General Market News

California's gasoline inventories have fallen to record lows as the closure of the Strait of Hormuz disrupts fuel imports from Asia, pushing pump prices to $5.86 per gallon, highest in the U.S. The state's reliance on Asian refined products and unique fuel blend requirements make it particularly vulnerable, with analysts warning the full impact of supply disruptions will worsen in coming weeks.

• California's four-week average gasoline stocks hit 9.44 million barrels (lowest since records began in 2005), while crude inventories dropped 23% year-over-year as refinery closures eliminated 20% of state refining capacity
• Pump prices reached $5.86 per gallon statewide, a 26% increase since the Iran war began and 43% above the national average of $4.09
• Import shock expected to fully materialize in 1-2 weeks as shipping from Asia takes several weeks, though state officials believe current stocks will prevent shortages through mid-May

The S&P 500 has reached new all-time highs despite ongoing geopolitical risks and elevated valuations. The cyclically adjusted price-to-earnings (CAPE) ratio stands at 41, the second-highest in over 140 years, suggesting significantly lower expected returns over the next decade. The article explores how investors can remain in the market while managing valuation risk through systematic, data-driven trading approaches.

• The CAPE ratio at 41 is second only to the dot-com bubble peak; historical data shows that CAPE levels above 35 have typically produced annualized real returns between 0% and 5% over the following 10 years, with some periods generating negative returns
• Major unresolved risks include ongoing conflict with Iran, failed peace talks, oil prices elevated above early-year levels, headline CPI inflation at a two-year high of 3.3% in March, and rate-cut expectations pushed back to mid-2027
• TradeSmith is promoting a quantitative trading system that scans thousands of stocks daily for specific statistical patterns and signals, claiming high-probability trade setups independent of broader market conditions or valuation concerns

U.S. stocks rallied on Thursday with the S&P 500 and Nasdaq hitting record highs, driven by optimism over a potential ceasefire in the Iran conflict. The S&P 500 rose 0.26% to 7,041.28, the Nasdaq gained 0.36% to 24,102.70, and the Dow added 115 points to 48,578.72, with both the S&P 500 and Nasdaq up 3.3% and 5.2% for the week respectively.

• President Trump confirmed a ceasefire announcement scheduled for 5 p.m. ET and indicated US-Iran talks could resume 'probably, maybe, next weekend,' fueling de-escalation hopes that helped erase all S&P 500 losses since the conflict began.
• The Nasdaq extended its winning streak to 12 consecutive sessions, its longest run since 2009, though strategists warn sustained gains depend on clearer diplomatic progress and a return to trading on fundamentals.
• Economic data showed jobless claims fell to 214,000, signaling labor market stability, while mixed earnings from PepsiCo (up), Abbott Laboratories (down after cutting guidance), and Charles Schwab (down) drove stock-specific moves.

The Nasdaq reached a record high on Wednesday, closing above 24,000 for the first time and surpassing its October record, as investors shifted focus from Iran war concerns back to AI-driven technology stocks. Tech has been the best-performing sector since late February, rising nearly 6% and outpacing the S&P 500 by more than four times. The rally reflects renewed confidence that AI spending will drive strong first-quarter earnings for tech companies.

• Tech sector earnings are forecast to have grown 44% last quarter, with estimates rising 6% since the start of the Iran conflict, signaling analysts underestimated the sector's earnings power.
• The tech sector trades at an 8% premium to the S&P 500, in line with long-term averages and considered attractive given strong earnings growth outlook and robust profit margins.
• Upcoming first-quarter earnings from software companies, memory chip makers, and cloud providers will provide clarity on whether AI infrastructure spending momentum has been maintained despite geopolitical uncertainty.

The upcoming week features a busy earnings calendar with multiple airline and blue-chip companies reporting results, while economic data remains relatively light. Key reports include Alaska Air, Boeing, IBM, and Procter & Gamble, alongside technology names like Snap, Intel, and Texas Instruments. The main economic indicator to watch will be the S&P flash U.S. services and manufacturing PMI readings for April due Thursday.

