General Market News

The core personal consumption expenditures (PCE) price index rose 3.2% in March, meeting economist expectations. Additionally, GDP grew 2% in the first quarter, providing key data points on inflation and economic growth as policymakers assess the health of the U.S. economy.

• Core PCE inflation hit 3.2% year-over-year in March, matching the Dow Jones consensus forecast
• First quarter GDP expanded at a 2% rate, indicating moderate economic growth
• The core PCE index is the Federal Reserve's preferred inflation measure, making this data critical for monetary policy decisions

US equity indices rallied on Thursday as interest rates declined, with the Nasdaq 100 briefly hitting a new all-time high before pulling back slightly. The rate-equity correlation continues to drive market direction, though indices appear poised for consolidation after recent strong gains. All three major indices showed positive momentum, with the Dow Jones posting the strongest daily performance at +1.06%.

• Nasdaq 100 reached a new all-time high overnight but analyst suggests pullbacks to 26,275 level would offer better entry points after the recent rapid ascent
• Dow Jones 30 is holding above 49,000 and forming a potential bullish flag pattern, though the 50,000 level may present resistance in the near term
• S&P 500 is testing all-time highs again with 7,000 identified as key support, though sideways consolidation is expected as the market digests recent momentum

Deutsche Bank has debunked the 'Sell in May and go away' trading strategy, finding it underperformed buy-and-hold in 25 of 39 years since 1987. The apparent long-term outperformance is entirely driven by just three exceptional years during the dot-com bust (1998, 2001, 2002), and the strategy has underperformed in eight of the last 10 years. The bank concludes the seasonal trade offers no more certainty than a coin toss and advises investors to focus on fundamentals rather than calendar-based rules.

• The strategy showed 9% annualized returns versus 7.4% for buy-and-hold since 1987, but this entire outperformance disappears when excluding three years (1998, 2001, 2002) from the dot-com crash period
• Even a modified version using European government bonds instead of cash during summer months only beat the market in 13 of 28 years, with a median relative performance that is slightly negative
• In 2025, following the 'Sell in May' strategy cost investors 2.7 percentage points against the market, while US investors missed a 14% equity gain last summer by holding 3%-returning Treasuries instead

President Trump announced a naval blockade of Iran to force nuclear negotiations, claiming Iran's oil infrastructure would 'explode' within days from storage overflow. However, analysts estimate Iran has storage capacity and floating tankers to sustain the blockade for 26 to 76 days, allowing Tehran to shut down oilfields in an orderly manner without permanent damage while the global economic impact intensifies.

• Iran's oil loadings have collapsed from 2.1 million barrels per day to 567,000 bpd, with no confirmed Iranian tanker passages through the U.S. blockade zone
• Iran has storage capacity for 26-76 days depending on use of onshore tanks, floating storage, and returning vessels, giving Tehran weeks to months before facing 'excruciating pain'
• Iran holds 120 million barrels of oil on tankers east of the blockade (equivalent to two months revenue) that could be sold to customers like China, though cash collection may be challenging

Despite oil prices surging over 6-7% amid Iran war concerns and pushing California gas prices to $5.98 per gallon (41% above the national average), financial strategists remain bullish on consumer stocks. YieldMax's Mike Khouw argues that consumer staples will continue selling regardless of geopolitical pressures, while discretionary stocks show resilience as March retail sales grew for consecutive periods.

• Oil shock hitting consumers hard: California gas averaged $5.98/gallon as of Wednesday, 41% above the national average which hit a new 2026 high
• Consumer staples seen as resilient with products like 'diapers and toilet paper' expected to sell regardless of geopolitical conditions
• Retail sales data shows strength with March growth continuing for consecutive periods, driving bullish sentiment in consumer discretionary stocks despite recent punishment

Oil prices surged to four-year highs amid the Iran war crisis, with Brent crude hitting $126 per barrel, creating inflationary pressures as the Federal Reserve held rates steady. The Fed removed its easing bias with three dissenting votes, while futures markets now price in potential rate hikes rather than cuts. Major tech companies reported earnings with mixed results, though combined AI-related capital expenditure is expected to exceed $700 billion in 2026.

