Citigroup Upgrades U.S. Stocks and Downgrades Emerging Markets

Posted on April 16, 2026 by Ignacio Teson

Strategists at Citigroup upgraded their rating on U.S. equities, arguing that the current environment of heightened geopolitical uncertainty favors a rotation toward defensive and higher-quality assets.

At the same time, the bank downgraded emerging markets to neutral, citing their vulnerability to energy shocks and a stronger U.S. dollar.

The move, led by strategist Beata Manthey, reflects a tactical adjustment in the bank’s global asset allocation. Citi cut its recommendation on emerging-market equities from overweight to neutral, pointing to risks linked to volatility in global energy prices amid the war in the Middle East and the appreciation of the U.S. currency in international markets.

Strategists acknowledged that a potential peace agreement between Washington and Iran could improve investor confidence. However, they warned that returning to an “ideal” pro-cyclical macroeconomic and trade environment may prove difficult, highlighting the limits of any overly optimistic scenario.

Optimism around the S&P 500

Citi’s shift aligns with a broader trend already highlighted by firms such as BlackRock and Morgan Stanley, which in recent weeks have also pointed to the relative resilience of the U.S. market compared with other regions.

Against that backdrop, the S&P 500 has reached record highs, supported by a temporary ceasefire between the United States and Iran as well as a solid start to the corporate earnings season.

[[SPX-graph]]

Citi described the upgrade as “tactical,” noting that visibility on the macroeconomic and geopolitical outlook remains limited. Even so, the bank projects the S&P 500 could reach 7,700 points by the end of the year, implying roughly 12% upside from Monday’s close.

From a sector perspective, Citi upgraded global materials to overweight and downgraded communication services to underweight. The bank also warned that the growing dominance of the technology sector in global corporate earnings complicates equity market prospects in an environment already shaped by the Middle East conflict.

China Economy Grows 5% Year-on-Year in Q1, Beating Forecasts

Posted on April 16, 2026 by Ignacio Teson

China’s economy expanded 5% year-on-year in the first quarter, according to official data released Thursday, exceeding the 4.8% growth forecast by economists surveyed by Agence France-Presse.

Will tariffs hamper China's economic growth? — Will tariffs hamper China’s economic growth?

The figures come at a time when the global economy is being affected by the war in the Middle East.

China’s economy had grown 4.5% year-on-year in the fourth quarter of 2025. Meanwhile, retail sales—China’s main gauge of consumer demand—slowed more than expected in March, rising only 1.7% from a year earlier, according to the National Bureau of Statistics of China.

Economists surveyed by Bloomberg had expected retail sales to increase 2.4%. Industrial production, however, rose 5.7% year-on-year in March, above the 5.3% forecast, though still below the 6.3% growth recorded in January and February.

China warns of a “complex and volatile” environment

Mao Shengyong, deputy director of the National Bureau of Statistics, warned that the international environment will remain “complex and volatile” in the coming period, citing growing uncertainty and hard-to-predict risks, particularly stemming from the war involving Iran and its effects on financial markets and the global outlook.

Similarly, Zhou Hao, analyst at Guotai Haitong Securities, said the manufacturing sector remains a key pillar of short-term growth, though he expects policymakers to increasingly focus on boosting domestic demand and reflation.

The challenge for authorities remains significant: even China is not immune to rising energy and transportation costs, which are eroding purchasing power and weighing on economic momentum.

From the private sector, Peng Xin, director of an industrial firm in southern China, described the impact of the crisis. Volatility in energy prices has turned each transaction into a new negotiation, while customers are accelerating purchases and building inventories in anticipation of further price increases.

“If someone used to buy five tons, now they may want ten,” he said, noting a temporary surge in production and shipments.

Exports slow but remain strong for the quarter

On the external front, exports grew just 2.5% year-on-year in March, a sharp slowdown from the 21.8% surge recorded in January–February, reflecting higher energy and transport costs as well as weaker global demand.

However, exports rose 14.7% year-on-year for the entire quarter, far exceeding the growth recorded in 2025.

For many analysts, this highlights a two-speed economy: a resilient export sector alongside still-weak domestic demand.