• Airlines in focus with earnings from Alaska Air, Boeing, and other carriers scheduled throughout the week
• Major blue-chip companies reporting include IBM, Procter & Gamble, plus tech sector names Snap, Intel, and Texas Instruments
• Economic calendar is light with S&P flash PMI readings on Thursday being the primary indicator, alongside retail sales Tuesday and consumer sentiment Friday

Kevin Warsh, nominated for Federal Reserve chair, disclosed wealth of $135-226 million, but hasn't revealed underlying assets in holdings worth over $100 million due to confidentiality agreements. Sen. Elizabeth Warren criticized this partial disclosure, calling Warsh the first Fed nominee not in compliance with ethics rules. The issue is particularly sensitive as the Fed faces scrutiny following ethics scandals under current chair Jerome Powell.

• At least $100 million of Warsh's assets are held in Juggernaut Fund vehicles connected to Duquesne Family Office, but underlying holdings remain undisclosed due to 'pre-existing confidentiality agreements'
• Warsh has pledged to divest the undisclosed assets within 90 days of confirmation, which would bring him back into compliance with ethics rules
• The Fed banned senior officials from owning individual stocks, bonds, and cryptocurrencies in 2022 following trading controversies, and Fed governor Michelle Bowman left in 2025 over impermissible holdings

The iShares MSCI Emerging Markets ETF (EEM) is trading near record highs at $62.38, approaching its February 27 peak of $65.96, as easing Middle East tensions may benefit international tech stocks. Options traders have been heavily bearish, with puts outnumbering calls 3-to-1 over the past two weeks, positioning bears for potential losses if the uptrend continues.

• EEM's 10-day put/call volume ratio stands in the 87th percentile of its annual range, indicating an unusually high bearish sentiment that is rare over the past year
• The ETF has recovered from a March pullback triggered by war concerns, filling the March 3 'bear gap' and finding support at its 200-day moving average
• Improved global supply chains and increased appeal of stocks like Taiwan Semiconductor (TSM) could drive further gains, potentially burning bearish options traders

U.S. stock markets rallied Thursday after President Trump announced a 10-day ceasefire between Israel and Lebanon, with the Dow gaining 232 points and the S&P 500 rising 38 points from session lows. The truce is viewed as a potential pathway to broader U.S.-Iran negotiations, though talks remain unscheduled. Markets are near record highs but investors remain cautious about sustainability of diplomatic progress.

• The S&P 500 recently crossed 7,000 for the first time and the Nasdaq extended its winning streak to 11 days, the longest since November 2021
• Oil prices rose despite easing tensions, with Brent crude up 3% to $98.33 and WTI up 2.3% to $93.40, reflecting ongoing supply and infrastructure concerns
• The ceasefire beginning at 5 p.m. ET fulfills a key condition for restarting Iran negotiations, though Trump noted a second round of U.S.-Iran talks has no official schedule

Weekly jobless claims came in at 207,000, below expectations and marking the lowest level since January 2024, while continuing claims remained low at 1.818 million. Manufacturing activity showed strength with the Philadelphia Fed index jumping to 26.7, more than double expectations and the highest reading in nearly 18 months. Despite healthy jobless claims data, major corporations including Meta (-16,000), Citigroup (-20,000), and others have announced significant layoffs in early 2026.

• Initial jobless claims of 207,000 beat expectations, representing the healthiest labor market figures since late 2023, though down from pre-Covid 50-year lows
• Philadelphia Fed manufacturing index surged to 26.7, significantly exceeding the expected 12.0 and marking the fourth consecutive month of positive readings with sequential improvement
• Despite strong jobless claims, major corporate layoffs totaling over 40,000 workers at companies like Meta, Citigroup, and Mastercard may impact future unemployment figures as severance packages expire

The Federal Reserve's April 2026 inflation forecast presents a significant challenge to the ongoing stock market rally, with core PCE inflation holding at 2.97% and oil prices near $100 per barrel following a Strait of Hormuz disruption. Despite recent gains in major indices, rising inflation projections threaten to delay Fed rate cuts and compress equity valuations that are already trading at elevated levels.

