Markets Shrug Off Blockade: S&P Hits Pre-War Highs, Ibovespa Breaks 198K — PPI at 08:30
Today’s Brazil morning call opens with a market that is learning to live with the war — and pricing it accordingly. This is part of The Rio Times’ daily Brazil Financial Morning Call, covering Latin American financial markets.
Monday was supposed to be a bloodbath. Futures dropped 1%+ overnight after Trump ordered the Hormuz blockade. Instead, the market staged one of the most remarkable intraday reversals of the war. Trump said Iran had contacted the U.S. “to work out a deal,” and the market ran with it. The S&P 500 surged 1.02% to 6,886 — its highest close since the war began on February 28 — erasing the entire conflict’s losses. The Nasdaq jumped 1.23% to 23,184 on a massive software rally after Goldman Sachs CEO Solomon’s comments at the earnings call sparked a 5% rip in the software ETF. The Dow rose 0.63% to 48,218. Goldman posted $5.63 billion in Q1 profit (beat), though FICC revenue missed and shares fell 1.9%. WTI surged to $105 intraday but trimmed to ~$99 by the close as deal hopes surfaced. The Ibovespa broke 198,000 for a fourth consecutive ATH: chart shows C:198,001 (+0.34%), H:198,173, with RSI at 72.51. The USD/BRL held near R$5.03, consolidating its historic strength.
Ed Yardeni captured the shift: markets “may be learning to live with the war in the Middle East, as they have with the war between Ukraine and Russia.” The S&P 500 closed above both its 50-day and 200-day moving averages for the first time since late February. Earnings season kicked off with 12.6% profit growth expected — the sixth consecutive quarter of double-digit growth. The market is telling you the war premium has peaked — even as the blockade begins.
Tuesday’s calendar is loaded: March PPI at 08:30 ET (cons: headline +1.1% MoM / +4.6% YoY; core +0.4% / +4.2%) — the producer-side inflation read that captures oil’s full impact on the supply chain. Eurozone Core CPI (cons: +2.7%). IEA Monthly Report (05:00 ET). Brazil Service Sector (07:00 BRT). NFIB Small Business Optimism (06:00). Fed speakers: Goolsbee (12:10), Barr (12:45), Collins (13:00), Barkin (13:00). Bank earnings continue with JPMorgan, Citigroup, Wells Fargo, and BofA later this week. ECB’s Lagarde speaks (17:00). Argentina CPI (15:00, cons: +3.0% MoM / +32.2% YoY). War Day 45.
Three Things That Matter
| Monday | S&P 500 +1.02% to 6,886 (highest since pre-war, above 50/200-day MAs). Nasdaq +1.23% to 23,184. Dow +0.63% to 48,218. Software ETF (IGV) +5% — best day in a year after Goldman CEO Solomon’s AI comments. Goldman Q1: $5.63B profit (beat), record equities trading revenue, FICC −10% (miss). GS shares −1.9%. WTI $105 intraday → trimmed to ~$99 on Trump deal signal. Brent ~$97. OPEC report showed supply concerns. Blockade activated 10 AM ET — no military incidents. Trump: Iran contacted U.S. “to work out a deal.” Yardeni: markets “learning to live with the war.” S&P 500 forward earnings estimate rose to $339.22. Ibovespa +0.34% to 198,001 (4th ATH). USD/BRL ~R$5.03. BTC $74,338 (−0.15%) |
| Overnight | German WPI surged: +4.1% YoY (prev: 1.2%), MoM +2.7% (vs +0.4% cons) — massive oil pass-through to wholesale prices. Japan industrial production −2.0% (slightly better than −2.1% cons). Japan Economy Watchers already at 42.2 (deep miss). Blockade Day 2 — no confrontation reported. Iran’s military said “security in the Persian Gulf is either for everyone or NO ONE” but no retaliatory action overnight. S&P futures slightly negative (−0.1 to −0.2%). European gas futures remain elevated (+18% since blockade). Oil steady near $98-99 |
