April 14th Market Overview

Happy Tuesday

The S&P 500 is closing within half a point of a record today while a war is still running. Oil below $100, inflation surprised to the downside. The market is pricing this conflict as basically resolved.

The ceasefire expires next week with nothing on the calendar. I love the optimism. I just want a little confirmation to go with it.

Let’s dig in...

Today's Big Picture

This Market Is Moving Faster Than the News

The VIX went from above 30 to below 20 in eight trading sessions. During last year's Liberation Day sell-off, that same move took 26 days. The S&P 500 just closed within half a point of a record, 53 sessions off the March 30 low. Morgan Stanley's Mike Wilson called it this morning: the lows are in. Today made that case a lot harder to argue with. The reality is, we are still at war with Iran without an exit plan set in place.

Rate Cuts Came Back to Life Today

This morning, traders were pricing roughly a one-in-seven chance of a Fed cut by year-end. By close, that was one-in-three. One PPI print did that. Goldman Sachs flagged today that six G10 governments have now shifted toward expecting rate hikes because of energy costs. The US Fed is the only major central bank still leaning toward cuts. That gap matters for the dollar.

Bank Earnings Are Hiding a Bigger Story

The bank earnings headlines were this morning's news. What came out during analyst calls is more interesting. Wells Fargo disclosed $36 billion in lending tied to private credit funds. JPMorgan disclosed $50 billion. Citigroup $22 billion. Banks say 98% is investment grade with zero historical losses. UBS said today that private credit default rates will double to 9 to 10% this year driven by AI disruption of software borrowers. Someone is wrong here, and it matters a lot.

Market Overview

Index Performance

Stock Spotlight

Oracle $ORCL ( ▲ 4.36% )  
expanded its fuel cell power deal with Bloom Energy $BE from 1.2 to 2.8 gigawatts for its data centers. Bloom delivered a system to Oracle in 55 days last year. The utility grid cannot move that fast. AI infrastructure demand is going around it.

General Motors $GM ( ▲ 3.58% )  
got upgraded to Buy by Deutsche Bank with a $90 price target. The specific thesis is the 2027 truck platform overhaul and a software and services revenue line that's just starting to show up in the numbers.

LVMH $LVMUY ( ▲ 3.52% )  
reported just 1% revenue growth in Q1 as Middle East sales fell hard in March. The part worth paying attention to: the US grew and Asia ex-Japan had its best quarter since 2023. The war is hurting luxury where tourists used to flow, not destroying it where actual wealth sits.

Big Name Updates

Tesla $TSLA ( ▲ 3.39% )  
was upgraded to neutral at UBS with a $352 price target. The analyst said it plainly: the stock trades on narrative, not fundamentals. The narrative here is robotaxi and physical AI eventually working. UBS is no longer betting against that.

Robinhood $HOOD ( ▲ 8.16% )  
got a new outperform rating from Bernstein with a $130 price target. Their model is 9% above Wall Street on revenue and 16% above on earnings. The gap is crypto recovery and prediction markets, where they say consensus is just not paying attention yet.

Janus Living $JAN ( ▼ 3.55% )  
got initiated with buy ratings from Bank of America, Morgan Stanley, and JPMorgan on the same day. It's a pure-play senior housing REIT spun out of Healthpeak in March. The first baby boomers turn 80 this year. The setup is not subtle.

Other Notable Company News

CarMax $KMX ( ▼ 15.43% )  
beat earnings estimates but revenue and profit both declined from a year ago. The market sold it. The direction matters more than the beat.

Lucid Group $LCID ( ▼ 4.71% )  
filed for a new common stock offering with no size or timing given. More dilution is coming.

United Airlines $UAL ( ▲ 2.17% )  
and American Airlines $AAL: the merger chatter from this morning held. American finished up on the day. Regulatory reality will test this story quickly.

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Sector Watch

Bond Market

Yields fell and the dollar dipped as inflation fears cooled after the PPI print.

The UK paid its highest yield on a 10-year sale since 2008 today. Europe is absorbing an energy shock through its sovereign debt market in real time.

Policy Watch

The Fed

Rate cut odds moved sharply today on the PPI data. Goldman Sachs put out a note this morning that six G10 governments now expect rate hikes in 2026, up from three before the war started. The US is the outlier still leaning toward cuts. Kevin Warsh's Senate confirmation hearing for Fed chair is scheduled for next week.

Iran War

• Second round of US-Iran talks is under discussion, nothing officially scheduled

• Iran is reportedly weighing a pause on Hormuz shipping restrictions to keep talks alive

• The ceasefire expires next week. The market has already priced a deal. That gap is the risk.

• US warships are actively blockading Iranian ports as of today

International

• The IMF cut its 2026 global growth forecast and warned a prolonged conflict scenario could bring global growth near a stall while pushing inflation well above target

• Citadel's Ken Griffin said today a recession is unavoidable if the Strait of Hormuz stays shut for another six to twelve months

• The IEA now expects global oil demand to contract in 2026. Bank of America's fund manager survey found 34% of investors expect oil to end the year between $80 and $90

What to Watch

Bank of America and Morgan Stanley

Both report tomorrow morning. The bar is set. Private credit exposure will be the first question on every analyst call after today's disclosures. Net interest income is the number that moves the stock.

Netflix Earnings

Reports Thursday. First major consumer media company to report during the oil shock. Ad spending tends to move before subscriber counts do. That's the line I'm watching.

Kevin Warsh Confirmation Hearing

Scheduled for next week. His financial disclosures this week showed stakes in tech startups and over $10 million in consulting fees. The Senate Banking Committee's reaction to those disclosures sets the tone before he even walks in.

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Thanks for reading - you are now the more informed 🙂

- John

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