by Louis Navellier
April 7, 2026
Early last week, President Trump announced the U.S. would “pause” its strikes on Iran’s energy sector for an additional 10 days, to April 6th, so peace negotiations could take place. He said, “Talks are ongoing and, despite erroneous statements to the contrary, by the Fake News Media, and others, they are going very well.” The stock market liked this news at first. On Tuesday, the market surged on reports President Trump could end the war sooner than expected. Iran reportedly allowed some ships through the Strait of Hormuz, but they also demanded payment from some of those ships. A Kuwait oil tanker was on fire from an apparent missile attack, so passage through the Strait of Hormuz remains precarious for now.
Ideally, a cease-fire will emerge soon, and the Strait of Hormuz could reopen permanently after these negotiations. Since the U.S. shut down Iran’s deep-water port on Kharg Island (accounting for about 90% of its crude oil exports), I suspect this will become the primary leverage the U.S. has on Iran, since Kharg Island is where the Iranian Revolutionary Guard Corps gets much of its revenue. It will also be interesting to see if our Marines take control of Iran’s deep-water port on Kharg Island. In other words, the “fog of war” persists, while global energy economic issues are becoming the primary reason to implement a cease-fire.
Then, in the president’s nationwide address last Wednesday, he said U.S. military objectives would be completed “very shortly,” but if not, he vowed to hit Iran “extremely hard” and bring the country “back to the stone ages,” which caused crude oil prices to soar, but President Trump said, “Gas prices will rapidly come back down, and stock prices will rapidly go back up” after the U.S. operations in Iran conclude.
Last Tuesday, Defense Secretary Pete Hegseth said other countries need to “be prepared to stand up” and help reopen the Strait of Hormuz. The Trump administration has been very critical of many European allies (including Austria, Britain, France, Italy and Spain) for restrictions on using their military bases and air space, but the UAE is preparing to help the U.S. and its allies to open the Strait of Hormuz by force.
It is safe to say President Trump wants lower crude oil prices going into the mid-term elections, so he will continue to strive to reopen the Strait of Hormuz. It is also imperative we see fertilizer shipments resume, since food prices are expected to remain high if fertilizer cannot boost crop yields during planting season.
Despite America’s energy independence, California is becoming increasingly dependent on imported gasoline from India and South Korea due to its policy of ongoing refinery shutdowns, plus a major pipeline shutdown between Bakersfield and San Pablo Bay. In fact, $8 per gallon gasoline in California is now possible due to the Valero refinery in Benicia shutting down in April, plus the seasonal switch to more expensive summer fuel blends. So ironically, California is becoming more dependent on crude oil from the Middle East, since there are no U.S. pipelines into the Golden State from refineries in Montana, Texas or other states. (Imports of petroleum products to California declined by 26% in the past week).
There are no guarantees during this “fog of war,” and a lot of things can go wrong, so many investors want to remain “on the sidelines” until some war tensions are resolved – but don’t wait too long. We have seen stock markets surge very rapidly when threats of more war diminish. For the time being, the biggest glitch is seeing food and energy inflation soaring, based on the Producer Price Index (PPI), creating the highest imported prices in four years. The March figures for food and energy inflation (released April 10 and 14) are expected to be hideous, as many economists anticipate a 4% annual pace of inflation. This has already influenced Treasury yields after lackluster bid-to-cover ratios at Treasury auctions. Due to this inflation bubble and higher Treasury yields, hopes for more Fed rate cuts have been shelved.
This temporary closure of the Strait of Hormuz hurts Europe, India and Asia far more than the U.S., but if the Strait of Hormuz reopens, I expect global energy prices to decline as a worldwide glut of crude oil re-emerges. Even China needs the U.S. to reopen the Strait of Hormuz, since China gets 80% of its crude oil from the Middle East. The U.S. is increasingly in control of global energy supplies due to its dominance in LNG, refined products and crude oil. Furthermore, the U.S. now has more influence on the major Caribbean, North American and Middle Eastern energy producers. Also, with Asia, Europe and India needing the U.S. and its allies to keep the Strait of Hormuz open, this should help boost the U.S. dollar.
In conclusion, the U.S. remains the premier economic growth engine of the world, so international investors will likely continue to gravitate to the U.S. due to its stronger GDP growth as well as a stronger U.S. dollar. Even if the Trump administration cuts a cease-fire deal with the IRGC, Israel is anticipated to continue to eradicate its most notorious commanders. Furthermore, the IRGC did a good job of ruining relations with its close neighbors in the Middle East, who also may try to eliminate IRGC commanders.
I know a lot of Persians who now live in the U.S., and I can tell you they were excited about President Trump’s call to the Iranian people to rise up and take control of its government. I realize war may reignite if negotiations fail, but the long-term future for the IRGC is poor, since they have no allies in the world.
If this war ends fairly soon, my prediction of 5% GDP growth may occur as soon as the second quarter due to booming U.S. energy and gold exports, which continue to shrink the trade deficit. A shrinking trade deficit and productivity gains, thanks to AI, alone are enough to generate 4% annual GDP growth.