| Today | PPI DAY: US PPI (08:30 ET, cons: +1.1% MoM / +4.6% YoY; core +0.4% / +4.2%). Eurozone Core CPI (cons: +2.7%). Spanish CPI (cons: +3.3% YoY). IEA Monthly Report (05:00 — supply/demand under blockade). NFIB Small Business Optimism (06:00, cons: 97.8). BRL Service Sector (07:00 BRT). ADP Weekly Employment (08:15). IMF Meetings Day 2. Fed: Goolsbee (12:10), Barr (12:45), Collins (13:00), Barkin (13:00). ECB: Lane (10:00, 11:30), Lagarde (17:00). BoE: Bailey (12:00), Mann (04:50). Argentina CPI (15:00, cons: 32.2% YoY). API Crude (16:30). War Day 45 |
Where We Left Off MONDAY, APR 13 — SESSION CLOSE
Monday’s intraday reversal was one of the most telling sessions of the entire war. Futures opened −1.1% on the blockade announcement. The Dow dropped 350 points at the open. Oil surged above $105. The script called for a selloff. Then Trump posted that Iran had contacted the U.S. “to work out a deal,” and everything flipped. The S&P 500 rallied from −0.3% intraday to close +1.02% at 6,886.24 — the highest close since the war began on February 28, and above both its 50-day and 200-day moving averages for the first time in six weeks. The Nasdaq surged 1.23% to 23,183.74, powered by software stocks after Goldman Sachs CEO Solomon’s AI commentary. The Dow gained 0.63% to 48,218.25.
Goldman Sachs kicked off earnings season with $5.63 billion in Q1 profit — beating expectations and posting record equities trading revenue as war-era volatility proved a trading bonanza. But FICC revenue fell 10%, missing estimates, and the stock dropped 1.9%. Solomon noted that “2026 began with a degree of optimism” but “things rarely move in a straight line.” Earnings season expectations remain robust: 12.6% profit growth for Q1, the sixth consecutive quarter of double-digit earnings expansion. JPMorgan, Citigroup, Wells Fargo, and Bank of America report later this week.
The Ibovespa defied the blockade for a fourth consecutive ATH. Chart data: O:197,324, H:198,173, L:196,223, C:198,001 (+0.34%). RSI at 72.51 (MA: 59.71) — now above 72, the highest overbought reading of the entire cycle. MACD histogram at 3,516 (MACD: 1,991.98, signal: 1,524.19). The USD/BRL chart shows O:5.0619, H:5.0688, L:5.0153, C:5.0284 (−0.27%), with RSI at 43.12 (MA: 30.38) — the moving average in deeply oversold territory. Oil trimmed from $105 intraday to ~$99 as deal hopes surfaced. The blockade activated at 10 AM ET without military incident — a critical de-escalation signal. As covered in yesterday’s Morning Call, the blockade was supposed to break the rally. Instead, the market broke through to pre-war highs.
Market Snapshot DATA AS OF MON, APR 13 CLOSE
| Indicator | Close / Level | Change |
|---|---|---|
| Ibovespa | 198,001 | +0.34% (4th ATH) |
| USD/BRL | R$5.0284 | −0.27% (BRL ↑) |
| S&P 500 | 6,886 | +1.02% (pre-war high) |
| Dow | 48,218 | +0.63% |
| Nasdaq | 23,184 | +1.23% |
| WTI Crude | ~$99 | +2% (trimmed from $105) |
| Gold | ~$4,702 | −1.78% |
| Bitcoin | $74,338 | −0.15% |
| VIX | 19.23 | −1.33% |
What to Watch TUESDAY CATALYSTS
March PPI at 08:30 ET is the key data event. Consensus: headline +1.1% MoM / +4.6% YoY (from +0.7% / +3.4% in Feb); core +0.4% MoM / +4.2% YoY (from +0.5% / +3.9%). The PPI captures the oil shock’s impact on producer costs — the supply chain inflation that will feed through to future CPI prints. If PPI comes in above +4.6%, the market must reckon with the possibility that even with a ceasefire, the inflation damage is already embedded. German WPI overnight (+4.1% YoY vs 1.2% prior) shows the oil pass-through is hitting European producers hard.
