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Oil Soars $11,
taking Brent to a four-year high of $117 and crushing stocks. President Donald Trump will not lift a naval blockade of Iran's ports until he secures a deal with Tehran to address the country's nuclear program. Trump said he had rejected a recent proposal from Iran to reopen the Strait of Hormuz, which would have delayed talks on the nuclear issue until later. The blockade has caused a global energy crisis, with oil prices continuing to rise and the US military preparing a plan for a short and powerful wave of strikes on Iran to raise pressure on the regime.
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Fed Keeps Interest Rates Unchanged,
citing inflation risks as the main reason for not cutting. Four members dissented for the first time since 1992. Inflation is elevated, in part reflecting the recent increase in global energy prices. This is a shift from the previous language, saying that inflation was just somewhat" elevated. Developments in the Middle East are contributing to a high level of uncertainty about the economic outlook.
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Look for a Longer Iran War,
and much higher gasoline prices. Trump discussed steps the US could take to prolong its blockade of Iran during a meeting with oil and trading industry executives. The meeting included representatives of companies such as Chevron Corp, Trafigura Group, Vitol Group, and Mercuria Energy Group Ltd, and was hosted by Treasury Secretary Scott Bessent. Participants discussed ways the Trump administration could keep up its blockade of Iranian ports while minimizing impact on American consumers, and also spoke about efforts to address the oil market.
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US Trade Deficit Rises,
thanks to soaring imports. The goods trade gap increased 5.3% to $87.9 billion last month, the Commerce Department's Census Bureau said on Wednesday. Economists polled by Reuters had forecast the goods trade deficit at $86.95 billion. It totaled $83.5 billion in February.
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U.S. Single Family Homebuilding Increased to a 13-Month High
in March, but the improvement was likely a blip as permits for future construction fell sharply and confidence among builders remained subdued. Single-family housing starts, which account for the bulk of homebuilding, surged 9.7% to a seasonally adjusted annual rate of 1.032 million units, the highest level since February 2025, the Commerce Department's Census Bureau said on Wednesday.
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Tech has Discounted Great Earnings, but can they deliver?
U.S. stocks are on an impressive run heading into this week’s slate of earnings, with an index of semiconductor names notching its longest winning streak on record, the Magnificent Seven tech giants rising nearly 20% since late March, and the broader (SPY) notching a series of record highs last week that pegs the benchmark well north of the 7000-point mark.
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Schlumberger Jumps on Business Realignment.
It is seeking to recover higher costs from customers after the U.S.-Israeli war on Iran and the effective closure of the Strait of Hormuz disrupted global supply chains. Its shares were up 3.7%. The impact was most pronounced in Qatar due to force majeure and the suspension of offshore operations, and in Iraq due to security conditions. The Middle East is SLB's biggest market. During the quarter, revenue from the Middle East and Asia dropped 10% to $2.69 billion. Buy (SLB) on dips.
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Defense Stocks Buy the Rumor but Sell the News.
Production bottlenecks and uncertainty over the US’s military budget have led investors to sell global defense stocks despite ongoing conflicts in the Middle East. Share prices of leading American defense companies Lockheed Martin (LMT), Northrop Grumman (NOC), and Raytheon (RTX), have all fallen since the US bombed Iran at the end of February, despite the military’s massive expenditure of ordnance over the past two months drawing attention to mounting production backlogs. The US has burned through munitions much faster than it can produce them. The problem is that defense companies may get some money up front, but they don’t typically profit until they deliver years down the road.
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Tesla Lease Returns Set of the Burgeoning Used EV market.
Some 300,000 Tesla’s come off leases this year, and 600,000 in 2027. Residual values have plumed with some models trading at a 60% discount to their purchase prices in only three years. That sets up great deals for consumers now desperate of gasoline alternatives. Some 25% of new cars sold worldwide were EV’s in 2025.
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Baker Hughes Sees Booming Business
as tighter global supplies, driven by the Middle East conflict, highlight the need for investment, particularly in North America. The Iran War has halted 20% of the world's oil that usually flows through the now-closed Strait of Hormuz and shut in 9 million barrels a day of oil production, causing Asian and European countries to scramble for supplies. It has also focused attention on energy security and the need for supply diversity. Buy (BKR) on dips.
