Oil is above $108. Aluminium smelters were struck over the weekend. The Cosco ships turned back. Polymarket puts a 72% chance of U.S. forces entering Iran by April 30. Powell speaks unscripted at Harvard this morning. The S&P 500 has closed higher every Monday since the war began. Every one of those rallies faded.
MARKET PULSE
S&P 500 futures are up 0.3%. Oil is up 3%. Powell is about to speak at Harvard with no script.
This is the sixth Monday of the war. The S&P has closed higher every one of them. The average Monday gain since February 28 is 3%. Every rally faded by Thursday. Bloomberg's macro strategist said it plainly this morning: without a real breakthrough, this week looks the same.
The weekend brought more escalation. Iran struck the two largest aluminium smelters in the Gulf. LME aluminium jumped 6% to near four-year highs.
Iran turned back Chinese container ships including Cosco vessels, the last major shipping line still using the Strait.
Polymarket now puts a 72% chance of U.S. forces entering Iran by April 30. That is up from 60% last week. Rubio's two-to-four week war estimate came before all of that.
Yields are falling as traders shift from inflation fear to growth fear. German inflation data came in this morning at its highest in over a year and flipped European bonds from gains to losses in the same session. Both remain true at once.
The Signal
The Monday rally is the most predictable trade of the war. Watch whether it holds past Wednesday.
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THE FED'S CREDIBILITY IS THE REAL RISK
Powell speaks at 10:30 with no prepared remarks. Three shocks in five years, pandemic, tariffs, energy, is the kind of pattern that can break public trust in the Fed.
Governor Barr said he is worried another shock could push long-term inflation views higher. The Philadelphia Fed president called those views "a little more fragile." The Michigan survey jumped to 3.8% for one-year inflation last week.
Powell's term ends May 15. His replacement is blocked in the Senate. He is under active criminal review for pressure from the same White House he must operate apart from.
Any comment on rates or Fed freedom lands in a market with no conviction and full sensitivity.
The Rate Signal
Watch the two-year yield while he speaks.
THE HIDDEN RISK IN PRIVATE CREDIT
The four largest private credit funds carry about 25% software exposure.
They report 19%. Blue Owl's real exposure is nearly double what it disclosed. Software firms in these funds carry more debt relative to earnings than any other sector. AI is already hitting public software values hard.
When markdowns come, they will hit portfolios that looked more spread out than they were.
The U.S. Treasury is calling insurance regulators together on private credit this week. Bessent said he does not want retirement accounts turned into a dumping ground for bad assets.
That is the first time the government has named this as a risk to the broader system.
The Credit Signal
The gap between disclosed and real exposure is a pricing event waiting to happen.
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CRYPTO PULSE
Bitcoin is at $67,000, up 1.4% in the Monday relief trade. It has not left the range where it started the war. Global crypto funds broke four weeks of inflows with $414 million out last week.
BlackRock's IBIT lost $201 million in one session on Friday.
Ethereum is now at a net negative $273 million year to date.
Bitfinex long bets hit a 28-month high. That has been a contrary signal for years. The crowd is buying the dip while macro and options data point the other way.
Bitcoin's short-term price is no longer set mainly by people who want bitcoin. ETF managers, risk desks, and options dealers are driving more of the movement now. Their decisions have nothing to do with bitcoin's value as money.
Bitcoin holding $67,000 while ETF money leaves does not mean buyers are confident. It may mean hedging activity is holding the price in place.
The Verdict
The big picture has not improved. The $66,000 floor is the level to watch before the weekend.
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CLOSING LENS
The sixth Monday opened with the same rally as every one before it. What is different is what came over the weekend.
Powell speaks in three hours with no script. Treasury meets with private credit regulators this week. The jobs report lands Friday on a market holiday.
The rally is real. It has faded every time. The question this week is whether the weekend's strikes finally break the pattern before Thursday.
The rally opened. Now we wait.
