April 27th Market Overview

Happy Monday

Stocks pushed to records today. The Pakistan peace trip got canceled, Rubio shot down Iran's Hormuz offer, and only four ships made it through the strait yesterday. Oil is still north of $100 with Goldman raising forecasts again this A.M.

Microsoft and OpenAI also rewrote their relationship. The exclusivity era is over. Big week ahead with Mag 7 earnings, what's likely Powell's last Fed meeting, and the Pershing Square IPO.

Let’s dig in...

Today's Big Picture

1. Markets are ignoring the energy risk

The Pakistan peace trip is canceled and the Strait of Hormuz is essentially blocked. Iran offered to reopen it but wants nuclear talks pushed back. Goldman just raised its Q4 Brent forecast to $90 from $80. Stocks hit records anyway. Someone is wrong here.

2. The Microsoft and OpenAI break up

Microsoft lost its exclusive grip on OpenAI. The revenue sharing deal is capped through 2030 and OpenAI can now sell across any cloud. Same day, reports surfaced that OpenAI is working with Qualcomm $QCOM on AI-first smartphone processors targeting 2028. The hardware playbook just got rewritten.

3. Airlines are burning cash

Jet fuel costs are double last year's levels. Higher fares are killing demand and air travel has slowed below 2024 and 2025 levels. Frontier and other budget carriers are pitching Washington for a $2.5 billion relief package. I'd avoid the sector.

Market Overview

Index Performance

Stock Spotlight

United Airlines $UAL ( ▼ 1.5% )  
CEO Scott Kirby confirmed he approached American Airlines $AAL about a merger. American shut the door publicly and called the combination anticompetitive.

Eli Lilly $LLY ( ▼ 0.83% )  
is buying Ajax Therapeutics for up to $2.3 billion in cash. The move pushes Lilly into oncology beyond its obesity and diabetes franchise.

Domino's Pizza $DPZ ( ▼ 9.03% )  
cut its US sales outlook. CEO Russell Weiner said consumer sentiment is at pandemic-era lows. Lower-income shoppers are pulling back hardest.

Big Name Updates

Meta $META ( ▲ 0.31% )  
got blocked by China on its $2 billion Manus AI acquisition on national security grounds. Separately, Meta signed a long-dated deal for space-based solar power to feed its AI data centers by 2030.

Intel $INTC ( ▲ 0.9% )  
pushed to fresh highs, its first all-time high since August 2000. Anyone who bought at the dot-com peak waited twenty-six years to break even.

Verizon $VZ ( ▲ 1.7% )  
beat on earnings and raised full-year guidance. Adjusted EPS came in at $1.28 versus $1.20 expected, with 55,000 net postpaid phone adds.

Other Notable Company News

Alphabet $GOOG ( ▲ 2.43% )  
hit its first intraday record high since February.

Shell $SHEL ( ▼ 2.29% )  
is buying Canada's ARC Resources for $16.4 billion to expand its Montney shale position.

Joby $JOBY ( ▲ 3.29% )  
flew the first NYC point-to-point electric air taxi, JFK to Manhattan in under ten minutes.

Snap $SNAP ( ▲ 8.85% )  
got upgraded to Buy at Redburn with the price target doubled to $10.

Micron $MU ( ▲ 4.57% )  
hit an intraday record near $517 after Melius initiated with a $700 price target.

Intellia $NTLA ( ▼ 3.01% )  
posted strong late-stage gene-editing trial results in hereditary angioedema. FDA submission is coming.

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Sector Watch

Bond Market

Treasury yields barely moved today. Traders are sitting on their hands waiting for the Fed Wednesday. Higher oil forecasts from Goldman and Citi are putting a floor under yields. Tomorrow brings consumer confidence data.

Policy Watch

Fed

The central bank meets this week. Powell chairs his penultimate meeting before Kevin Warsh takes over. Markets see no rate change. Senate Banking Committee votes on Warsh's confirmation Wednesday.

Iran

Trump met his national security team on Iran's Hormuz proposal. Rubio publicly rejected it, saying Iran cannot decide who uses international waters. The naval blockade has stopped or turned around at least 38 ships.

International

• China blocked Meta's $2 billion Manus deal on national security grounds, weeks before a planned Trump-Xi summit.

• China's March industrial profits posted a big year-over-year jump.

• The US military is running an airbridge to move cargo into Middle East bases.

What to Watch

Pershing Square IPO (Wednesday)

Bill Ackman taking his hedge-fund firm and a new fund public together. Roughly $5 billion target, half what he originally wanted. Final pricing Tuesday.

GDP and PCE (Thursday)

First-quarter GDP comes Thursday morning. PCE inflation, the Fed's preferred gauge, drops the same day.

Hormuz traffic counts

Only four vessels passed yesterday. Any uptick signals real diplomatic progress. Continued zero keeps oil bid.

10 AI Stocks to Lead the Next Decade

MarketBeat did an excellent job on this AI infrastructure leaders report

Thanks for reading - you are now the more informed 🙂

- John

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