Breaking News: Global Markets Soar After Last-Minute Ceasefire Deal! | Kenny Polcari

Well, good morning! Yes, it's me, Kenny Polcari, your host of the party, and today is Wednesday, April 8th, 2026, and there is so much to talk about. So here are the things that you need to get your day started. Well, there's a ceasefire, and it was announced at the 11th hour. What did we talk about yesterday? Markets around the world this morning are surging higher. All across the board. The Strait, well, that's open and ships are passing through apparently. Bonds, well, they're up. Oil is down significantly. Gold is up and the VIX is down. And what do we have for dinner tonight? We're gonna try the Umbrian-style mussels. They are delish. Well, good morning and look at this market. Hello! Get ready, it is risk-on as expected. The world got an 11th-hour deal last night. They took it right to the edge, teasing all day long. Investors, traders, and even the algos struggling all day to try to figure it out. The question: will the bombs drop at 8 PM or not? Now, the late afternoon action yesterday gave us a hint that something was brewing because markets did not melt down, nor was there any panic. Did the VIX rise? Yes, to a high of 28 at 3 PM, but the telltale sign was when Howard collapsed in the last hour of trading, falling 8% off that high. Now it still ended the day 2550, up 6% on the day, leaving us in the cautious zone. But it was off that nervous high that looked like it was going to take us to the panic mode. And stocks, they mostly ended the day higher, another telltale sign. Now while the Dow lost 85 points, the S&P gained 5, the Nasdaq gained 21. The Russell's gained 4. The transports gained 242 points, or 1.3%. Bingo! The equal-weight S&P lost 20 while the Mag 7 gave up 37 points. A performance I'd call a win. Now, if you read my note from yesterday, you knew how I felt. I just didn't see it. I was not in the camp that Trump was gonna obliterate the whole civilization. I mean, come on, really? Were his words dramatic and stupid? Of course. But did you really expect anything different? Haven't we seen him make bellicose statements before? It's his style. Maximum pressure and maximum drama. You may not like it, but it is his style. At the end of yesterday's note, I said, quote, I'm betting on an 11th-hour deal. No one, including the Gulf states, really wants to see total destruction of Iran. So let's get real. I say it was going to happen at 6 PM. I think the news actually hit the tape at 6:30 PM. Early evening, the news does hit the tape. Trump agrees to a 2-week ceasefire with Iran negotiated by Pakistan, right? Less than 2 hours before the deadline that threatened to devastate the whole civilization. Now, negotiations are supposed to take place in Islamabad beginning on Friday, although that's not a firm confirmed officially yet, but I'm sure we're going to hear more about that in the hours later today. Now, all this hinges on at least one major tenet: Iran has to open the Strait of Hormuz with no strings attached. And as of this morning, the Strait is officially open and ships are passing through. Now, they must coordinate with Iran's armed forces to navigate it, but they're passing through. Now, let's be honest, this is only a first step But it is a step, and there is much more to come. But at 5 AM this morning, we can say the world is in a different place than it was yesterday afternoon. And markets around the world are celebrating and surging. Asian markets were the first to react, and it was dramatic. South Korea rose 6.8%, Japan up 5.4%, Taiwan up 4.6%, Hong Kong up 3%. China up 3.5%, and Australia ended the day higher, up 2.6%. European markets are now fully engaged, and they are up substantially as well. At 6 AM this morning, France, Germany, and Euro stocks are all up 4.3%. Italy up 3.3%, Spain up 3%, while the UK is up 2.5%. And not to be left out, uh, US futures are surging as well on the back of this news. Dow futures are up 2.5%, S&P's up 2.6%, NASDAQ up 3.8%, and the SMIDS, the Russell, up 3.7%. Notice where you see that early strength. Tech and SMIDS are catching a bid as investors breathe a bit easier after the ceasefire headlines. Tech had become oversold in recent pullbacks, pushing valuations in many names back towards more attractive levels. Think almost value, right? So the moment the geopolitical pressure eased, traders and algos, they stepped right back in looking for where the opportunity is as they scoop up some of those discounted names. Now look, at the same time, small and mid caps, right, otherwise known as SMIDs, they're rallying as well, which makes sense. These