Hello, Here is the April edition of Mulder Strategies with the latest reading on my proprietary recession indicator and a detailed liquidity update. I want to thank you for subscribing as I do not take it for granted.

Every month we review our proprietary recession indicator, which combines key economic signals into a single, easy-to-read probability score. Think of it as a dashboard light for the U.S. economy.

Quick Summary
As of April 1, 2026, the indicator stands at 33%. This remains in “low-risk” territory and is still supportive for bullish investors in the near term.

However, the underlying trends we’re tracking: slowing GDP, flat job growth, consumer weakness, and rising energy costs, are moving in the wrong direction. Official data often lags reality, which is why we watch these real-time signals so carefully and look at underlying trends to support our outlook.

GDP Growth Slowed Sharply

The final reading for Q4 2025 GDP was revised down to just 0.7% — half the initial estimate of 1.4% and a big drop from Q3’s strong 4.4%. A government shutdown and a sharp reversal in exports were the main culprits. One weak quarter doesn’t mean recession, but it’s a clear step down from last year’s momentum.

Labor Market Is Stalling

Total U.S. jobs have been essentially flat since April 2025. March brought more layoffs and the non-farm payrolls report came in negative. Unemployment edged up from 4.3% to 4.4%. On its own that’s not alarming, but the trend is clearly weakening. Historically, this pattern has preceded recessions.

Consumers Are Under Pressure — Again

Consumer spending accounts for roughly 70% of U.S. GDP. Many lower- and middle-income families are still stretched due to higher prices, persistent inflation near 5%, and longer spells of unemployment. At the same time, wealthier households continue to do well thanks to rising asset prices. This split creates the classic “K-shaped” recovery. Rising oil prices are now adding further pressure on everyday living costs.

Yield Spreads: Early Warning Light Flashing

Bond yield spreads (the difference between riskier corporate bonds and safe Treasuries) are a classic leading indicator. They reflect how nervous investors are about the economy. After a false breakout earlier, spreads have broken out of their recent range again. It’s not yet a panic signal, but any further widening would suggest growing stress in credit markets. Sustained moves higher in spreads have often preceded economic trouble in the past. We’ll keep a close eye on this.

I remain overall bullish heading into mid-year, but I am far less aggressive than in previous cycles. The economy is showing clear cracks. For now, a more defensive stance makes sense: stay invested, but keep some dry powder and be ready to pivot if the data weakens further.

Liquidity conditions are a key driver of market direction. When liquidity is abundant, risk assets tend to rise. When it tightens, markets often become more volatile or correct.

Quick Summary
Liquidity conditions remain neutral for this month. The U.S. Dollar has strengthened toward 100 and is likely heading to 103 in the near term (risk-off bias), while banking system stress stays low and domestic liquidity is holding in a balanced range. Higher energy prices have not yet impacted banks meaningfully, but consumer weakness could create future pressure.

U.S. Dollar (DXY) Strengthening

The DXY has bounced sharply from deeply oversold levels and is now hovering near 100. As noted in recent updates, I expect the dollar to trade in the 100–103 range in the coming weeks. A stronger dollar is generally a risk-off signal for equities and emerging markets.

Banking System Stress Remains Low

Overnight financing rates are noticeably less stressed than they were in late 2025. The Fed’s repo facilities are providing almost no emergency lending to banks right now. Cash reserves at both small and large banks remain well above the lows seen late last year.

Domestic Liquidity: Neutral for Now

U.S. domestic liquidity has stayed in a relatively tight range since bottoming in November 2025, with only a modest recovery. A decisive breakout to new highs would be supportive for risk-on assets. A breakdown lower would tilt conditions toward risk-off.

Treasury General Account (TGA)

The TGA currently sits at approximately $870 billion. The Fed has kept the TGA relatively steady in Q1 2026. Should markets come under stress, the Fed still has substantial firepower available here to be used.

Reverse Repo Facility (RRP)

The RRP remains largely depleted and is not currently injecting liquidity into markets. It will likely be refilled in the future if liquidity needs arise, similar to what happened after the 2018 liquidity squeeze.

The U.S. liquidity environment is currently stress-free and neutral, neither clearly bullish nor bearish. Higher energy prices stemming from the Iran conflict have not yet shown up meaningfully in bank balance sheets or liquidity metrics. That said, we are already seeing signs of consumer strain, which could eventually pressure banks if energy costs stay elevated for an extended period. This is a very dangerous trend we need to actively monitor. I report about the current outlook on my social media on a weekly basis.

The US-Israeli attacks on Iran have not led to the quick regime change that was hoped for. Instead, the conflict has backfired and is now significantly affecting the global economy.

Iran responded by closing the Strait of Hormuz, a move that is acting as a powerful “economic nuclear bomb.” This has caused immediate global shortages of oil, LNG, fertilizer, helium, and other critical commodities, with major disruptions to supply chains already visible.

Iranian counterattacks have been stronger than expected. Iran has demonstrated advanced underground missile and drone capabilities that are difficult to intercept, and it is actively threatening further strikes on oil installations in the Gulf states as well as a potential blockade of the Red Sea.

The United States finds itself in a difficult position. Military intervention to reopen the Strait carries high risks of casualties and dangerous escalation — possibly even nuclear. At the same time, a prolonged closure threatens to push the global economy into a deep recession.

As of April 8 2026, both sides have announced a ceasefire. However, history shows that ceasefires in this region can break down quickly. With President Trump’s unpredictable approach, the situation remains highly fluid and anything can happen until there is a definitive resolution.

There are 2 different outcomes I am looking out for right now:

Scenario A – Ceasefire holds

A diplomatic resolution is reached within the next few weeks. Oil prices normalize below $90. In this case, the recent bottom in the S&P 500 could prove to be the low point, potentially leading to a V-shaped recovery similar to what we saw in April 2025.

Scenario B – Conflict drags on

The ceasefire breaks and the war continues, keeping oil prices elevated for an extended period. This would put severe pressure on global growth and corporate margins. In this scenario, I expect the S&P 500 to test the 6100 level before finding a solid base.

In both scenarios, I see a meaningful risk (>50%) that the Iran conflict could be reignited by the U.S. after the midterm elections in November 2026. This remains a significant headline risk for markets going forward and I will continuously monitor this and update you in these updates about my outlook.

My longer-term outlook for 2026 remains bullish in the short to medium term. However, as we move into the second half of the year, I see increasing risks in U.S. equity markets.

Many cyclical indicators are pointing to 2026 as a potential cyclical peak year, with a likely rollover into 2027. The chart below illustrates this setup clearly.

My base case is the red scenario: we see one final push higher toward the 7300–7500 zone on the S&P 500, most likely around the midterm elections, before a meaningful rollover begins.

However, if the conflict with Iran drags on significantly longer than expected, the blue scenario becomes more likely. In that case, we would probably fail to make new highs, and the market would come under sustained pressure much earlier.

In future newsletters I will be sharing model portfolio’s for both active as passive investors. This section is still under construction for now.