At the same time, new signs of pressure are emerging. Factory-gate prices rose in March for the first time in more than three years, suggesting that higher energy costs are beginning to filter through the economy and squeeze corporate margins.

On a quarterly basis, GDP expanded 1.3% between January and March, in line with forecasts, while fixed-asset investment slowed to 1.7%, indicating some moderation after the earlier boost from infrastructure spending.

Hedge Funds Head for Best Month in Over a Decade

Posted on April 16, 2026 by Ignacio Teson

Global Hedge Funds are on track to post their strongest monthly performance in more than a decade, rebounding sharply from the market correction triggered in March by the escalation of the conflict with Iran.

Wall Street Climbs to Records, Fed Cut Bets Grow on Jobs Revision

According to a quarterly report on the hedge fund industry by Goldman Sachs, managers running equity long/short strategies had gained 7.7% month-to-date as of Tuesday, putting them on course for their best monthly result since early 2016, when the bank began tracking the data.

Long/short strategies combine long positions in assets expected to rise with short positions in assets expected to fall, allowing managers to capture opportunities in both bullish and bearish market environments.

So far in 2026, these funds have generated returns of about 6.7%, with a clear advantage for those focused on Asia and China, regions that have recently outperformed other global markets.

Rebound after March’s selloff

The report notes that the broader hedge fund industry, across all strategies, delivered average gains of 1.6% in the first quarter, despite a 1.8% decline in March, when geopolitical volatility hit macro traders particularly hard.

During that period, the war in the Middle East and the surge in oil prices triggered sharp moves in bonds, equities and currencies, affecting multiple investment strategies. However, the swift recovery that followed helped restore returns and revive risk appetite across parts of the market.

Record inflows and rising dispersion

Goldman Sachs also highlighted that multi-sector equity long/short funds recorded their largest capital inflows since 2022 during the quarter.

The data suggests that institutional investors and limited partners continue to favor active managers even in a challenging environment marked by recent volatility.

Another notable development was the increase in performance dispersion among individual funds, which reached a three-year high in March. This widening gap between winners and losers is typical of more volatile markets with less uniform direction.

Where returns were strongest

Among the top-performing strategies in the quarter were market-neutral funds, which gained 10.3%. These vehicles aim to minimize exposure to the overall direction of the market while capturing relative value opportunities between assets.

Strong results were also recorded by healthcare-focused funds, which delivered returns of 33.6%, and Asia-focused funds, which rose 28.1%.

According to Goldman Sachs, much of these gains came from “alpha” generation—profits derived from asset selection and trading skill rather than simply from the broader market rally.

S&P 500 and Nasdaq Reach Record Highs on U.S.–Iran Talks

Posted on April 15, 2026 by Ignacio Teson

The S&P 500 and the Nasdaq Composite reached new record highs on Wednesday, April 15, as investors grew more optimistic about renewed negotiations between the United States and Iran, alongside a fresh batch of corporate earnings.

Despite recent volatility caused by the war in the Middle East and the effective closure of the Strait of Hormuz, U.S. equities maintained their broader upward momentum.

In this context, the Dow Jones Industrial Average slipped 0.2% to 48,463.72 points, while the S&P 500 gained 0.8% to 7,022.81, and the Nasdaq Composite climbed 1.6% to 24,016.02.

[[SPX-graph]]

Trump says war with Iran may be nearing its end

Donald Trump suggested that the conflict between the United States and Iran could be approaching an end, even as the U.S. military said an ongoing naval blockade continues to restrict maritime traffic to and from Iran.

Speaking to Sky News in the United Kingdom, Trump said it was “very possible” that a permanent ceasefire agreement could be reached before the visit of King Charles III later this month.

Earlier, Trump told Fox News that the conflict—triggered by joint attacks by the United States and Israel against Iran in late February—was “close to ending.”

According to a report by New York Post, the U.S. president expects ceasefire talks between Washington and Tehran to resume within the next two days following the first round of negotiations held in Pakistan last weekend.

Trump repeatedly argued that the fighting is nearing its conclusion and that the United States has achieved its objectives in Iran, including curbing Tehran’s nuclear ambitions and weakening its military capabilities, claims largely rejected by Iran.