companies tend to be more domestically focused and more sensitive to energy costs. So the pullback in oil and the reopening of the Strait of Hormuz is giving investors confidence to rotate back into that part of the market or put more money to work in that part of the market. In other words, when the market flips and the tone goes risk-on, the VIX falls, so investor traders and algos tend to buy beta first. Okay, so understand what's beta. Well, it's how sensitive a stock is to the overall market. If beta— if a stock has a beta equal to 1, then it moves as the market moves, right? So you think of uh, industrials, financials, communications, and energy. They tend to be a 1 beta. If beta is greater than 1, that means that those names typically move more than the market. They're more volatile in both directions. So think tech, semis, consumer discretionary, and the SMIDs. If beta is less than 1, then it moves less than the market. It's less volatile in both directions, essentially more defensive. So think of consumer staples, healthcare, telecoms, and utilities. So if you're buying beta, then you are typically buying tech in all forms, and you're buying SMIDs, cyclicals, and other high-growth names because they would be expected to outperform under these circumstances. I mean, just look at what futures are doing. The NASDAQ, which is tech, and the Russell, which are the SMIDs, are both up more than 3.5%, while the market defined by the S&P right now is up 2.5%. As a long-term investor, you think of this— you think of it this way: When the market goes risk-on, leadership shifts from beta equals 1 to beta equals greater than 1, which is exactly what you're seeing this morning in markets around the world. And clearly, when the market goes risk-off, then the leadership shifts from beta greater than 1 to beta less than 1. Gabish. Now, so what's happening to oil? It's collapsing. WTI is down 15.6% this morning. Trading at $95.30, while Brent is down 13%, trading at $95. So now the pressure at the pump should begin easing fairly quickly. Wholesale gasoline prices respond almost immediately, but retail stations usually take 2 or 3 weeks to pass those savings through to consumers. Another example of the classic rockets and feathers theme, right? Uh, where prices, they rise quickly, but they fall slowly. As these negotiations continue, then we can expect oil to retreat even further. Oil futures going out into the fall are pricing in oil in the low 70s, but I suspect you could even see that decline further, uh, as these negotiations go on. Now let's talk bonds. I suspect we're going to see bonds being bought today. Think lower oil prices reducing inflationary pressures, which might mean lower interest rates, and lower interest rates supports bond buying at these levels. This morning, the 10-year yield is down 5 bps at 4.24%. The 30-year is down 3 bps at 4.84%. Likely going lower if these negotiations continue. Now, gold's another winner off the headline. It's up 1.7% today on top of yesterday's 1.2% gain, trading this morning at $4,790. That's up $82. And that might make you pause, because if global tensions are easing, shouldn't gold be falling? Well, yes and no. Yes, because easing geopolitical risk usually reduces the safe haven demand for gold. Had the ceasefire not happened and tensions escalated further, gold would likely be surging even more as investors rushed into the classic safety trade. But the market this morning is reacting to a different set of forces, right? The ceasefire reopening of the strait is causing oil to plunge, the dollar to weaken, and inflation expectations to suddenly ease, which in turn is pushing bond yields lower. And when yields fall, the opportunity cost of owning gold declines, which then tends to support prices for gold. So while the geopolitical risk premium may be fading a bit, the macro backdrop of lower yields and softer dollar is keeping gold well bid. In other words, if the bonds were falling, gold would be rallying as a safety trade. Today it's rallying because interest rates are falling. Now, the VIX, the fear gauge, that's plunging. It's down 20% as the news hit the tape. That move pushed the VIX down through short-term trendline support at 22.30, leaving it sitting just above the intermediate support at 19.60, which brings us where? Right back into the complacent zone. Now, while all that sounds like good news, and it is, I wouldn't get too complacent. The situation remains fluid, and investors would be wise to stay focused and vigilant. Economic data today includes mortgage apps and the release of the March FOMC minutes, which could offer additional