• The S&P 500 recovered all prior losses with SPY up 3.53% over the week to $699.94, while QQQ posted its longest winning streak since 2021 with a 5.17% weekly gain
• Oil market disruption saw WTI crude spike to $114.58 before settling near $100.72, with analysts warning sustained prices at this level could trigger a 10% equity selloff
• The Fed held rates at 3.75% with markets entering 2026 at a forward P/E around 22x, leaving little room for error if the rate-cut timeline is pushed back further

U.S. stock markets rose on Thursday with the Dow Jones up 160 points (0.35%) as investors reacted positively to signs of potential diplomatic progress in the Iran conflict. The S&P 500 and Nasdaq reached fresh record highs, erasing all losses since the conflict began, supported by optimism over Middle East de-escalation and resilient corporate earnings.

• President Trump stated the Iran war is 'very close to over' and Tehran wants to 'make a deal very badly,' fueling risk appetite across equities
• The Nasdaq Composite extended gains for an 11th consecutive day, advancing 1.59% on Wednesday to a new record high
• Earnings season is supporting the rally, particularly from the banking sector showing consumer strength, with PepsiCo and Travelers among recent reporters

Global equity markets surged to record highs as US-Iran tensions eased, with diplomatic progress appearing likely through Pakistani mediation. Strong US bank earnings, with over 80% of companies beating forecasts, and robust corporate performance shifted investor focus back to fundamentals. Asian markets led gains with Japan's Nikkei rising 2.5% to a record and oil prices stabilizing below $100 per barrel.

• More than 80% of companies reporting Q1 earnings have beaten analyst expectations, with Bank of America and Morgan Stanley leading bank sector strength
• China's Q1 GDP grew 5.0%, exceeding the 4.8% forecast and hitting the upper end of its 4.5-5.0% annual target range despite mixed retail and industrial data
• The US dollar weakened for an eighth consecutive session to six-week lows as safe-haven demand faded, while oil held below $100 with Brent at $96 and WTI at $92

New York Fed President John Williams warned that the Iran war is already showing economic impacts, with signs of rising prices and slowing growth creating stagflation concerns. While he expects energy prices to eventually decline if supply disruptions ease, the conflict presents risks to both inflation control and employment, complicating the Fed's dual mandate.

• Williams noted 'increasing disruptions' in energy-related supply chains, with the New York Fed's own data showing conditions in March 2026 were the most strained since early 2023
• He projects real GDP growth of 2%-2.5% for 2026 with inflation around 2.75%-3%, not returning to the Fed's 2% target until 2027
• Markets are pricing in 100% probability the Fed holds rates steady at its April 28-29 meeting, with no cuts expected for the remainder of 2026

Federal Reserve rate cut expectations swung dramatically from 14% to 43% and back to 14% within five trading days in April 2026, driven primarily by volatile oil prices following a short-lived U.S.-Iran ceasefire. March CPI data showed inflation at 3.3% year-over-year, the highest since April 2024, with energy prices surging 10.9% monthly due to geopolitical tensions. Markets now view WTI crude oil's movement around key technical levels as the primary driver of Fed policy expectations.

• March CPI rose 0.9% monthly and 3.3% annually, driven almost entirely by energy costs up 10.9% with gasoline surging over 20%, while core inflation remained subdued at 2.6% year-over-year.
• WTI crude oil is pivoting around $103.15 per barrel, with a break above $117.63 potentially raising Fed rate hike odds and a drop below $91.05 reopening rate cut possibilities by late 2026 or early 2027.
• Fed minutes indicated policymakers remain cautious, with some members leaving open the possibility of rate hikes if inflation persists, signaling the central bank will not react to short-term energy price movements.

Global stocks rallied to new highs after a six-week downturn driven by Middle East tensions, as potential U.S.-Iran peace talks and strong corporate earnings encouraged investors to refocus on market fundamentals. The MSCI all-country index surged Thursday with major Asian markets hitting records, while the dollar unwound its safe-haven gains and oil prices retreated below critical levels.