• Brent crude reached $126/barrel (four-year high) on Iran war concerns, prompting the Fed to eliminate its easing bias despite holding rates steady; markets now see a one-in-three chance of a rate hike by April 2027
• Fed Chair Powell announced he will remain as a board member after his chairmanship ends next month, preventing an immediate Trump appointment vacancy until early 2028
• Big Tech earnings showed divergence: Alphabet surged 8% on cloud strength while Meta dropped 6% on capex concerns, but combined 'hyperscaler' AI spending is projected to top $700 billion for the year

Oil prices surged to four-year highs amid the Iran war, with Brent crude hitting $126 per barrel, overshadowing mixed big tech earnings results. The Federal Reserve held rates steady but three regional presidents voted to remove easing bias language, while futures markets now price out rate cuts entirely for 2026 and assign one-in-three odds of a hike by April 2027. Major central banks including the ECB and Bank of England are expected to warn of oil-related inflationary pressures.

• Brent crude reached $126/barrel (four-year high) on renewed Iran war tensions and potential U.S. military action, with the 30-year Treasury yield briefly topping 5% for the first time since September
• Fed Chair Powell announced he will remain as a board member after his chairmanship ends next month, preventing an immediate vacancy for President Trump to fill until early 2028
• Tech earnings were mixed: Alphabet surged 8% on cloud strength while Meta dropped 6% on capex concerns, though total 2026 spending from hyperscalers is now expected to exceed $700 billion for AI infrastructure

Small-cap stocks tracked by the Russell 2000 index have significantly outperformed the S&P 500 in 2026, rising 9.22% year-to-date compared to the S&P 500's 4.05% gain. The Russell 2000, comprising the smallest 2,000 of America's 3,000 largest public companies, features over a dozen stocks that have more than doubled in value this year, driven partly by AI-related demand.

• The Russell 2000 rallied from 2,508 to over 2,739 in 2026 (9.22% gain), while the S&P 500 rose from 6,858 to 7,136 (4.05% gain) over the same period.
• Top Russell 2000 performers include Bloom Energy (up 235.94%), Applied Optoelectronics, and Aehr Test Systems, many benefiting from AI boom demand for data center infrastructure and semiconductor equipment.
• Some prominent Russell 2000 names underperformed, including Strategy (up only 4.28%), Super Micro Computer (down nearly 21%), and defense stocks AeroVironment and Kratos Defense (down 23.93% and 21.44% respectively).

Delta Electronics, a major supplier of power and cooling systems for AI datacenters, warned that rising oil prices and material shortages will increase costs in coming quarters. The Taiwan-based company reported strong Q1 2025 results with revenue up 34% year-over-year to $5.02 billion, driven by AI datacenter demand. Delta is expanding capacity across China, Thailand, the U.S., and Taiwan to meet surging demand from clients including Nvidia, Google, and Meta.

• First-quarter revenue reached T$159.35 billion ($5.02 billion), up 34% year-over-year, with gross profit jumping 56% to $1.86 billion driven by AI datacenter build-out
• The company plans capital expenditure exceeding T$46.1 billion ($1.46 billion) in 2025 as it expands capacity across multiple countries amid tight supply conditions
• Delta is Taiwan's second most valuable company with $178.46 billion market cap, trailing only TSMC, and serves major AI players including Nvidia, Google, and Meta

China exported 60 tons of yttrium oxide to the U.S. in March, the largest shipment since export controls were imposed in April 2025 during the trade war. This specialty rare earth is critical for aerospace and chipmaking, and the resumption of exports may ease severe shortages that caused prices to surge 6,900% over 12 months.

• The 60-ton March shipment is 50% larger than all yttrium shipped to the U.S. since China imposed controls last April, though total exports remain down 75% year-over-year
• Yttrium oxide prices rose 6,900% in the 12 months to February due to export restrictions, prompting aerospace and semiconductor companies to lobby Washington for intervention
• The material is essential for high-temperature coatings on jet engines and power turbines, with aerospace-defense ties likely contributing to Beijing's previous reluctance to approve exports

U.S. stock futures fell Thursday as Brent crude surged nearly 7% to $118.80 per barrel amid a tightening Iran blockade, overshadowing strong Big Tech earnings. The Federal Reserve held rates in its most divided vote since 1992, with an 8-4 split reflecting disagreement over the policy path. Investors await critical GDP and PCE inflation data that could reshape rate cut expectations.

