Blain’s Morning Porridge, April 2nd, 2026 – Markets set to be roiled by Trump’s Iran Consequences

“To go into any war without a Plan B is bad decision making. To declare war without Plan A defies logic.”

Oh dear. Last night’s explanation of the War did not go well. What changed except a more unstable and fractured global economy and rising trade, supply chain and conflict risks? When markets are priced for perfection – what happens when reality intrudes. I see bad things arising.

The market reaction to the Presidential Address says it all. Oil Up. Stocks Down. Was last night the moment confidence cracked?

The risk is that US markets are priced for perfection in what is being revealed as a very imperfect global economy. That US markets have remained detached for this long from the rising consequential threats of destabilising recession and inflation – Stagflation –is a function of markets not prepared to believe bad things happen, or that mistakes are made. It’s not just Iran. The market doesn’t seem to haven’t figured out how the end of globalisation, the rise of isolationism, supply-chain disruptions, economic and geopolitical illiteracy, and diminished national credibility are all threats to the over-valued US markets.

(On the other hand, never forget: the market can always stay irrational longer than you can stay solvent!)

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