clues about the Fed's thinking on inflation, interest rates. But I wouldn't be focused on that today because I think we know everything that we know. As the S&P closed Thursday at 6,616, up 5 points, leaving us still below the long-term trend line at 6,644. But that is about to change. Futures are pointing up 180 points higher in the pre-market. Which sets the stage for the S&P to blow right up and through that trend line on the opening bell. And if that happens, we're also going to clear the short-term trend line at 6771, leaving the index kissing the intermediate trend line at 6804. In total, the S&P would need to rally roughly 3% to break through all of these trend lines, something that could easily happen in a risk-on environment as long as the headlines don't change. It's gonna be a good day. Now look, you can call me at 561-931-0190 and let's talk about how Slatestone Wealth can help you reach your retirement goals, because I'm happy to always do that. All right, so let's talk about what we're having for dinner today, because actually that's most important, right? When you want to talk about food and eating, I mean, come on, who doesn't love food? We're gonna have the Umbrian-style mussels. Now Umbria is one of the 20 regions in Italy. It's bordered by Tuscany, Lazio, and Marche, and is the only region that is not located on either coastline, right? It's not on the Mediterranean or the Adriatic. Or does it even border another country? It does not. It sits between Rome and Florence and counts Perugia as its capital. Umbria is known as il cuore verde d'Italia, or the green heart of Italy. It has spectacular landscapes, and fertile grounds come from the valley of of the Tiber. Now, be sure to include Perugia and the region of Umbria in your next visit to Italy because you will not be disappointed. Now, this is an easy dish to make and it should be served with toasted garlic bread, a big salad, and a glass of chilled rosé. And it is summertime, so it's rosé all day. You could serve it as an appetizer, you could serve it as a main dish, however you like. Now, for this you need 2 pounds of fresh mussels. And if they're really fresh, you're gonna need to scrub 'em to remove any sand and make sure that you remove the beard that's on the outside of the shell. Once you clean them, strain them, then set them aside in a pot of cool water. You're also going to need olive oil, onions, garlic, dry white wine, 1/2 cup of diced sun-dried tomatoes in oil. You need red pepper flakes if you want it hot. You need fresh parsley. And this, this recipe calls for diced Suprasatta as well. Now Supersata is an Italian dry salami that you can buy in any butcher or large grocery store. It is not pepperoni. Now you want to begin by heating the oil in a large pot. Once the butter is all melted, the oil and the butter, once it's melted, add in the chopped garlic and the diced onion. Sauté that for about 5 minutes. Next, you're going to add the diced Supersata and the diced sun-dried tomatoes. Sauté those for another 5 minutes. Now here's where you'd add the red pepper flakes if you really want it hotter or a little spicier. Now some people, some people will use pancetta instead of the Suprasata. You can, that's okay, but it's going to have a different taste because the Suprasata gives it a whole different flavor and texture. Now from here you're going to add 1½ cups of the, of the white wine. Bring it to a boil. Once it boils, you're going to add the mussels. Cover the pot with a tight lid, reduce heat to medium-high, and let it cook for 5 to 8 minutes or so. Now remove the lid. Stir the mussels a bit, cook for another 5 minutes, letting, you know, the alcohol burn away. Once it's done, you're gonna check for any unopened mussels, and the ones that are not open, you're just gonna throw 'em away. Now you're gonna add in the chopped fresh parsley because this adds color and finishes the dish. Now while the mussels are cooking, you're gonna make the garlic bread with slices of fresh Italian pane di casa. You're gonna toast it in the oven and you're gonna slice it in half. Serve that in a basket in the center of the table for your guests to enjoy. Always have plenty of rosé on the table to enjoy as you're eating this dish. Look, it's a great summertime dish. You can have it out on the deck if you want. You can have it out in the backyard. You can have it at the dining room table. You can have it wherever you want, but just have it because you won't be disappointed. Look, I'm on my way down to a conference for Thursday. I'll be speaking at the Money Show on Friday in Hollywood, Florida. So until then, take good care.