Meanwhile, Associated Press reported that mediators are making progress toward extending the ceasefire, with both sides expected to return to the negotiating table soon.

According to the report, mediators are working on compromises around three major sticking points: Iran’s nuclear program, the reopening of the Strait of Hormuz, and war compensation.

Oil prices fluctuated on Wednesday but remained well below the $100-per-barrel threshold, as traders closely monitored supply flows through the Persian Gulf, particularly the strategic Strait of Hormuz.

Key stock movers

Shares of Tesla surged 7.6% after CEO Elon Musk announced that the company’s chip design team had completed the “tape-out” of its AI5 chip.
The news also lifted several quantum computing stocks. D-Wave Quantum jumped 22.6%, Infleqtion rose 6.2%, Rigetti Computing advanced 12.2%, and Quantum Computing Inc. gained 16%.
Nike shares climbed 1.9% following insider purchases by Tim Cook, CEO of Apple, and Nike’s own CEO Elliott Hill.
Meanwhile, Papa John’s International rose 5.6% after a report by Reuters indicated that the pizza chain is in advanced talks over a potential acquisition that could take the company private.

Bank of Japan Weighs Interest Rate Hike to 31-Year High

Posted on April 15, 2026 by Ignacio Teson

The Bank of Japan (BoJ) is approaching its upcoming two-day policy meeting amid heightened uncertainty, as the war in the Middle East clouds the outlook for Japan’s economy—particularly given the country’s heavy reliance on energy imports that transit through the Strait of Hormuz.

Until recently, investors widely expected the central bank to raise interest rates to 1%, which would mark the highest level in 31 years. However, recent comments from BoJ officials have cooled those expectations.

BoJ Deputy Governor Ryozo Himino said Friday that the central bank will calibrate monetary policy based on the scale and duration of the economic impact caused by the Middle East conflict. He emphasized the need to remain vigilant about the risk of stagflation.

Meanwhile, remarks on Monday from BoJ Governor Kazuo Ueda underscored the uncertainty surrounding the potential trajectory of the conflict. Ueda offered no clear signals of an imminent rate hike, which contrasts with previous tightening moves, when the governor hinted at policy changes weeks in advance.

Shifting forecasts

Still, policymakers may revise their inflation outlook upward during the BoJ’s policy meeting scheduled for April 27–28, as oil prices have surged roughly 50% since the start of the conflict, according to Bloomberg, citing sources familiar with the matter.

At the same time, officials could lower their economic growth projections, reflecting the vulnerability of Japan’s economy to higher energy costs.

IMF calls for gradual tightening

The International Monetary Fund (IMF) expects the Bank of Japan to continue gradually raising interest rates, though at a slightly faster pace than projected six months ago, according to its latest World Economic Outlook.

The IMF forecasts that inflation in Japan will moderate this year and converge toward the BoJ’s 2% target by the end of 2027, as food and commodity prices ease.

It also expects the policy rate to gradually rise toward a neutral level of around 1.5%, slightly faster than projected in October 2025.

BlackRock’s Assets Under Management Jump 20% to $14 Trillion

Posted on April 15, 2026 by Ignacio Teson

The asset management giant BlackRock, led by Larry Fink, once again demonstrated its strength in the first quarter of 2026, driven largely by a key metric behind its performance: record assets under management (AUM).

BlackRock is the largest asset manager in the world.

The firm ended the quarter with approximately $13.9 trillion in AUM, a figure 20% higher than the same period a year earlier.

The key factor behind this growth was not only scale but also strong capital inflows. During the quarter, the company reported net inflows of about $130 billion, one of the highest levels in recent years.

These inflows partially offset the negative impact of market fluctuations, showing that even during periods of uncertainty, global capital tends to concentrate in the largest asset managers.

ETF business drives growth

Within total AUM, the main engine was the ETF business through iShares, which recorded a record quarter of inflows.

This segment is crucial because it combines scale, low costs and high liquidity, making it one of the most widely used entry points for both institutional and retail investors.

At the same time, BlackRock continues to expand its diversification strategy. Private market assets also posted inflows of roughly $9 billion, reinforcing the firm’s push into higher-margin areas such as private credit and infrastructure.