• Dow futures dropped 110 points (0.20%) while Brent crude hit $118.80, its highest since late 2022, after Trump rejected Iran's proposal to reopen the Strait of Hormuz
• The Fed voted 8-4 to hold rates at 3.5%-3.75%, the most divided decision since October 1992, with dissenters split between wanting immediate cuts and opposing easing language
• Meta stock fell after raising 2026 capex guidance to $125-145 billion from $115-135 billion, while Alphabet rose 6% on record cloud revenue; first-quarter GDP and March PCE data due Thursday

U.S. banks say they are largely uninformed about an expected White House executive order that would require them to collect citizenship and immigration status data from customers. Treasury Secretary Scott Bessent confirmed the administration is working on the order, but has provided few details, leaving the industry facing potential costs of $2.6-$5.6 billion annually and massive operational challenges.

• Banks would need to overhaul IT systems and train staff to verify over 180 different visa types, with verification for existing customers deemed 'almost impossible' by executives
• The order could disproportionately impact lower-income Americans, as over 9% of voting-age citizens (21.3 million people) lack readily available proof of citizenship, and roughly half of Americans do not have passports
• Implementation faces major legal uncertainties, as it's unclear what statutory authority regulators could invoke, potentially opening the door to 'significant legal challenges' according to policy experts

China's securities regulator approved DSC Holdings, a Cayman Islands-incorporated software company, for a Nasdaq listing, signaling that 'red-chip' firms registered abroad can still access U.S. markets despite recent restrictions. This is the first approval for a U.S. listing in four months and only the third in 12 months, easing fears of a blanket ban on overseas listings by such companies.

• Red-chip firms are registered in tax havens but hold Chinese assets; recent guidance had suggested some firms must redomicile to China before listing in Hong Kong
• Only about 50 mainland Chinese companies currently await approval for U.S. listings, down from over 200, as Beijing has required regulatory approval since March 2023
• Experts note the CSRC is taking a case-by-case approach rather than blanket restrictions, though only companies with strong compliance records are likely to succeed

Major automakers including Ford, GM, Mercedes-Benz, and Stellantis have begun booking approximately $2.3 billion in expected tariff refunds on their Q1 financial statements, following a February Supreme Court ruling that struck down Trump administration tariffs imposed under IEEPA. The companies are among the first to quantify anticipated reimbursements from up to $166 billion in total refunds due to importers, though they risk potential backlash from President Trump, who has encouraged companies not to seek refunds.

• Ford expects to recover $1.3 billion in tariffs, GM anticipates $500 million, and Stellantis around $467 million (400 million euros), though companies acknowledge uncertainty about when actual payments will be received
• Trump told CNBC that companies opting not to seek refunds might benefit, creating a potential political risk for automakers pursuing reimbursements despite their fiduciary duty to shareholders
• Despite potential refunds, automakers still face significant tariff costs, with GM projecting $2.5-3.5 billion in tariff-related profit reduction this year and Ford estimating $1 billion in net tariff costs from ongoing levies on steel, aluminum, and imports from Mexico and Canada

Euro zone inflation jumped to 3% in April from 2.6% in March, exceeding the ECB's 2% target, while economic growth nearly stalled at 0.1% in Q1. The Iran war and resulting energy crisis are driving fuel prices higher and dampening business confidence, raising fears of stagflation in Europe.

• Inflation accelerated to 3% in April, up from 2.6% in March and 1.9% in February, driven primarily by fuel price increases from the Iran war and the Strait of Hormuz blockade
• The ECB is widely expected to hold its benchmark interest rate at 2% on Thursday as it assesses inflationary pressures versus growth concerns
• Economists warn of potential stagflation and urge the ECB not to raise rates, cautioning that policy tightening could trigger an unnecessary mini-recession in late 2026 or early 2027

Democratic lawmakers sent a letter to the CFTC urging the agency to prohibit insider trading and ban event contracts on elections, war, military action, and sports in prediction markets. The push comes as platforms like Kalshi and Polymarket have surged in popularity, drawing scrutiny after incidents including a $400,000 bet placed ahead of military action in Venezuela. The CFTC's public comment period on prediction market regulation closed Thursday.

