Why Markets Are Holding Up | Macro Mondays w/ Andreas Steno & Mikkel Rosenvold | April 6, 2026

Key Concepts

• Strait of Hormuz: A critical maritime chokepoint for global oil transit, currently the focus of geopolitical tension and supply chain disruptions.
• Exogenous Shock: An unexpected external event (e.g., war, geopolitical crisis) that impacts the economy and financial markets.
• Rate of Change: The speed at which a situation (like oil flow or market sentiment) is improving or deteriorating, often more important for market pricing than the absolute state of the crisis.
• Artificial Stupidity: A term used by the speakers to describe the tendency of LLMs (Large Language Models) to hallucinate or provide inaccurate analysis when asked to interpret complex, unprecedented geopolitical events.
• Fauci Syndrome: A metaphor for experts or pundits who become so invested in a "doomsday" narrative that they struggle to pivot their analysis even when data suggests the situation is improving.

---

1. Geopolitical Landscape and Market Impact

The discussion centers on the ongoing tensions in the Middle East, specifically the "Power Plant and Bridge Day" deadline set by Donald Trump regarding Iran. The speakers argue that while the threat of escalation is real, the market is beginning to look past the immediate volatility.

• The "Culmination Point": There is a building consensus that the conflict is reaching a critical juncture. While the US is increasing its military presence, the speakers suggest this may be a tactic to maximize leverage for a ceasefire rather than a precursor to total war.
• Bilateral Deals: A significant development is the emergence of non-US-led agreements, such as the Iran-Iraq oil flow deal, which helps mitigate the impact of the Strait of Hormuz blockade.
• US-Europe Relations: The speakers note a widening rift between the US and Europe, driven by differing strategic priorities (the US focusing on China, Europe on Russia) and the US directive for Europe to secure its own energy supplies.

2. Oil Market Dynamics

Despite the "doomsday" narratives prevalent in media, the speakers present a contrarian view on oil supply:

• Mitigation Strategies: Approximately two-thirds of the oil flow previously passing through the Strait of Hormuz has been rerouted via pipelines or storage releases.
• Sequential Progress: The number of ships passing through the Strait is slowly increasing (e.g., 16–21 ships per day). While this is only 10–15% of pre-war levels, the positive rate of change is a bullish signal for equity markets.
• The "Nothing Burger" Fallacy: The speakers debunk claims that the disruption of sulfur shipments will cause a catastrophic collapse in copper or semiconductor production, labeling these predictions as hallucinations generated by AI tools lacking historical context.

3. Business Cycle and Central Bank Policy

• US Resilience: The US economy is viewed as having low sensitivity to energy price shocks due to its status as a net energy exporter. Consequently, the current crisis is seen as a "nothing burger" for the US business cycle compared to the significant impact on Europe and Asia.
• Central Bank Strategy: The speakers argue that central banks should remain passive during supply-side shocks. Because interest rate hikes take 9–15 months to impact the economy, they are an inefficient tool for managing a short-term energy crisis that may be resolved long before the policy takes effect.

4. Notable Quotes

• On Market Predictions: "Sometimes maybe good, sometimes maybe [expletive]." (Attributed to the speakers, referencing the difficulty of accurate forecasting).
• On AI Analysis: "Once you see an exogenous shock... artificial intelligence becomes artificial stupidity." — Andreas
• On Geopolitical Punditry: "It was very difficult for [Fauci] to pivot because he got a lot of air time out of his doom porn." — Andreas

5. Synthesis and Conclusion

The main takeaway is that the market is currently in a transition phase similar to the spring of 2020. While short-term risks—such as potential infrastructure attacks in Iran—remain, the medium-term outlook is improving as supply chains adapt and bilateral deals bypass traditional chokepoints. The speakers advise investors to focus on the "invisible hand" of market adaptation rather than the alarmist rhetoric of geopolitical pundits. They remain bullish on US risk assets relative to the rest of the world, anticipating a potential disinflationary wave once the energy crisis moves from a "live" threat to a resolved issue.