The combination of traditional and alternative assets allows the company to sustain AUM growth even in challenging market environments.

A resilient business model

Growth in assets is not only a matter of volume but also of business model. BlackRock generates most of its revenue through fees on managed assets, meaning that higher AUM translates directly into greater recurring and predictable income.

Indeed, the company reported a 27% increase in revenue and a 17% rise in profits, driven by higher management fees and performance fees. Revenue reached $6.7 billion, while net income totaled about $2.07 billion.

“Our results tell a story that goes beyond a single quarter,” Fink said. “They reflect a business with growing momentum, strong client relationships and a platform designed to grow sustainably across different market environments.”

“BlackRock operates at scale across public markets, private markets and technology. That combination is becoming increasingly valuable. Capital is on the move as investors reassess market fundamentals and provider relationships, and BlackRock is positioned as a trusted destination,” he added.

Following the announcement, BlackRock shares rose about 3% on the New York Stock Exchange.

Donald Trump Threatens to Fire Jerome Powell if He Refuses to Step Down

Posted on April 15, 2026 by Ignacio Teson

The head of the U.S. central bank said he could remain in a leadership role at the institution that sets interest rates if the investigation against him continues.

Trump is seeking to remove Chair Powell.

Donald Trump again threatened to dismiss Jerome Powell, chair of the Federal Reserve, if he decides to stay on the central bank’s board once his term expires next month.

During a television interview, Trump was reminded that Powell has indicated he may remain in his position while an investigation into him remains unresolved. “Well, then I’ll have to fire him?” Trump responded.

Powell has said he could continue serving as chair of the committee that sets U.S. interest rates after his current term ends if no successor is confirmed. He also suggested he might remain in the role longer if the investigation continues.

A new chapter in the clash between Trump and the Fed chair

Trump has spent months pushing to remove Powell as head of the Fed, arguing that the central bank has been too slow to cut interest rates in order to stimulate the U.S. economy.

The president nominated former Fed official Kevin Warsh to succeed Powell. However, Warsh’s confirmation has been delayed due to a Department of Justice investigation into remarks Powell made before the U.S. Senate Banking Committee in June regarding the renovation of the Fed’s headquarters.

Thom Tillis, a Republican senator from North Carolina, has said he will not vote to confirm any nominee until the investigation is resolved.

Bitcoin Holds Above $74,000 Amid United States–Iran Diplomatic Efforts

Posted on April 14, 2026 by Ignacio Teson

Cryptocurrency markets are trading higher on Monday as investors focus on developments in the war in the Middle East. In this context, Bitcoin (BTC) rose about 1% to trade above $74,034, according to Binance.

Bitcoin appears to be stuck in a tight trading range.

Meanwhile, Ethereum (ETH) climbed 2.5% to $2,318. Among major altcoins, gains were led by BNB (+1.1%) and TRON (+0.9%), while Hyperliquid fell 1.4%.

[[BTC/USD-graph]]

Signals from Trump on a potential deal with Iran

Donald Trump, president of the United States, said Monday that Iran wants to reach an agreement but stressed that Washington will not accept a deal allowing Tehran to possess nuclear weapons.

Trump said negotiations have stalled over nuclear issues and confirmed that a “blockade” of vessels transiting the Strait of Hormuz had begun.

He also said Iran “called this morning” and indicated that the country would like to reach an agreement. Reuters was unable to immediately verify the claim.

“Iran will not have nuclear weapons,” Trump told reporters at the White House. “We cannot allow a country to blackmail or extort the world.”

Risk appetite supports crypto markets

The diplomatic signals have supported cryptocurrencies. Bitcoin has reached a one-month high, tracking a broader rebound across global markets.

Investor sentiment was also boosted by a pullback in oil prices, which fell below $100 per barrel, easing some geopolitical risk concerns.

Short covering also contributed to the move, as traders unwound bearish positions while prices were rising, amplifying the upward momentum.

Bitcoin received additional support from Strategy Inc., which said Monday it purchased 13,927 bitcoins for roughly $1 billion last week, partly financed through the sale of preferred shares, according to a filing with the U.S. Securities and Exchange Commission.

