Opening Bell: 4.8.26

Iran Bounce: These TACOs Are Getting Stale [WSJ]Over the 300-plus trading sessions since Trump took the oath of office last year, nine of the S&P 500’s 10 biggest gains have had to do with relief over tariffs or Iran. Owning stocks on just those days would have earned an investor 52% on their money compared with 12% for buying and holding an index fund throughout. Wednesday’s cease-fire rally might crack the top six.Why not higher? Like most ways to make a quick buck in stocks, the longer the TACO trade works, the more modest the reward gets compared with the potential downside. Traders have been conditioned to anticipate a last-minute reprieve, sapping the subsequent bounce. Stocks ended with a small gain Tuesday just hours before Trump’s deadline.Markets shift back towards potential Fed rate cut this year with Iran ceasefire in place [CNBC]Odds for a reduction jumped Wednesday morning, hitting about 43%, according to the CME Group’s FedWatch tool…. Prior to the announcement, market-implied odds for a cut were just 14%.Traders had expected the Fed would be hesitant to cut this year as the Iran conflict had sent energy prices skyrocketing, threatening the central bank’s efforts to get inflation back to its 2% goal. Previous to that, markets had expected multiple cuts this year in an effort to shore up the plodding labor market.My Quest to Solve Bitcoin’s Great Mystery [NYT]Adam Back, a British cryptographer and leading figure in the Bitcoin movement, sat on a park bench in Riga, Latvia, his shirt untucked under a brown coat. The filmmaker casually rattled off the names of several Satoshi suspects. At the mention of his own name, Mr. Back tensed up, strenuously denied he was Satoshi and asked that the conversation be kept off the record….I pored over Satoshi’s body of writing, especially the emails released by Mr. Malmi, and made a list of words and phrases that stood out to me…. Using the advanced search function on the social media platform X, I did a cursory search to see if any of the dozen or so people most often suspected of being Satoshi used the terms I had highlighted…. One person was a match for nearly all of my words and phrases: Mr. Back.Hedge funds suffered worst losses since Covid in Iran war turmoil [FT]The flagship hedge fund performance index of data provider HFR recorded a 3.1 per cent fall last month, more than any month since a 9.1 per cent drop six years ago…. “I’ve been managing money for 40 years and I’ve never been less certain on how things are going to turn out,” said one macro hedge fund manager.SpaceX isn’t even public yet and investors are already abuzz about a Tesla merger [WSJ via MSN]Musk hasn’t been shy about aligning his companies to achieve his life’s ambition of building human civilization on Mars. Morgan Stanley’s former Tesla analyst Adam Jonas dubbed the project the “Muskonomy.” In recent weeks, other Wall Street analysts have picked up where Jonas left off, with some telling investors they see some logic to a merger.FDIC Lays Out Guidelines for Institutions Issuing Stablecoins [Bloomberg]New guidelines would seek to establish requirements related to reserve assets, redemptions of outstanding stablecoins, permissible activities and capital, among others…. The plan is likely to be cheered by industry. Crypto firms will likely see it as a step closer to legitimacy while banks pore over the details to ensure the regulators don’t give financial technology companies too much room to act like traditional lenders.