• Sports contracts make up nearly 90% of bets on Kalshi but only 38% on Polymarket, with lawmakers arguing these contracts represent gambling that violates states' rights to regulate such activity
• Democratic senators introduced bills to bar government officials from using prediction markets entirely and to prohibit event contracts on elections and military actions
• A federal appeals court ruled in April that New Jersey regulators could not prevent prediction markets from offering sports bets, as the CFTC asserts exclusive federal jurisdiction over these platforms

France's three major banks (BNP Paribas, Societe Generale, and Credit Agricole) reported disappointing first-quarter results on April 30, with their investment banking divisions significantly underperforming Wall Street rivals. Trading revenues lagged as U.S. banks capitalized on market volatility from geopolitical tensions, while French banks were hurt by a weaker dollar that reduced reported earnings from their significant international operations. Despite meeting overall expectations due to resilient retail banking, shares fell 3.5-4.4% as the results highlighted European banks' ongoing competitive disadvantage in investment banking.

• SocGen's fixed income trading revenue dropped 18% citing weaker client activity and tough European rate markets, while U.S. banks reported sharply higher trading revenues from volatility-driven client activity
• The weaker dollar significantly dragged on results as all three French lenders generate substantial revenues outside the eurozone, reducing reported earnings even where underlying business held up
• Banks increased loan loss provisions cautiously due to Iran war concerns and energy price impacts, though executives stressed asset quality remains sound and moves are largely precautionary

European banks are facing increased scrutiny over their exposure to the troubled private credit sector during earnings season. Major lenders including Barclays, UBS, Deutsche Bank, and Santander have sought to reassure investors that their positions are well-diversified and minimal, typically representing less than 1% of total exposures. The concerns intensified following the collapse of U.K. mortgage provider Market Financial Solutions in February and ongoing stress in U.S. business development companies.

• Barclays disclosed £15 billion ($20.3 billion) in private credit exposure and took a £228 million hit from the MFS collapse, which is under investigation by the U.K.'s Financial Conduct Authority for suspected fraud
• Bank of America's credit investor survey shows investment-grade investors remain highly concerned about spillover risks from private credit, citing 'opaque' exposure levels at banks and insurers, while high-yield investors appear more sanguine
• European banks' private credit exposures range from 'immaterial' (Santander at under 1%) to 0.5% of balance sheet (UBS), with most lenders emphasizing focus on senior corporate lending and strict concentration limits

Global rice supply faces significant strain in 2025-26 as farmers across Asia reduce planting due to fertilizer shortages and soaring fuel costs stemming from the Iran war, which has disrupted flows through the Strait of Hormuz. The emerging El Nino weather pattern threatens to further reduce output through hotter, drier conditions, potentially tightening supplies of the world's most consumed staple grain despite current ample inventories.

• Key exporters Thailand and Vietnam, plus major importers Philippines and Indonesia, are cutting rice acreage as fertilizer prices have risen 15-40% and farmers reduce input usage to manage costs
• Philippines faces potential production drop of up to 6 million tons from typical 19-20 million ton output, leaving the country in a 'precarious position' given uncertain import availability
• FAO chief economist warns situation could become 'pretty serious' if Strait of Hormuz remains blocked beyond 2-3 weeks, though global stockpiles of 42 million tons in India provide some cushion

India's Securities and Exchange Board (SEBI) has approved a change of control at RBL Bank, marking a key regulatory milestone for Emirates NBD's proposed $3 billion acquisition of a 60% stake in the Indian lender. The deal, announced in October 2025, represents one of the largest cross-border transactions in India's financial sector and still requires additional regulatory approvals.

• SEBI granted approval on April 29, following earlier clearance from India's central bank and competition regulator in January
• Emirates NBD will be allowed to acquire up to 74% of RBL Bank, which will then be reclassified as a foreign bank subsidiary governed by norms for wholly-owned foreign subsidiaries
• The $3 billion deal remains subject to other regulatory approvals and conditions before completion