North American markets are rebounding after a temporary ceasefire between the United States and Iran eased immediate geopolitical tensions. Investors are returning to equities as a major short-term risk comes off the table.
BNN Bloomberg spoke with John Zechner, chairman and founder at J. Zechner Associates, who says attention is now shifting back to earnings season, interest rate expectations and whether recent risks will weigh on growth and valuations.
Key Takeaways
- The ceasefire removes a key short-term geopolitical risk, but underlying tensions, including control of the Strait of Hormuz, remain unresolved.
- The market’s limited decline during the conflict suggests investors expected a de-escalation and were reluctant to sell aggressively.
- Valuations have moderated, increasing the importance of upcoming earnings reports and corporate guidance.
- Oil prices are expected to remain elevated due to ongoing supply uncertainty, supporting energy producers.
- Technology stocks may present opportunities after recent declines, while chipmakers face risks from a potential slowdown in capital spending.
Read the full transcript below:
ANDREW: Traders are moving back into stocks this morning. But will it last? Let’s get perspective from John Zechner, chairman and founder at J. Zechner Associates. John, thanks very much for joining us.
JOHN: Good morning, Andy. Before we get to that, I have to say, congratulations on the announcement yesterday. I came on this show back in 1999, when it was still ROB TV, and I think you started a year or two after that. So we’ve been talking for a long time. You’ll be missed.
ANDREW: Thank you very much, John, for those kind words. There’s a lot of uncertainty here. What’s top of mind for you this morning after the ceasefire announcement?
JOHN: The markets had sort of expected this to a degree, even with the rally into the end of the day yesterday. It’s almost a year to the day that you had that rally off the “Liberation Day” lows. The market sold off sharply in a week, and then the timeline was pushed out. I think investors remembered that, so there was a real reluctance to sell aggressively.
When you think about it, for all the risks, and for as much as oil prices went up and the potential for a major war, the S&P 500 didn’t even drop 10 per cent. That tells you there was a belief this would get resolved in some way. And we’ve got that, at least to some degree, this morning.
That’s probably why European and Asian markets are rallying even more than the U.S., because they were more directly impacted. So how do you manage this going forward? For now, a major risk has been taken off the table in the short term. The idea of a global escalation and its implications for oil prices and inflation has eased.
Now the focus shifts back to what we were watching before: upcoming first-quarter earnings, central bank decisions, concerns around software valuations and private credit. The market will feel more comfortable returning to those themes.
Valuations have come down. The U.S. market is trading at about 19 times forward earnings, versus about 23 times at the start of the year. That’s still not cheap, but it’s better. So we’re picking our spots.
The one area I’m looking at this morning is energy. These stocks are getting hit today, but I don’t think that trade is over. If you’re underweight, I’d be more inclined to step in. There are still a lot of unknowns around supply and shipping through the Strait of Hormuz.
I don’t think oil prices are going back to US$65 a barrel any time soon. That benefits Canadian producers. And I think there will be a growing focus on global supply security, where North America stands out.
ANDREW: You mentioned “apocalypse” earlier. What were you referring to?
JOHN: When you hear language about the potential obliteration of a civilization, even if there’s some bluster, you have to take notice. The plans being discussed were pretty extreme. Those risks are somewhat off the table for now.
ANDREW: Let’s turn to technology. You’re in the camp that says Microsoft is a decent prospect right now.
JOHN: In this scenario, the one thing that hasn’t changed is the rollout of AI. At the same time, these stocks have been hit hard. You can now buy companies like Microsoft and Alphabet at or below market multiples, which hasn’t happened in a long time.
There’s an assumption that some of these companies could be diminished over time, but a lot of that is already priced in. When you can buy growth companies at valuations below the broader market, that’s an opportunity.
I’d be more inclined to own those kinds of stocks rather than companies that depend heavily on global growth. I’d be lighter in consumer sectors and industrials. I think tech will hold up, though I wouldn’t put everything into it.
ANDREW: There are questions about how reliable AI will be for large businesses. Can they trust it?
JOHN: And how quickly it will be implemented. Companies have invested millions into existing systems. They’re not going to replace those overnight.
AI will be adopted over time as a productivity tool. The companies best positioned to benefit are the hyperscalers — the large cloud providers with established client bases. That includes Microsoft, Alphabet and Meta.
Where I’d be more cautious is in chip stocks. There’s been a lot of front-end demand, and it’s a cyclical sector. At some point, capital spending will slow, margins will come down, and valuations are still relatively high.
ANDREW: John, thank you very much. John Zechner, chairman and founder at J. Zechner Associates.
---
This BNN Bloomberg summary and transcript of the April 8, 2026 interview with John Zechner are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.
