Morning Note

While, ultimately, we need to be thinking about, and be guided by, the longer-term global macro setup, along the way we have to take the near-term into account as well -- and, if only at the margin, adjust accordingly… Particularly when near-term dynamics could ultimately morph into something consequential for the long-term global macro setup.

We’ve maintained from the get-go that the economic, and, thus, the political ramifications of a protracted Iran war are too dangerous for the powers that be to accept… Which doesn’t mean of course that it can’t happen, it just means that the political incentives and constraints make it a resoundingly undesirable affair.

Hence, among others (see below), this telling headline from this morning:

“Despite high levels of mistrust on both sides, mediators and people familiar with the talks say the two sides have been engaging in ideas that could point to compromise around core issues like Iran's nuclear program - MS Now Reporter.”

Here's you PWAI morning rundown:

PWA Morning Commentary — April 22, 2026, 7:00am PDT

Markets are rallying this morning after President Trump extended the U.S.-Iran ceasefire late last night, backing away from his repeated vow not to prolong the truce. The extension came with a condition — the U.S. will wait for Iran to produce a "unified proposal" before talks proceed — and the relief is real but narrow. The naval blockade of Iranian ports remains in place, an Iranian gunboat fired on a container ship in the Strait of Hormuz within hours of the announcement, and the IRGC seized two additional vessels this morning while issuing statements of peak military readiness on the anniversary of its founding. The ceasefire has been extended; the conflict has not been resolved.

Gold is up over 1.5% this morning, reclaiming yesterday's losses as rate hike fears ease with oil pressure temporarily off. Equities are broadly green — the S&P, Nasdaq, and Dow all up roughly 0.6–0.7% — and bonds are catching a modest bid as well. Our portfolio is reflecting the move constructively across the board, with our international equity positions, energy holdings, and SPX call structure all participating in the morning's relief. We view this as an extension of the ceasefire, not a resolution of the underlying conflict. The structural gaps between the two sides — on uranium enrichment timelines, nuclear stockpile disposition, and the sequencing of the blockade versus Hormuz reopening — remain as wide as they were yesterday. We are not repositioning into this rally. The portfolio was built to participate in upside when risk appetite returns while remaining durable if conditions deteriorate, and this morning is a reasonable illustration of that balance at work.