*****************************************************************************
* FIEND'S SUPERBEAR MARKET
REPORT *
* April 17,
2026 *
* *
* e-mail:
fiendbear@fiendbear.com
*
* web
address: http://www.fiendbear.com *
*****************************************************************************
Fiend Commentary
================
Thursday’s
market action looked almost surreal. The S&P 500 and Nasdaq both closed at
fresh records, the VIX slipped back into the high teens, and investors acted as
if the Middle East war was already behind them. Meanwhile oil stayed elevated,
the Strait remained anything but normal, and the Fed’s balance sheet quietly
moved higher again.
That is the
part worth focusing on.
Wall Street
is buying the outcome it wants before the facts fully support it. The market is
behaving as though the war will end soon, shipping will normalize, oil will
drift lower, inflation will settle down, and at some point
later this year the Fed will be able to cut without consequence. That is a lot
of optimism packed into one trade.
The latest
Fed balance sheet report showed total assets rising again, to roughly $6.706
trillion, up about $11.8 billion from the prior week. That is not
“QE” in the old, dramatic sense, but it is another reminder that the balance
sheet is no longer shrinking and is now nudging higher. In a market already
conditioned to believe central banks will ultimately support asset prices, that
matters. It reinforces the idea that liquidity is still quietly being added
even while the Fed publicly talks patience.
At the same
time, the market’s favorite comfort blanket — rate cuts — still doesn’t line up
neatly with the data. Fed officials have been warning that the oil shock is
already feeding inflation pressures, and some are openly talking about rates
staying on hold for a long time. One official, who had previously leaned
dovish, is already scaling back his own cut outlook because inflation has
become “less favorable.” In other words, the market is still hoping for cuts
later this year, but the evidence against cuts in the first half of 2026
remains pretty strong.
That’s why
this rally feels odd. Stocks are surging not because the Fed has changed
course, but because investors are betting the Fed eventually will.
And that’s
where the biggest snag sits: the war may not end on the market’s schedule.
Oil did not
behave like a crisis that was solved. It behaved like a crisis that had been
temporarily pushed out of the headlines. Brent still traded around $99
and WTI around $95 on Thursday — far below the panic highs, but still
much too high for comfort if those levels stick. A few days of hope does not
reopen a shipping lane. It does not lower insurance costs. It does not rebuild
supply chains. It does not erase the inflation impulse that a month of elevated
energy costs can create.
That is the
risk going into late April and spring. The market is already pricing in the
“after” before the “during” is over.
If the
ceasefire actually holds, if shipping resumes in a way
that feels normal, and if oil continues to retreat, then Thursday’s record
highs may prove justified. But if the conflict drags on, or if the Strait
remains only partly functional, then markets are going to discover that they
priced in too much relief too early.
That is what
makes the current setup fragile. It is not the war itself. It is the
possibility that the market’s assumptions about the war’s duration are wrong.
And if that
turns out to be the case, the next leg lower will not just be about
geopolitics. It will be about inflation, policy credibility, and a market that
once again got ahead of itself.
Weekly Market Summary Page
[Return to the Fiend's SuperBear Page]