April 20th Pre-Market

Good Morning

Rough weekend for the peace talks. Iran hit a tanker, we grabbed one of their ships, and Hormuz basically shut down. But futures already cut their losses in half and oil can't crack $100.

Translation: nobody actually believes this war lasts. I think the tape is right, if I were to guess…. Wednesday's ceasefire gets extended and this dip gets bought. Keeping it light this a.m. with heavier details this afternoon.

Let's dig in…

Today's Big Picture

1. Talks Broke, But The Tape Isn't Buying It 

Iran hit a tanker, the U.S. seized a ship, and Hormuz traffic fell from 20 vessels Saturday to three in twelve hours. Yet Dow futures cut their losses in half before the open and crude is still under $100. That tells you the market sees this as noise on the path to a deal, not a new regime. Wednesday's ceasefire deadline is the real test.

2. The Rally Has A Weak Spot, And It's Memory Chips 

Thirteen up days pulled everyone back into the same crowded names. BTIG points out Sandisk now trades further above its 200-day average than anything in the dot-com era, with Micron close behind. VIX is back near 19 after eight quiet sessions. If Tesla's print disappoints Wednesday, memory is where the air comes out first.

3. Google's Marvell Deal Is About Demand, Not Competition 

Google is working with Marvell on a new TPU and a matching memory processing unit. Broadcom already builds the current TPU, so the easy read is MRVL wins, AVGO loses. The better read: Google is building an entire second stack, which only happens when one vendor can't keep up. Inference demand is running ahead of what the Street has modeled.

Market Overview

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Stock Spotlight (pre-market)

TopBuild $BLD ( ▲ 5.72% )  

Up big in the premarket after QXO $QXO ( ▲ 3.09% )  agreed to acquire the insulation distributor for $17 billion. QXO is down on its own deal in a classic acquirer target split.

Compass Pathways $CMPS ( 0.0% )  

Ripping premarket after Trump signed an executive order directing the FDA to fast track psychedelic drug reviews. The order cuts review time from 6-10 months down to 1-2 months for breakthrough tagged drugs. FDA commissioner said decisions could come this summer. Atai and GH Research are moving on the same catalyst.

AST SpaceMobile $ASTS ( ▼ 5.95% )  

Down hard after a Blue Origin launch dropped its satellite into the wrong orbit. The company says insurance covers the loss and it still plans monthly launches in 2026. The tape is treating it as an execution warning, not a one-off.

Eli Lilly $LLY ( ▲ 2.55% )  

In advanced talks to acquire Kelonia Therapeutics for more than $2 billion according to the Wall Street Journal. The report says the deal could be announced as soon as today.

Alaska Air Group $ALK ( ▲ 10.33% )  

Reports earnings today and the whole airline group is already bleeding on fuel costs. American Airlines, Delta, and United are all down early.

Exxon Mobil $XOM ( ▼ 3.65% )  

Catching a bid on the oil move with crude back toward $88. The real question is whether this is a two day headline trade or the start of something bigger if Hormuz stays shut for weeks

What to Watch

Hormuz Shipping Traffic 

Saturday saw 20 vessels clear. The last twelve hours saw three. Near zero all session and oil stays bid into the close. A session with 15+ ships and crude gives back most of today's move.

Warsh Confirmation Hearing (Tuesday)

 Tillis has vowed to block until the Powell DOJ probe resolves. If Warsh cannot clear committee, Fed succession turns messy with Powell's term ending May 15.

Defense + AI Earnings Later This Week 

Lockheed and RTX print with the war premium still fresh. IBM and ServiceNow give the enterprise AI spend read after the Marvell Google headline. These four frame whether next week's trade is war or AI.

- John

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