The IEA Monthly Report at 05:00 ET is critical for the oil market. If the IEA adjusts its supply/demand balance to reflect the blockade, it could either support the $99 oil price or argue for further tightening. Four Fed speakers (Goolsbee, Barr, Collins, Barkin) between 12:10 and 13:00 will provide the most extensive Fed commentary since the CPI report and the blockade — their collective tone on inflation versus growth will set expectations for the April 28-29 FOMC. ECB’s Lagarde at 17:00 rounds out the central bank commentary.
Brazil’s Service Sector at 07:00 BRT (prev: +0.3% MoM / +3.3% YoY) will show whether domestic demand held through the war period. Argentina CPI at 15:00 (cons: +3.0% MoM / +32.2% YoY) matters for Milei’s disinflation narrative. The API crude stock report at 16:30 will show the first post-blockade inventory picture. Bank earnings continue building toward the JPMorgan, Citigroup, Wells Fargo, and BofA releases later this week.
Ibovespa Setup TECHNICAL LEVELS
The Ibovespa posted its fourth consecutive ATH despite the blockade. Chart: O:197,324, H:198,173, L:196,223, C:198,001 (+0.34%). RSI at 72.51 (MA: 59.71) — now above 72, deep in overbought territory. MACD histogram at 3,516 (MACD: 1,991.98, signal: 1,524.19) — the bullish expansion is extreme but decelerating (the histogram gain is smaller than the prior session’s). The index has gained over 10,000 points in five sessions. The 200-day SMA at 157,552 is now 26% below the current price.
Resistance: 198,001 (Monday close / new ATH) → 198,173 (intraday ATH) → 197,801 (upper Bollinger) → 200,000 (psychological).
Support: 195,886 (mid-range) → 191,394 (SMA vicinity) → 190,344 (mid-Bollinger) → 188,476 (SMA cluster) → 186,607 / 186,606 (20-day convergence) → 185,782 / 185,417 (lower range) → 173,762 (lower Bollinger) → 157,552 (200-day).
Copom Watch SELIC AT 14.75% · NEXT MEETING: APR 28-29
The BCB’s decision calculus continues to shift. The blockade added hawkish pressure, but the market’s indifference to it — and Trump’s signal that Iran wants to talk — has partially offset the concern. Oil at $99 is better than $105 for the BCB. The USD/BRL at R$5.03 remains a powerful disinflationary force. Friday’s IPCA at +4.00% YoY hit the tolerance ceiling but didn’t breach it. Today’s PPI data matters: if U.S. producer prices show the oil shock is already being absorbed (core meeting consensus), the global inflation narrative stabilizes. If PPI surprises to the upside, the BCB’s hawkish hand strengthens.
The ceasefire window expires April 21 — just 7 days away, and 14 days before the Copom decision. The blockade complicates the picture: it’s a new form of economic warfare, but it’s also a negotiating tool that could produce a deal. Four Fed speakers today will signal whether the U.S. rate path is moving toward hikes or extended pauses. The BCB will hold at 14.75% with language determined entirely by what happens with the Strait between now and April 28.