United States Accuses China of Hoarding Oil and Restricting Exports

Posted on April 14, 2026 by Ignacio Teson

Washington has questioned Beijing’s role in the global energy market, warning that its actions could disrupt supply—particularly across Asia.

Trump and Xi are quietly competing in the world stage.

The United States has accused China of acting as an unreliable partner amid the war in the Middle East by accumulating large oil reserves while limiting exports. According to U.S. officials, the strategy is distorting global markets and increasing pressure on international energy supplies.

Scott Bessent, the U.S. Treasury Secretary, said Beijing’s actions reflect a pattern seen during the pandemic, when the country “stockpiled medical supplies” at a time of strong global demand. This time, he said, the focus is on oil and restrictions on certain key products.

“China has been an unreliable global partner; they hold a strategic petroleum reserve of roughly 1.2 to 1.3 billion barrels,” Bessent told reporters, adding that he has already discussed the issue with Chinese officials.

Oil stockpiling and trade restrictions

According to the Treasury chief, China has not only increased its reserves but is also continuing to buy crude oil on international markets while reducing exports. He warned that such behavior could disrupt global trade balances at a time of heightened sensitivity due to the Middle East conflict.

Bessent noted that the main impact of these policies is likely to be felt in Asia, rather than in the United States, as many countries in the region depend more heavily on imported energy and could face greater challenges in the event of supply shortages.

Impact on bilateral relations

When asked whether the tensions could affect a planned visit by President Donald Trump to Beijing later this month, Bessent declined to give a definitive answer but sought to emphasize stability in the relationship between the two powers.

“I think the message of the visit is stability. We have had significant stability in the relationship since last summer; that stability comes from the top down,” he said. “Communication is the key.”

The remarks highlight a new source of friction in global markets, as the conflict in the Middle East continues to influence not only the military landscape but also economic and trade dynamics worldwide.

China’s Trade Surplus Hits 13-Month Low Amid Iran Conflict

Posted on April 14, 2026 by Ignacio Teson

A sharp slowdown in exports combined with a surge in import prices pushed China’s trade surplus to its lowest level since March last year.

China has begun to feel the impact of the war in the Middle East and new U.S. tariff barriers on its economy. The country’s trade surplus in March fell to a 13-month low, driven by a pronounced deceleration in exports and a strong increase in the cost of imports. Still, analysts noted that the surplus for the first quarter of 2026 was the highest in four years.

The data surprised market analysts. Export growth had been expected at 8.3%, but came in at only 2.5%. The opposite trend appeared on the import side: economists had projected an 11.1% increase, yet imports surged 27.8%.

As a result, the trade surplus totaled about $51.13 billion, less than half the expected level and the lowest figure since March 2025.

Zichun Huang, economist at Capital Economics, acknowledged that “exports slowed last month and fell short of expectations, but this appears largely due to seasonal factors.” She added that export growth in the first quarter reached its highest level in four years.

Meanwhile, Lynn Song, economist at ING Group, said the surge in imports was mainly due to higher prices for high-tech goods.

As an example, he noted that China’s semiconductor imports rose 11% year-on-year in volume so far this year, but increased 45% in value, reflecting a sharp rise in prices.

Iran war and the impact on China

Analysts also noted that the impact of the war in Iran and the rise in global oil prices has not yet been fully reflected in the data.

China’s crude oil imports increased 8.9% year-on-year in volume, but their value fell 4.7%, while natural gas imports declined 4% in volume and 15.4% in value.

“It is likely that rising energy prices will push import values even higher in the coming months,” Song said. While stronger imports could help ease trade tensions with China’s partners, he warned that they may reduce the contribution of exports to economic growth.

Exports remain a key pillar of China’s economic expansion. According to a survey by Reuters, the country’s GDP is expected to have grown 4.8% year-on-year in the first quarter, a slight acceleration from the 4.5% growth recorded in the final quarter of 2025. The official figure is due to be released tomorrow.

Huang, however, remained optimistic, saying that despite the surge in energy prices, exports should remain solid in the coming quarters, supported by strong demand for semiconductors and green technologies.