April 10th Pre-Market

Good Morning

CPI just hit, futures are slightly up, and all eyes are on tomorrow's Iran talks in Islamabad. Worth noting the S&P has strung together seven straight green days heading into a weekend where we still don't know if Iran is even showing up.

Let's dig in...

Today's Big Picture

Gas Prices Made CPI Look Bad. Everything Else Was Fine.

Headline CPI came in at 0.9 month-over-month and 3.3 annually. Ugly. But core hit 0.2 versus the 0.3 expected. That means the war spiked your gas bill but didn't spread into everything else. For now, the inflation damage is contained and that's the best news bulls have gotten in weeks.

Hormuz Is Still Shut And Saturday's Talks Are Already Shaky

Only 4 dry-bulk ships and 3 Iran-linked tankers moved through Hormuz in the past 24 hours. That's nothing. Trump called Iran "dishonorable" for not letting oil through, saying "that is not the agreement we have." Iran and the U.S. are supposed to meet tomorrow in Islamabad but Lebanon is the sticking point. Netanyahu is still striking Hezbollah and says he won't stop. Until Lebanon gets resolved, the strait stays closed and oil keeps a floor under it.

VIX Below 20 And Now A Soft Core CPI. Bulls Are Stacking Evidence. 

The VIX closed below 20 for the first time since the war started. Fundstrat's Tom Lee found four similar setups since 1990 and the median six-month return would put the S&P at 7,400. Now add today's core CPI miss to the bullish side. The tape, the technicals, and the data are all lining up. The question is whether Saturday's talks hold or blow it all up.

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Stock Spotlight (pre-market)

Taiwan Semiconductor $TSM ( ▼ 0.11% )  

Posted record Q1 revenue of $35.6 billion. Five weeks of war, helium supply disruptions, and AI chip demand didn't flinch. Earnings drop April 16 and analysts expect a 49% profit increase.

Lumentum $LITE ( ▼ 0.21% )  

Moving premarket after the CEO told Bloomberg its products are booked solid through 2027. That's not a quarter of visibility, that's two years. JPMorgan raised its price target. Nvidia is an investor here, which tells you where the smart money sees the AI supply chain going.

Coherent $COHR ( ▲ 0.85% )   

Moving in sympathy with Lumentum. Same story, same Nvidia backing, same AI photonics buildout. If you missed Lumentum, this is the name the market is offering as a second chance.

ServiceNow $NOW ( ▼ 7.86% )  

Down after UBS downgraded it from buy to neutral. This matters because UBS was one of the louder bulls on the AI software story.

Sandisk $SNDK ( ▲ 9.05% )  

Got a price target hike to $1,000 from Mizuho. It's already the best performing name on the S&P this year and the upgrades keep stacking. Western Digital got a target bump too.

What to Watch

Michigan Consumer Sentiment (10:00 AM ET) 
The headline number matters less than what consumers expect inflation to look like over the next year. If that number runs hot after this CPI print, it complicates the Fed's path even if core looked clean this morning.

Weekend Risk Is Real 
Iran talks are tomorrow. This market rallied seven straight days into a weekend where the ceasefire could fall apart. If headlines hit this afternoon about Iran skipping Islamabad, expect selling into the close. Friday before a binary weekend event is not the time to be a hero.

Saudi Supply Damage Is The Story Nobody's Watching 
Iranian strikes knocked out 600,000 barrels a day of Saudi production and cut 700,000 in pipeline flows. That's physical damage, not a policy lever. Even if Hormuz reopens, that supply gap takes months to fix. Oil has a floor here.

Have a good day 🙂

- John

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