• Over 80% of U.S. companies reporting first-quarter earnings have beaten analyst expectations, with major banks and tech firms leading the positive results
• China's Q1 GDP grew 5.0%, exceeding forecasts of 4.8% and reaching the top of its 4.5%-5.0% annual target range despite the Iran war's impact on global energy costs
• Oil prices stabilized around $96/bbl for Brent and $92/bbl for WTI, staying below the critical $100 threshold as geopolitical tensions eased with potential Iran-Israel negotiations

Major U.S. banks reported mixed first-quarter 2026 results, with all six major institutions beating profit expectations driven by strong trading revenues amid market volatility from Middle East tensions and tech selloffs. However, uncertain geopolitical conditions have tempered optimism about a sustained dealmaking recovery despite an initial surge in investment banking fees.

• Trading desks were the biggest winners as market turmoil across equities, fixed income, and commodities drove significant revenue increases at all major banks
• Net interest income rose and loan growth picked up pace as borrowers resumed taking on debt, though banks remain cautious due to labor market softness and uncertainty around Federal Reserve rate policy
• All six major banks beat analyst profit estimates, but bank stocks have underperformed the broader market in 2026, down 1.8% versus a 2% gain for the S&P 500 through mid-April

Dow futures rose nearly 0.1% on Thursday as investors await key earnings reports from Travelers, Charles Schwab, PepsiCo, and Netflix. The rally has been driven by diplomatic optimism over easing Middle East tensions, but analysts warn the market remains fragile and needs strong earnings to justify current valuations near record levels.

• S&P 500 futures gained 0.19% while Nasdaq 100 futures outperformed at 0.41%, with optimism tied to potential Iran diplomacy and regional ceasefire discussions
• Earnings season has started strong with banks beating expectations, but the critical test is whether the rally broadens beyond banks and tech through guidance on demand, pricing, and margins
• Market vulnerability remains high as investors are betting on de-escalating geopolitical risks while chasing earnings, a combination that can unravel quickly if either pillar weakens

Analysts are debating the future of the U.S. dollar's dominance after Deutsche Bank predicted the rise of a 'petroyuan' amid the Iran war, while Franklin Templeton countered that no credible alternative exists. The dollar fell nearly 10% in the first half of 2025 amid tariff uncertainty but temporarily strengthened during the Iran conflict. The debate centers on whether the dollar faces structural decline or will maintain its reserve currency status despite erosion.

• The dollar's share of global reserves has declined from over 70% in 1999 to just over 50% today, though it remains dominant with China's renminbi comprising only 3% of reserves.
• Deutsche Bank argues the Iran war marks the beginning of 'petroyuan' emergence, while Franklin Templeton calls this analysis 'remarkably simplistic,' noting oil exporters prefer dollars for access to deep, liquid capital markets.
• Analysts suggest a middle-ground scenario where the dollar's reserve status is gradually eroded but not eliminated, citing fading U.S. fiscal credibility and Trump undermining the Federal Reserve as structural concerns.

Japan's financial regulator plans to make private credit a key pillar of its new financial strategy to meet rising corporate funding demand driven by surging M&A activity. This comes as Japanese companies shift behavior due to inflation, investing long-held cash piles, while the Takaichi administration prioritizes investment-led growth. The move contrasts with turbulent overseas private credit markets facing heavy redemptions.

• M&A activity involving Japanese companies more than doubled in the previous year to a record 51 trillion yen ($345 billion), fueled by multi-billion dollar take-private deals
• Japan's private credit market remains underdeveloped compared to overseas markets, with companies historically relying on traditional bank lending rather than higher-risk financing
• Major financial institutions are entering the market, with Sumitomo Mitsui Financial Group in talks with Nippon Life Insurance to establish a private credit fund for leveraged buyout loans

Danish energy trader Danske Commodities, owned by Equinor, reported a 52% profit decline in 2025 to 186 million euros, falling below its guidance range of 100-200 million euros. The drop was attributed to persistently low market volatility and challenging conditions in gas markets throughout the year.

• Adjusted earnings before tax fell to 186 million euros from 386 million euros in 2024, missing the company's guided range
• Low volatility in both gas and power markets suppressed trading opportunities, though strong power trading and asset management partially offset the impact
• The company expanded its renewable energy portfolio by 2 gigawatts year-over-year to reach 16 GW in wind, solar, and flexible assets