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Alphabet to Invest $40 Billion in Anthropic,
popping (GOOGL) shares. Amazon is also investing a further $25 billion. As part of the deal, (GOOGL) is selling 5 gigawatts of compute capacity to Anthropic in another circular chips for equity deal. Buy (GOOGL) and (AMZN) on dips and avoid the Anthropic IPO.
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Physical Oil still Trading at Huge Premiums to the Futures Market.
Roughly 20 million barrels a day of oil supply are bottled up in the Strait of Hormuz, equivalent to 20% of global demand. The current disruption has drawn roughly 500 million barrels from global stockpiles, which could hit a billion barrels by June. Brent crude oil futures are back above $100 a barrel, but the market seems strangely sanguine, especially in longer-dated futures, with prices for 2027 up 17% compared with 43% for front-month contracts. Hedge Funds are making fortunes buying far months futures contracts at $60 a barrel and selling front month at $100.
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The Avis Short Squeeze Ends.
The car-rental company Avis Budget Group Inc.'s (CAR) stock cratered, wiping out all but a sliver of its 600% meme gains over the previous month, in just two days with no clear cause. The sharp rise was a classic short squeeze, in which investors who'd sold borrowed Avis shares started racing to close out those positions by buying them back, but the sudden reversal is much less clear. Avis announced that it would report its first-quarter earnings on April 29, ahead of an expected early-to-mid May date, which ignited speculation that Avis was planning to raise money by selling stock, turbocharging the selloff.
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Intel Rockets 22%, on a spectacular earnings report, and is up 120% so far this year. Given up for dead as recently as a year ago, the company revived on the unlimited demand for AI chips. $1 billion in revenue was lost because the company could not deliver on all its orders, and demand is so great. A big part of the beat came from inventories once thought obsolete, which customers bought anyway, they were so desperate for compute. PC capacity is being shifted over to AI production. At 100X earnings (INTC) is now a strong avoid. The stock is already priced for a comeback that hasn’t finished yet.
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Consumer Sentiment Drops to New Record Low,
down to 48.9, no doubt due to soaring gasoline and food prices. Twelve-month inflation expectations increase sharply. The Iran War has disrupted shipping in the Strait of Hormuz, boosting the price of oil and ultimately the cost of gasoline and diesel. Prices for other commodities, including fertilizers, petrochemicals, and aluminum, which will soon impact consumers, have also surged.
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Trump Orders the Navy to Shoot Mine-Laying Boats,
and that tells you exactly where this war stands. Iran seized two commercial ships in the Strait overnight — the MSC Francesca and the Epaminondas — while Trump posted on Truth Social that the Navy has shoot-to-kill orders on any boat laying mines, "no hesitation." Mine sweepers are now running at triple capacity. Eight ships transited the Strait on Wednesday. Before the war, more than 100 did it daily. Iran's parliament speaker was equally blunt: reopening the Hormuz is impossible as long as the US blockade holds. Peace talks in Pakistan have collapsed. This ceasefire is a war at a slow pace. Brent stays above $100. Oil stocks stay in play. Buy (XOM) on dips.
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Gas Hits $4.03 at the Pump, the Highest Since 2022,
and Americans have now been above $4 a gallon for more than three weeks straight. Diesel is at $5.51. I have been watching oil shocks since 1973, and this one is the most structurally constrained I have ever seen — you cannot route 20 million barrels a day of Persian Gulf oil around an indefinitely closed strait. The Strategic Petroleum Reserve is draining. The EPA has waived summer-blend rules. A Jones Act waiver helps the coasts but does nothing for the heartland. Stanford economists project the average household will pay $740 more in gas this year because of the war. Moody's chief economist says don't expect below $3 again in 2026. The consumer is being squeezed from every direction.
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Tesla Beats Earnings and Drops 3% on a $25 Billion Spending Bomb,
and this is exactly the kind of quarter that separates Musk believers from Musk skeptics. Q1 EPS came in at $0.41 against a $0.36 estimate. Revenue hit $22.39 billion. Gross margin expanded to 21.7%. All fine. Then the call started. $25 billion in capital expenditures for 2026 — triple last year's $8.5 billion — covering six simultaneous factory ramps, an Optimus robot production facility in Austin opening in August, a chip design fab, and a doubling of AI compute. The CFO confirmed the company will run negative free cash flow for the rest of the year. I've put 50,000 miles on Teslas. The product is brilliant. The balance sheet just became a different animal. Avoid (TSLA) until this capex story clears.