Economic Calendar TUESDAY, APR 14
| Time | Event | Impact |
|---|---|---|
| Pre-Market | German WPI: +4.1% YoY (massive oil pass-through). Eurozone Core CPI (cons: +2.7%). Spanish CPI (cons: +3.3% YoY). India WPI (cons: 3.0%). IEA Monthly Report (05:00 ET — supply/demand blockade impact). BoE Mann speaks (04:50). German 5Y Bobl auction (05:30). NFIB Small Business Optimism (06:00, cons: 97.8). IMF Meetings Day 2 | HIGH |
| 07:00–08:30 | BRL Service Sector (07:00 BRT, prev: +0.3% MoM / +3.3% YoY). ADP Weekly Employment (08:15, prev: 26K). US PPI (08:30 ET, cons: +1.1% MoM / +4.6% YoY headline; core +0.4% / +4.2%). Redbook (08:55). Producer-side inflation capturing full oil shock | CRITICAL |
| 12:00–17:00 | BoE Gov Bailey (12:00). Fed’s Goolsbee (12:10), Barr (12:45), Collins (13:00), Barkin (13:00) — four Fed speakers in 50 minutes, first post-CPI/post-blockade commentary. Argentina CPI (15:00, cons: +3.0% MoM / +32.2% YoY). API Crude Stock (16:30, prev: +3.719M). ECB Lagarde (17:00). Korean trade data overnight | HIGH |
Latin America Markets MONDAY CLOSE / CHART DATA
| Index | Close | Change | RSI (14) | Signal |
|---|---|---|---|---|
| Ibovespa | 198,001 | +0.34% | 72.51 | Overbought |
| IPC (Mexico) | 69,595 | −0.61% | 51.88 | Neutral |
| COLCAP (Colombia) | 2,347 | +1.98% | 52.28 | Neutral |
| IPSA (Chile) | 11,133 | +0.51% | 63.93 | Bullish |
| MERVAL (Argentina) | 2,991,781 | −0.23% | 59.12 | Neutral |
Colombia’s COLCAP was the standout Monday, surging 1.98% to 2,347 — the oil-producing country directly benefiting from the blockade-driven crude surge to $105 intraday. RSI at 52.28 shows room to extend. Chile’s IPSA continued its run to 11,133 (+0.51%) with RSI at 63.93, approaching overbought. Mexico’s IPC fell 0.61% to 69,595 as the peso-sensitive index reacted to blockade uncertainty, with RSI neutral at 51.88. Argentina’s MERVAL slipped 0.23% to 2,991,781, still frustratingly close to the 3 million level. The Ibovespa’s overbought divergence from the region continues to widen — at RSI 72.51, it is 10+ points above the next-highest reading (Chile’s 63.93). As covered in the latest LATAM Pulse, the blockade has created a new divergence: oil exporters (Colombia, Brazil’s energy sector) benefit while oil importers (Chile, Mexico) face renewed cost pressure.
Commodities & FX KEY MOVES
Oil told two stories Monday. WTI surged to $105 intraday as the blockade activated and the market priced in a new phase of economic warfare. Then Trump’s signal that Iran wanted to talk pulled crude back to ~$99. Brent settled near $97. The $99-105 range appears to be the new equilibrium under blockade-plus-deal-hopes conditions. Oil is steady near $98-99 overnight. The IEA Monthly Report this morning and the API inventory data tonight will provide the next directional inputs.
USD/BRL held near R$5.03 (chart: O:5.0619, H:5.0688, L:5.0153, C:5.0284, −0.27%). RSI at 43.12 (MA: 30.38) — the MA reading remains in deeply oversold territory, the most extreme of the rally. The MACD is bearish at −0.0234 (signal: −0.0264, MACD: −0.0498). The real’s remarkable resilience through the blockade confirms the carry trade’s structural power. The R$5.00 level remains the psychological target.
Bitcoin surged to $74,338 on Monday (chart: O:74,451, H:74,595, L:74,031, C:74,338, −0.15%). RSI at 61.69 (MA: 53.87) shows healthy bullish momentum without overextension. The crypto has broken above the $72,000 resistance level that was the key trigger identified in earlier analysis. Next targets: $75,000, then $78,000-80,000.
