April 20, 2026
Things in the Persian Gulf region remain unstable, with Iran opening the Strait of Hormuz on
Friday and closing it again on Saturday. At this moment, it remains closed. Oil prices are rising
on the news from the weekend, and stock prices opened lower.
But if you look at the trend of equity markets over time, stock prices rise. Why is the historical
trend of stocks perpetually upward? Inflation, of course, is a major factor. Inflation is caused by
too much money chasing too few goods, and if we consider shares of stock as the “goods”, then
it is significant that since the late 1990s, “the number of publicly traded companies has fallen by
more than half” according to The Washington Post. There are certainly not fewer companies,
but there are fewer PUBLIC companies. Many company founders are choosing to work with
private investors rather than undergo the scrutiny and regulations that come with going public.
All of which may explain to some extent why, in the middle off a war, the major stock indices hit
record highs last Wednesday. Some investors are buying stocks that profit from war, some
investors are buying stocks that profit from a hoped-for peace, and all investors are chasing
fewer available shares than we saw in the ‘90s.
Bond yields have risen during the war, reflecting speculation that scarce oil will cause inflation,
and inflation will cause the Federal Reserve to raise rates. On the day before the war was
declared in February, the ten-year Treasury Note was paying 3.96%. Today it is paying 4.20%.
The’s a six percent rise in less than two months.
And speaking of the Fed, the released minutes of the most recent Fed Open Market Committee
meeting showed (according to Schwab) that there is a growing consensus among the FOMC
governors that rate hikes sometime this year could be required to tame inflation. The next
FOMC meeting is next week.
The Producer Price Index for March was released last week, and showed that prices for final
demand (the prices that producers receive from consumers who buy their goods) rose 4% over
the past year. That is the highest reading since the covid-era inflation of three years ago.
The closed Strait of Hormuz is making oil shipments scarce, but Saudi Arabia and the United
Arab Emirates cleverly planned for this eventuality already. They built back-up pipelines that can
carry seven million barrels per day in Saudi Arabia and 1.5 million barrels in the UAE. You could
also say that the U.S. was looking ahead when it developed new oil fields and new technology
to retrieve the oil. We are now a net exporter of oil, none of which has to be shipped through the
Strait of Hormuz.
Powerball, beloved of lottery gamblers, is now expanding. Going forward, it will be possible to
buy Powerball tickets in England, Scotland, and other parts of the United Kingdom. This move is
meant to increase the size of jackpots, and of course the pool of players who are not me, or as I
like to them of them, enemies.
Amazon is expanding its new-car buying program to include Jeep, Chevrolet, and other brands.
The car market in the U.S. is worth about $1.3 TRILLION annually, and Amazon wants in. It
started the program with just Hyundai, and now is offering cars in over 130 cities. The program
allows buyers to access the inventories of local dealerships and complete their purchases online. Dealerships pay Amazon to participate. No word on whether you can return your new car
at your local Kohl’s.
Allbirds (in full transparency, let me say I own a very comfortable pair in green) has sold its shoe
business and has announced that it is planning to become an AI company. Its stock rose 350%
last week. In a related story, the Girl Scouts have sold their cookie business and in the future
will be selling Cloud Storage. Only one of these stories is false!
For the week ending on April 17th, the Dow Jones Industrials finished at 49,447, the Standard &
Poor’s 500 at 7,126, and the Nasdaq Composite at 24,468. The yield on the ten-year Treasury
Note was 4.248%. WTI crude oil cost $86.92 per barrel, while Brent crude cost $94.91 per
barrel. N.Y. gold cost $4,780 per ounce, and one Euro was worth $1.18.
Elizabeth E. Cook
Partner, Diastole Wealth Management
News and information presented here was gathered from sources believed, but not guaranteed,
to be reliable, including (but not limited to) Yahoo Finance, Barron’s, The Wall Street Journal,
CNBC, Bloomberg and Bloomberg Business Week, CNN, The Washington Post, Axios, The
Bureau of Labor Statistics, Charles Schwab, ABC News, Morning Brew, USA Today, Reuters,
CBS, and The AP. If you have questions, please call Diastole at 203.458.5220, or email me, Liz
Cook, at ecook@dwinvest.com. Thank you for reading.
Christie’s Auction House in Paris sold 120,000 tickets at 100 euros apiece, for a raffle of a
Picasso painting. The prior owner of the painting received one million euros – the approximate
value of the painting, while the excess 11 million euros were donated to Alzheimer’s research. A
Parisian software engineer held the winning ticket. My winning ticket. Apparently you can’t win if
you don’t play.