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ServiceNow Collapses 14% Despite Beating Revenue Estimates,
and this is what happens when the market stops trusting the story. $3.77 billion in Q1 revenue, up 22% year over year — a beat. Raised full-year guidance. And the stock got destroyed anyway. Three reasons: The Armis acquisition is going to crush subscription gross margins for the rest of 2026. The Iran war directly killed several large Middle East enterprise deals, a 75-basis-point headwind to subscription revenue growth. And the deeper fear hasn't gone away — AI may eventually erode the seat-based model that built this company. The stock is down 34% year to date and now trades at the same earnings multiple as Microsoft despite growing twice as fast. I know hedge funds that are massively short. Whether that's a screaming buy or a value trap depends on whether you believe McDermott can pivot the business model in time. Proceed at your peril.
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Texas Instruments Posts 19% Revenue Growth in a Quarter Nobody Expected,
with $4.83 billion in sales, earnings per share of $1.68 — a 23% beat against consensus — and Q2 guidance set at $5.2 billion at the midpoint, 7% above what Wall Street was modeling. Industrial and data center demand drove every line. Operating margin hit 37.5%. The stock is up 8% on the day. This is what a real semiconductor recovery looks like — not GPU speculation, but the deep industrial analog base that sits inside every factory floor, every piece of manufacturing equipment, every data center rack. I have been following TI since they invented the integrated circuit in 1958. The industrial cycle has turned. Buy (TXN) on dips.
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Tim Cook is out at Apple,
and the era of the professional manager is over. John Ternus, the hardware engineering chief who has spent more than two decades inside Cupertino, takes the CEO chair on September 1st. Cook did his job — he turned a great product company into a $4 trillion money machine, a 24-fold increase on his watch. But Apple hasn't had a true visionary at the top since Steve Jobs died, and the stock has gone nowhere this year while the Nasdaq ripped 5%. Ternus is an engineer, not a salesman. That is exactly what Apple needs right now. Buy (AAPL) on dips.
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The Fed's New Boss Goes Before the Senate Today,
and Kevin Warsh has the most important job interview in the history of central banking. Trump wants lower rates. The bond market wants a hawk. Inflation is running at 3.58% and climbing. I have been watching Fed chairmen come and go since the days of Arthur Burns, and I have never seen one walk into a more impossible situation. Warsh is a smart man — I've met him — but smart doesn't matter when you're caught between a president who tweets and a bond market that doesn't care. Higher rates are coming whether Warsh likes it or not. Avoid (TLT) at all costs.
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The Ceasefire Expires Tomorrow, and Trump is Playing With Fire,
telling CNBC this morning, he expects a "great deal" with Iran while simultaneously promising to bomb their power plants and bridges if nothing is signed by Wednesday. I have covered wars since Vietnam. This is not how deals get done. Bank of America's own economists warned clients this morning that the market is dangerously extrapolating the trade war playbook onto a shooting war — and that de-escalation is no longer a unilateral move. They are right. Oil at $95 is not the problem. Oil at $130 is the problem. Stay long (USO) and (XLE) until there is ink on paper.
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Dell is the AI Server Trade Nobody is Talking About,
and Melius Research just raised its two-year target to $245. While everyone is obsessed with Nvidia, Dell is quietly stealing market share from Supermicro, whose co-founder was just indicted by the DOJ for allegedly smuggling AI servers into China. I have seen this movie before — the number two player in a hot market with a legal scandal clearing out the number one. Agentic AI is driving a whole new wave of enterprise server demand, and Dell is positioned to capture it. This is a ten-bagger in the making. Buy (DELL) on dips.
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Tesla Reports Tomorrow, and Elon Has One Job,
say the word "robotaxi." Deliveries were missed by 12,000 units in Q1, and the stock is down 11% year to date. None of that matters. Tesla has never been a car company — it is an options contract on the future of autonomous transport, AI, and energy. The Terafab chip project alone — a joint venture with SpaceX targeting a terawatt of annual computing capacity — could be worth more than the entire current market cap if it delivers. The robotaxi announcement will come. It always does.
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