Mythos vs Hormuz
April 12, 2026 – Weekly note
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Dominant news is that US/Iran peace talks didn’t produce an agreement.
On Tuesday, April 7, as Trump pulled back threats to wipe out Iranian civilization, SPX closed at 6617. Two days later, on Thursday, SPX was up 3.1% to 6824. On the rally, VIX plunged from 25.78 on Tuesday to 19.49 on Thursday, ending the week at 19.23 (nearing the Feb 25 low of 17.93, before the attacks on Iran).
SPX 200 DMA is 6662. A return to levels of early last week would leave an island top which would likely cap prices for the intermediate term. Closing below the 200 DMA would be negative.
MOVE index has also continued to fall. By March 26 it had surged to 115, but ended the week at 72.15. The low of this year was set in January at 55.77, which hadn’t been seen since late 2021, before the hiking cycle started. Friday’s close is lower than all levels from early 2022 to mid-2025.
Front month WTI fell nearly 15 dollars on the week, from 111.54 to 96.57. However, CLM6 was only down 8.46, from 98.04 to 89.58. In any case, last week’s price action in bonds doesn’t particularly signal inflationary fears: MOVE lower, 10y breakeven well-behaved, ending the week at 238 bps. Obviously conditions are subject to violent changes (making both MOVE and VIX seem cheap as of Friday).
The other key, and likely disinflationary, bit of news was related to Anthropic’s Mythos. Bessent and Powell summoned banking heads to discuss risks related to this particular AI model. From CBS news:
The company, the developer behind the Claude AI chatbot, said in a post on its website this week that the new tool has already uncovered thousands of weak points in “every major operating system and web browser.”
In a hopefully unrelated news item, Kraken Financial was granted a Federal Reserve master account in early March, “…the first digital asset bank to gain direct access to the Fed’s payment infrastructure.”
Jim Bianco has cited the damage in SaaS, noting that the index was down 11.46% in the last three days of the week. He posted the top 10 stocks in terms of weight. I have added the declines over the past week. In a week when the SPX rose 3.6%, every stock below was down except for APP.
1PANW (Palo Alto Networks)4.69% -4.65%
2CRWD (CrowdStrike)4.44% -5.0%
3PLTR (Palantir)4.35% -13.7%
4SNPS (Synopsys)4.30% -0.9%
5MSFT (Microsoft)4.20% -0.6%
6CRM (Salesforce)4.11% -11.9%
7ADBE (Adobe)4.04% -7.2%
8INTU (Intuit)3.99% -16.9%
9NOW (ServiceNow)3.92% -18.6%
10 APP (AppLovin)3.73% +1.3%
Last week’s UofMich Consumer Sentiment number was the lowest ever at 47.6. In the K economy, it’s the upper echelon that supports aggregate consumer spending. I would argue that tech equity values are the primary pillar, and data related to AI vulnerabilities (as above) undermines the top spenders.
US ten-yr yield ended little changed on the week at 4.315%. (High of hiking cycle was 4.99% in 2023). However, new high in 10y JGB 2.428%. Started 2025 around 1.10. Last time here was 1997. 2y Japan yield also at a new high 1.395%, suggesting a BOJ hike at month’s end. German 10y bund at 3.056% remains pinned to its highest yield level since 2011
Beige Book released on US Tax Day, April 15.
| 4/2/2026 | 4/9/2026 | chg | ||
| UST 2Y | 379.4 | 379.9 | 0.5 | |
| UST 5Y | 394.5 | 393.9 | -0.6 | |
| UST 10Y | 430.7 | 431.5 | 0.8 | |
| UST 30Y | 488.4 | 491.2 | 2.8 | |
| GERM 2Y | 261.2 | 259.8 | -1.4 | |
| GERM 10Y | 299.1 | 305.6 | 6.5 | |
| JPN 20Y | 326.3 | 331.4 | 5.1 | |
| CHINA 10Y | 181.4 | 180.8 | -0.6 | |
| SOFR M6/M7 | -10.5 | -13.5 | -3.0 | |
| SOFR M7/M8 | -9.0 | -9.5 | -0.5 | |
| SOFR M8/M9 | 12.5 | 12.5 | 0.0 | |
| EUR | 115.39 | 117.28 | 1.89 | |
| CRUDE (CLK6) | 111.54 | 96.57 | -14.97 | |
| SPX | 6582.69 | 6816.89 | 234.20 | 3.6% |
| VIX | 23.87 | 19.23 | -4.64 | |
| MOVE | 84.41 | 72.15 | -12.26 | |