Friday’s Jobs Report Indicates a Strong U.S. Economy
Last Wednesday, ADP reported 62,000 private payroll jobs added in March – much higher than the economists’ consensus expectation of 40,000. These gains were dominated by small businesses (those with fewer than 50 employees) creating 85,000 jobs, while bigger firms lost 23,000 jobs. The end of the Kaiser Permanente healthcare strike added over 30,000 workers, as education and healthcare accounted for 58,000 new jobs. Construction added 30,000 jobs, likely due to the advent of better spring weather. The biggest drag came from trade, transportation and utilities, which accounted for 58,000 net job losses.
Then came the Friday bombshell. Even though the stock market was closed on Good Friday, the bond market was open, and the Labor Department reported a whopping 178,000 new jobs created in March. This was triple the economists’ consensus estimate of 59,000. The unemployment rate also declined to 4.3%, down from 4.4% in February. For the previous two months, however, the February payroll report was revised to a 133,000 job loss (vs. 92,000 first reported) and the January payroll report was revised up to 160,000, from 126,000 previously reported – so these two revisions basically offset each other.
The Labor Department said healthcare jobs rose by 76,000, and construction jobs increased by 26,000, while transportation/warehousing jobs rose by 21,000. Average hourly earnings rose by 0.2% or 5 cents to $32.07 per hour in March and 3.5% in the past 12 months. Overall, Treasury yields rose after the jobs report, so any Fed cuts will likely be postponed, since any fears of a weak job market are now fading.
In other economic news, the Commerce Department announced retail sales rose 0.6% in February, which was higher than the economists’ consensus estimate of a 0.5% increase. Core retail sales, excluding autos, building materials, food and gasoline, rose 0.5% in February, an improvement over a 0.2% increase in January. Auto sales rose 1.2%, a good sign consumers are buying more durable goods, and ten of the 13 categories surveyed reported an increase in February, so this was a very encouraging retail sales report.
Speaking of GDP growth, the Commerce Department reported the U.S. trade deficit rose 4.9% in February to $57.3 billion, less than the economists’ consensus estimate of $62 billion. Specifically, exports rose by 4.2% to $314.8 billion, while imports rose by 4.3% to $372.1 billion. Since energy prices soared in March, it is possible the U.S. trade deficit shrank dramatically in March from booming exports. In fact, during his national address last Wednesday, President Trump reminded the world they could buy crude oil, LNG and refined energy products from the U.S., since we have a large production surplus.
The other good news is the Conference Board announced on Tuesday its consumer confidence index rose to 91.8 in March, up from 91.0 in February. The “present situation” component surged to 123.3, up from 118.7 in February. The “expectations” component declined to 70.9 in March, down from February’s 72.6.
The weather significantly improved in March, helping lift consumer sentiment. The Atlanta Fed now estimates first quarter GDP growth at a 1.9% annual pace, but this may be revised higher in the wake of stronger-than-expected retail sales, smaller-than-expected trade deficit, and other positive economic data.
To round out this list of positive economic news releases, the Institute of Supply Management (ISM) announced on Wednesday its manufacturing index rose to 52.7 in March, up from 52.4 in February, the third straight monthly increase in the ISM manufacturing index. Also, any reading above 50 signals an expansion. Especially encouraging is the production component, rising to 55.1 in March, up from 53.5 in February. The “price” component surged to 78.3 in March, up from 70.5 in February, which signals raw material inflation. In fact, in the past two months, the prices component has risen 19.3 points to its highest level since June of 2022, and 13 of the 16 industries ISM surveyed reported an expansion in March.
Finally, to update the private credit crisis I have been warning you about, according to the Financial Times, the private credit firm Blue Owl has been hit with 40.7% in redemption requests from its Blue Owl Technology Income Corp fund. Another Blue Owl fund, the Blue Owl Credit Income Corp., has been hit with 21.9% in redemption requests. But for now, Blue Owl is sticking to its 5% redemption limit.
KKR, Ares Management, Apollo and BlackRock are also imposing redemption limits. This anxiety over private credit will likely persist, but at this time it appears the industry will continue to avoid investor defaults, as this could deleverage the entire $3 trillion private credit industry. In the event of a private credit default, the Fed may need to step in and slash key interest rates, since banks are big private credit investors. This is why my portfolios have virtually no exposure to private credit or banking stocks.
We are lucky to live in America and not be dependent on much of the rest of the world. Small and mid-capitalization companies are mostly domestic and immune to global distractions. Since about half of the S&P 500’s revenues emanate from outside the U.S., our domestic, small and mid-cap stocks should benefit from institutional investors allocating more money to our fundamentally superior stocks.
Navellier & Associates; do not own BlackRock Inc (BLK), KKR (KKR), Ares Capital Corp (ARCC), Apollo Global Management (APO), and Blue Owl (OWL). Louis Navellier does not own BlackRock Inc (BLK), KKR (KKR), Ares Capital Corp (ARCC), Apollo Global Management (APO), and Blue Owl (OWL).
All content above represents the opinion of Louis Navellier of Navellier & Associates, Inc.
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Louis Navellier is Founder, Chairman of the Board, Chief Investment Officer and Chief Compliance Officer of Navellier & Associates, Inc., located in Reno, Nevada. With decades of experience translating what had been purely academic techniques into real market applications, he believes that disciplined, quantitative analysis can select stocks that will significantly outperform the overall market. All content in this “A Look Ahead” section of Market Mail represents the opinion of Louis Navellier of Navellier & Associates, Inc.
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