The Machine Moves On
The Strait of Hormuz is not open... Who's in charge in Iran?... The next deadline... Mr. Market is looking ahead... Big banks aren't worried about private markets... Opportunity in the fear...
Conflict still rages in Iran...
The U.S. and Iran remain in a ceasefire... And on Friday, President Donald Trump declared that the key Strait of Hormuz was "open."
Things didn't stay peaceful for long.
For starters, the U.S. blockade of Iranian ships and ports remained in place upon Friday's announcement... Then, some factions of the Iranian military radioed to tankers trying to transit out of the Persian Gulf that they didn't have permission...
And then an Iranian-flagged tanker challenged the U.S. blockade. After reportedly six hours of verbal warnings, the U.S. Navy fired at the ship's engine room and later boarded the vessel.
To top it all off, it's not even clear whether Iran will agree to meet this week with Vice President JD Vance for planned peace talks in Pakistan.
Oil futures moved about 6% higher today as the next steps in the war remain unclear.
A war within a war?...
The headlines are coming and going so fast, and we won't get too much into battlefield analysis. But with supply chains for the world's energy and other commodities in the crosshairs, I (Corey McLaughlin) do think some discussion is important...
One critical detail about this war has become clearer given developments over the past 48 to 72 hours...
That is, the question of who is calling the shots in Iran.
There are the parliamentary officials the White House has been talking with in ceasefire negotiations...
There's the Iranian Revolutionary Guard still holding the Strait of Hormuz hostage...
There's the new ayatollah, who has not been seen since the war began...
And then there are the Iranian people, few of whom can keep up with world events due to a national Internet blackout.
The fact that the military hard-liners in Iran aren't relinquishing leverage, and diplomatic negotiations seem to have ground to a halt, could mean U.S. bombs will start dropping again soon... The two-week "ceasefire" expires on Wednesday.
"Lots of bombs start going off," Trump said today, if no new agreement is reached.
For the economy and markets, the thing to know is that this means energy and other commodity prices can remain elevated for longer... And the pace of headline inflation could continue to rise for months down the road.
Still, the market is looking past it all right now...
As oil prices rose again today, the major U.S. stock indexes were mixed. The benchmark S&P 500 Index was down only 0.2%, and the equal-weight version of the S&P 500 was actually slightly up and near an all-time high set last month.
And the small-cap Russell 2000 Index hit a new high today.
It appears Mr. Market believes the conflict will resolve sooner rather than later.
Stansberry Research senior analyst Brett Eversole noted this behavior in the latest edition of the True Wealth newsletter, published on Friday.
Reflecting on the war headlines, Brett posed the question: "What should we make of this back and forth as investors?"
The way he sees it, you can expect one of two paths. One is that the ceasefire will fail and energy-market disruptions get worse, bringing on recession risks. The other is that the parties reach a long-term solution to the war... or at least turn down the heat and stop escalating, easing the economic impacts.
Brett's betting on the latter, as he wrote...
Investors will always fear the worst-case scenario, but it rarely shows up. And I don't expect it this time around, either...
The market is a cold, calculating machine. It worries when it must. But it moves on more quickly than most realize... especially in real time...
Markets move on long before the negative headlines stop.
He pointed out several examples from the past few years alone that remind him of today.
One was the "Liberation Day" panic (just today, the Trump administration began accepting applications for refunds on the tariffs invalidated by the Supreme Court).
Another was the start of the COVID-19 pandemic.
In both cases, stocks initially dipped, then began rebounding before headlines about these stories went away...
Folks never seem to learn, though. And that's fine with us. Because of the recent bout of fear, we have a rare opportunity to buy two of the largest and most important stocks in the U.S. market.
Brett is focused on an investing horizon over the next few years rather than the next few weeks.
And because it looks like the market has moved on from the "worst" about the war, even if the bad headlines continue, he's happy to bet against the herd.
In his April issue, he recommended subscribers buy shares of a pair of AI giants... "We have the chance to buy incredible businesses at incredible prices," Brett wrote. Existing True Wealth subscribers and Stansberry Alliance members can find the details here.
Now, let's take a look at another recent market "worry" we've been tracking...
A look at private credit...
With the major banks reporting earnings last week, we got an update on their exposure to the private-credit funds. These have become a growing market concern over the past few months after reports that some funds were limiting redemptions from investors.