Risk Map BULL vs BEAR
| Bull Case | Bear Case |
|---|---|
| The market has priced the war — and is looking beyond it — The S&P 500 reclaiming pre-war highs despite an active blockade is the single most significant technical signal of the conflict. Yardeni’s observation that markets are “learning to live with the war” is validated. Earnings at +12.6% growth provide a fundamental floor. The blockade is targeted (Iranian ports only), not a full Strait closure. Trump’s deal signal means diplomacy continues. The war premium is unwinding even as the war continues.
The software rotation extends the rally’s breadth — Monday’s 5% software ETF surge was the best in a year. Goldman’s Solomon catalyzed a repricing of the AI-fear selloff in SaaS. If tech/software joins energy in leading, the rally has two engines. Samsung’s +755% profit beat, GS’s record equities trading — the earnings picture is strong. The Ibovespa at 198,000 reflects a structural rerating — Four consecutive ATHs. BRL at R$5.03. 14.75% Selic carry. The commodity exposure. The global distance from the conflict. This isn’t a ceasefire bounce anymore — it’s institutional recognition that Brazil is the safest high-yield play in EM. |
RSI at 72.51 is the most extreme overbought since the war began — Four ATHs in a row. 10,000+ points in five sessions. RSI above 70 has historically preceded corrections of 3-5% in the Ibovespa. The deceleration in Monday’s gain (+0.34% vs prior days’ 1-2% surges) suggests momentum is peaking. A single hot PPI print or blockade incident could trigger the overdue pullback.
PPI at +4.6% YoY would be the worst producer inflation since 2022 — German WPI already confirmed a +4.1% YoY surge. The supply chain is absorbing the oil shock. If U.S. PPI confirms this, the “transitory” narrative from CPI breaks down. Producer prices lead consumer prices by 1-2 months. April CPI will be worse, not better, and the Fed’s rate-hike contingent strengthens. The blockade is an act of economic warfare that hasn’t been tested — No military incident on Day 1 is good news. But Iran threatened that “security in the Persian Gulf is either for everyone or NO ONE” and that “NO PORT in the region will be safe.” The escalation ladder from blockade to naval confrontation to full regional war is short. The market is pricing deal hopes — but Vance left Islamabad without one after 21 hours of trying. |
Positioning BOTTOM LINE
Monday’s reversal was the market’s verdict on the blockade — and it was: “not enough to break us.” The S&P 500 at pre-war highs, the Ibovespa at its fourth consecutive ATH, the VIX at 19 — these are not the readings of a market terrified by a naval blockade. Yardeni is right: financial markets are adapting to the war as a permanent feature of the landscape, not a temporary crisis. Earnings at 12.6% growth, strong AI narratives, and the structural carry trade in Brazil all provide fundamental support that transcends the daily geopolitical headlines.
But adaptation is not immunity. The Ibovespa’s RSI at 72.51 is a neon warning sign. Four ATHs in a row without a single red candle is unsustainable regardless of the fundamental backdrop. The deceleration in Monday’s gain (+0.34% after four days of 1-2% surges) suggests the rally is entering its exhaustion phase. Today’s PPI is the catalyst for the next move: a hot print (above +4.6% headline / above +4.2% core) would remind the market that inflation damage is cumulative and structural, potentially triggering the overdue correction. A cool print would extend the rally but from increasingly stretched levels.
The ceasefire expires in 7 days. The blockade is active. Talks may or may not resume. The BCB meets in 14 days. Four Fed speakers today will shape rate expectations. Bank earnings are arriving. The information density ahead is extreme. For the Ibovespa at 198,000 — position for a healthy pullback toward 192,000-195,000 that resets RSI without breaking the bullish structure. The carry trade at R$5.03 continues to be the structural floor. Energy exposure remains the blockade hedge. And watch the PPI at 08:30 — it will determine whether the market’s war adaptation continues or faces its first real test.
RT Staff Reporters · This newsletter is for informational purposes only and does not constitute investment advice. Always consult a licensed financial advisor before making investment decisions. Past performance does not guarantee future results.