greedy when others are fearful.” Warren Buffett.
Data courtesy of CNN Business as of Friday’s market close.
The Fear & Greed Index from CNN Business can be used as an attempt to gauge whether or not stocks are fairly priced and to determine the mood of the market. It is a compilation of seven of the most important indicators that measure different aspects of stock market behavior. They are: market momentum, stock price strength, stock price breadth, put and call option ratio, junk bond demand, market volatility and safe haven demand.
Extreme Fear readings can lead to potential opportunities as investors may have driven prices “too low” from a possibly excessive risk-off negative sentiment.
Extreme Greed readings can be associated with possibly too-frothy prices and a sense of “FOMO” with investors chasing rallies in an excessively risk-on environment . This overcrowded positioning leaves the market potentially vulnerable to a sharp downward reversal at some point.
A “sweet spot” is considered to be in the lower-to-mid “Greed” zone.
Anglia Advisors has updated its Privacy Policy. You can view the latest version here.
WWW.ANGLIAADVISORS.COM | SIMON@ANGLIAADVISORS.COM | CALL OR TEXT: (646) 286 0290 | FOLLOW ANGLIA ADVISORS ON INSTAGRAM
This material represents a highly opinionated, speculative assessment of the financial market environment based on assumptions and prevailing information and data at a specific point in time and is always subject to change at any time. Although the content is believed to be correct at the time of publication, no warranty of its accuracy or completeness is ever given. It is never to be interpreted as an attempt to forecast any future events, nor does it offer any kind of guarantee whatsoever of future results, circumstances or outcomes.
The material contained herein is not necessarily complete and is also wholly insufficient to be relied upon as research or investment advice or as a sole basis for any financial determinations, including investment decisions or making any kind of consumer choices, without further consultation with Anglia Advisors or other fully-qualified Registered Investment Advisor. The user assumes the entire risk of any decisions made or actions taken based in whole or in part on any of the information provided in this or any other Anglia Advisors published content.
Under no circumstances is any Anglia Advisors’ content ever intended to constitute tax, legal or medical advice and should never be taken as such. Neither the information contained nor any opinion expressed herein constitutes a solicitation for the purchase of any security or asset class. No formal client advice may be rendered by Anglia Advisors unless and until a properly-executed client engagement agreement is in place.
Posts may contain links or references to third party websites or may post data or graphics from them for the convenience and interest of readers. While Anglia Advisors might have reason to believe in the quality of the content provided on these sites, the firm has no control over, and is not in any way responsible for, the accuracy of such content nor for the security or privacy protocols that external sites may or may not employ. By making use of such links, the user assumes, in its entirety, any kind of risk associated with accessing them or making use of any information provided therein.
Those associated with Anglia Advisors, including clients with managed or advised investments, may maintain positions in securities and/or asset classes mentioned in this post.
If you enjoyed this post, why not share it with someone?
