Week ended April 10, 2026: fragile ceasefire offers investors some relief

The US and Iran agreed to a two-week ceasefire on Tuesday evening, not long after President Trump had warned Iran that “a civilisation will die tonight”.  Perhaps this belligerent rhetoric was effective, or perhaps not.  In any event, the bombing stopped – or at least most of it – on Tuesday evening as a fragile two-week ceasefire was agreed and started.  US and Iranian delegations are in Islamabad this weekend negotiating what will hopefully be a permanent solution to this conflict that clearly has not gone as the Trump Administration was hoping.

Investors were waiting for peace to break out to jump back into risk assets, which they did with a vengeance on Wednesday.  Global stock markets rallied hard the rest of the week, joined by rallies in US Treasuries and gold.  Not surprisingly, oil gapped lower on the news that the Strait of Hormuz would re-open and oil would again flow freely, although this has yet to happen.  The US Dollar also weakened on the news of the ceasefire as investors moved out of the safe haven global reserve currency and into more risky assets.  Friday morning’s CPI report for March gave bond investors second thoughts as yields back up a few basis points across the curve.  Record low consumer confidence and higher inflation expectations released Friday morning also heightened concerns, although most of the poll was taken before the ceasefire was announced (see University of Michigan Survey of Consumers).  Even so, the market barely reacted as investors remained optimistic.   Below is a table that summarises the weekly performance of indices and assets tracked by EMC, with more detailed tables available in the market section at the end of this update.  It is always encouraging to see so little red in the table (meaning price moves in the wrong direction), although I am far from confident about the coming days.

The US-Iran War and aftermath

This conflict is far from over.  Folks will debate who came out better or worse even as the world waits on the final chapters of this conflict to be written.  To say that the two-week ceasefire looks a bit fragile is the mother of all understatements, although any solution that provides an opportunity to end hostilities and cool emotions is looked at favourably by investors. The yet-to-materialise reopening of the Strait of Hormuz needs to occur, although it is fairly clear by now that Iran holds all the cards in this respect.  From a political perspective, a solution that leaves the hardliners in charge in Iran and the stockpile of enriched uranium largely intact seems very far from achieving the initial “objectives” of Mr Trump in initiating this war.  How you view the merits of this conflict is clearly subjective and certainly a matter of your political leanings.  Setting that aside for the moment, let’s hope for an outcome that ends hostilities permanently so that markets can get back on track.  If the war moves to the background, investors will be left picking up the economic pieces of this war.  Moreover, “pre-war concerns” around things like A.I. ROI and private credit concerns will move back to the foreground.   

What should an investor do now?

I will offer my high-level view regarding an answer to this question based on experience: stay invested.  During times like these, it is easy and quite normal to let your emotions get the best of you.  Markets have been in a funk many times in the past.  In many cases, the signs of trouble might have seemed crystal clear in retrospect.  And in other cases, the economy has been undermined because of poor policy decisions.  Although Mr Trump makes a sport of self-inflicted damage, he also is well known for winding it back when markets express their displeasure (although granted that the war with Iran is very different in that it takes two to Tango).  Trying to guess what this administration might do next is a fool’s game. 

Investors can easily be lured into thinking that market timing works for them.  However, history has proven over the long term that it does not, even for professional investors.   Avoiding downturns and down days might feel good when they occur, but missing the rallies and up days can be far worse in terms of opportunity cost.  

Having said all that, I do like to play around the edges.  Therefore, if I were forced to offer ideas at this point, I would caution against jumping in with both feet if you have been sitting this rally out, but rather to progressively dip in selectively.  I like a couple of stocks that I think are relative value bargains for various reasons, including MSFT and NVDA for those with a stomach for big tech (disclosure: I own both).  Both look to be just the right side of fair value given their recent price declines and strong operating metrics.  META also looks cheap but comes with baggage.  Away from tech, energy is probably on the wrong side of fair value at the moment, largely depending on your views regarding the outcome of the peace process.  I always hold energy stocks/ETFs and gold ETFs, and consider these core components of my investment portfolio. Speaking of gold, the run from around $4,000/oz to $5,000/oz pre-war took on a meme-like feel, so I think – in spite of last week’s run-up – that it is probably fully valued at these levels.  

In fixed income, I am for the first time in several years contemplating duration trades although I still have concerns with the rapidly deteriorating US fiscal situation.  Even so, history has shown that the US always somehow muddles through. Although the link between what the Fed does and long-term yields is loose, it does exist.  The reason I am thinking about longer-duration trades is that I believe the war with Iran will be one more negative for future US economic growth and hence the jobs market, and that the Fed will ultimately resolve its two-mandate conflict by siding towards the weakening jobs market.  The data doesn’t necessarily suggest this is the case just yet, so my comments are based around nothing more than instinct at this point. 

All of the above are observations from a pundit so take them with a grain of salt.  For the record, they are not investment advice, blah blah blah.

Quick recap of first quarter 2026

The table to the right illustrates relative performance of the indices and assets tracked by EMC in the 1Q2026.  I view it this way – it could have been a lost worse.  Having the US-Iran War drive down prices in March did not help, although the late rally into the final trading days of the month softened the blow.  From there, prices have generally improved as the second quarter is underway.

MARKET DATA AND TABLES

Below are tables of key indices and asset prices that have been updated for the past week.

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