Private-credit firms make direct loans to businesses. And the part that's getting attention lately is that some lenders have sold this debt to individual investors through funds.
Blue Owl Capital (OWL) is an example, as we reported back in February.
But, unlike publicly traded equities, the loans these firms make are illiquid. And with leverage and their own interests at work, when a lot of folks want their money back out of a private-credit fund, the fund doesn't always have enough cash on hand to make everyone whole.
That's why we've seen a lot of private-credit funds cap redemptions at 5% each quarter, despite requests coming in well above that level. As we noted in the March 26 Digest, private-credit loans have been losing their shine among investors...
The trend took off – for a while. Lately, sentiment has reversed.
In the past six months, redemption requests to private-credit funds have tripled.
And this month, the U.S. government looked interested in figuring out just how bad the situation in private credit is. On April 1, the Treasury Department began holding meetings with regulators.
Then, on April 10, Bloomberg reported that the Federal Reserve had begun asking banks to detail their exposure to private credit, looking to see if the "stress" from retail investors' redemptions could spill over into the rest of the financial market.
Banks have nearly $200 billion in private-credit exposure...
Last week, in their respective earnings reports, the country's largest financial institutions disclosed more than $180 billion in exposure to private credit.
JPMorgan Chase (JPM) is at the top with $50 billion, followed by Wells Fargo (WFC) at $36.2 billion, Citigroup (C) at $22 billion, and Morgan Stanley (MS) and Bank of America (BAC), with about $20 billion of exposure each.
Many investors have gotten antsy about private credit's exposure to AI-disrupted industries. But these banks aren't worried yet...
On his company's earnings call, Goldman Sachs (GS) CEO David Solomon said that private credit is still a "very attractive" market for the financial giant. And he added that while there will still be some "noise" from retail investor redemptions, he believes institutional investors understand the risk.
JPMorgan CEO Jamie Dimon said more of the same. On JPMorgan's earnings call, he said that he was "not particularly worried about" losses in private credit. He also said that private-credit funds would need to take very large losses before big banks take any hit.
Wells Fargo put numbers to that sentiment. It said loans to private-equity and private-credit firms would need to fall more than 40% before the bank realized any losses.
Still, further damage isn't out of the question – especially in weaker areas of the industry. Shares of OWL, for example, are down more than 35% this year.
Declines like this can bring opportunity...
In this month's issue of Stansberry's Credit Opportunities, editor Mike DiBiase recommended a bond from a company that he wrote has been unfairly punished over private-equity fears. Subscribers and Stansberry Alliance members can find the details here.
And in the latest issue of his Income Intelligence newsletter, MarketWise CEO Dr. David "Doc" Eifrig just recommended shares of a company in a corner of the private-credit market. It's a business development company ("BDC") that Doc says trades at an unfair discount. As Doc wrote...
It's a classic case of prices diverging from value. It'll take a bit of guts. And there's always risk. But these are the kinds of investments you later kick yourself for missing out on.
It's possible this month's recommendation can rise more than 60%... all while paying us a huge 13% yield.
So there are chances to profit from the fear out there, if you know where to look. The same can be said for the market in general right now.
New 52-week highs (as of 4/17/26): ABB (ABBNY), Advanced Micro Devices (AMD), Arista Networks (ANET), ProShares Ultra Nasdaq Biotechnology (BIB), Alpha Architect 1-3 Month Box Fund (BOXX), Ciena (CIEN), Deluxe (DLX), iShares MSCI Emerging Markets ex China Fund (EMXC), EnerSys (ENS), iShares MSCI Spain Fund (EWP), iShares MSCI South Korea Fund (EWY), Cambria Emerging Shareholder Yield Fund (EYLD), Freeport-McMoRan (FCX), GE Vernova (GEV), Hilton Worldwide (HLT), iShares Convertible Bond Fund (ICVT), KraneShares Bosera MSCI China A 50 Connect Index Fund (KBA), LXP Industrial Trust (LXP), Nucor (NUE), Ryder System (R), Roivant Sciences (ROIV), Roku (ROKU), Twist Bioscience (TWST), Texas Instruments (TXN), Vale (VALE), and State Street SPDR S&P Semiconductor Fund (XSD).
A quiet mailbag today. As always, send your comments and questions to feedback@stansberryresearch.com.
All the best,
Corey McLaughlin and Nick Koziol
Baltimore, Maryland
April 20, 2026