Inflating, But Not Stagnating
U.S. equities surged to fresh all‑time highs as the S&P 500, Nasdaq and DJIA rallied on news of a 60‑day cease‑fire extension between the United States and Iran. The market brushed aside ExxonMobil’s warning that dwindling oil inventories could lift crude to $150 a barrel. Dell’s stock leapt 39% in after‑hours trading after its “fabulous earnings momentum” report. Meanwhile, April’s personal consumption expenditures deflator showed headline inflation at 3.8% year‑over‑year, the highest since March 2023, with core inflation at 3.3% and goods prices spiking on an energy shock and tariff pressures.
From Cuts to Hikes: The Fed's Shifting Calculus
The Federal Reserve’s April FOMC statement included an easing bias, suggesting future rate cuts, but three voting members—Hammack, Kashkari, and Logan—voiced dissent, and Boston Fed President Susan Collins has now joined them. Market participants anticipate the bias will be dropped...
MARKET CALL: Raising Our 2026 S&P 500 Target Range Due To Earnings-Led Meltup
Morgan Stanley has lifted its year‑end 2026 S&P 500 target to a range of 6,750‑8,250, capping the upside at 8,250. The move follows a rapid acceleration in consensus earnings forecasts, with 2026 EPS now projected at $336.49—up 22% year‑over‑year. The firm...
Productivity Booms As Labor Market Shows Signs Of Revival
Productivity growth accelerated in the latest quarter, signaling a tentative rebound in the U.S. labor market. Employment‑related equities such as ADP, Paychex and ManpowerGroup, which slumped earlier in the year, appear to have found a floor as hiring picks up....
Earnings-Led Meltup
Since the S&P 500 hit its March 30 low, the index has surged 16.1% to a fresh record high. Analysts have sharply upgraded earnings‑growth expectations, now forecasting 21.4% growth for 2026 and a long‑term earnings growth (LTEG) of 20.2%, surpassing the 2000...
WEEKLY WEBCAST: Consumers Still Doing What They Do Best
Consumer spending, the engine of roughly 70% of U.S. GDP, remains surprisingly robust despite stagnant wage growth. Ed and Elias attribute this resilience to a "gen‑shaped" economy, where retiring Baby Boomers are drawing down massive nest‑egg savings, keeping demand high...
The Roaring 2020s Express Train
U.S. equities are climbing to fresh highs as corporate earnings keep pace with a surprisingly resilient economy. In Q1, real GDP expanded at a 2.0% annualized rate, with private sales up 2.5% and business investment surging on AI‑related equipment spending....
WEEKLY WEBCAST: The Oil Shock & Inflation
The webcast examines why Brent crude hasn’t surged despite the Strait of Hormuz closure, noting limited response from U.S. producers. It links the energy supply crunch to broader inflation, especially through fertilizer shortages that could lift food prices. Analysts argue...
Powell's Swan Song
Jerome Powell will deliver his final Federal Reserve press conference tomorrow before the Senate confirms Kevin Warsh as his successor. Powell is expected to argue that the Fed will keep rates steady because inflation risks have risen, even as unemployment...
MARKET CALL: Devil-May-Care
The note forecasts the S&P 500 hovering around 7,000 with a year‑end target of 7,700, assuming a mid‑year resolution to the Strait of Hormuz stalemate. It highlights a barbell positioning—overweight Energy and market‑weight IT—because both sectors trade above their 200‑day...
INFORMATION TECHNOLOGY: Creative Destruction On Speed
On Dec 7, 2025 we reduced the S&P 500 Information Technology and Communication Services sectors from overweight to market weight, noting they now comprise 45% of the index’s market cap and rising uncertainty over AI investment returns. Since then, hyperscalers have demonstrated profitable...
Warsh, Rinse, Repeat
Former Fed governor Kevin Warsh told the Senate Banking Committee he would curtail the Federal Reserve’s forward‑guidance routine, eliminating quarterly Summary of Economic Projections and the dot‑plot, and limiting post‑FOMC press conferences to truly "important" news. He also attacked the...
WEEKLY WEBCAST: Debating Warsh
Kevin Warsh, the leading candidate to succeed Jerome Powell as Fed chair, is pushing for an earlier cut to the federal funds rate. Ed and Elias argue his rationale—based on a declining labor share and an AI‑driven productivity boom—misreads the...
Power Vacuum In Iran Isn't Fazing US Economy
President Donald Trump announced an indefinite extension of the US‑Iran ceasefire, citing a fractured Iranian government after recent US‑Israeli assassinations. The power vacuum has left the Islamic Revolutionary Guard Corps effectively controlling the Strait of Hormuz, while US naval forces...
MARKET CALL: Yogi Was Right: 'The War Ain't Over Till It's Over'
The United States and Iran have abandoned a recent cease‑fire, prompting U.S. Central Command to announce a naval blockade of all maritime traffic in and out of Iranian ports beginning Monday at 10 a.m. ET. The news sent Brent and WTI...