April 29th Market Overview

Happy Wednesday

Markets sat still all day while the news piled up around them. The Fed held with the worst split since '92. Powell announced he's staying on the board past May 15.

After the close Microsoft and Alphabet both delivered strong beats, with Google Cloud crushing consensus by $2 billion. I think the OpenAI freakout from Tuesday is looking pretty overdone already.

Let’s dig in...

Today's Big Picture

Jerome Powell Digs In

The Fed held rates with four dissents, the worst split since 1992. Then Powell dropped the real news. He's staying on the board past May 15. That blocks Trump from a Fed majority. Warsh will be chair without the votes.

The Energy Wrecking Ball

Brent touched $119 intraday. Trump killed Iran's offer to reopen Hormuz, so the blockade stays for now. Pump prices hit $4.23 near me and thats about national avg. Powell said the inflation pain hasn't even peaked yet. The Fed can't fix oil with rates.

Two Down, AI Demand Looks Real 

Google Cloud put up $20 billion, $2 billion above consensus and accelerating hard. Microsoft beat across the board too, though capex came in $3 billion light. Either MSFT is getting disciplined or losing share to Google Cloud. The OpenAI revenue panic looks overdone either way. Amazon and Meta still ahead tonight. Both shot up and quickly are selling off but its early after hours still.

Market Overview

Index Performance

Stock Spotlight

Starbucks $SBUX ( ▲ 8.39% )  
beat estimates and raised full-year guidance. Niccol's turnaround is working and consumers are still paying up for coffee. Wells Fargo declared "Starbies is Back."

Seagate $STX ( ▲ 10.76% )  
posted a monster quarter on enterprise AI storage demand. Morgan Stanley raised its price target to $767 and called it a top pick.

Microsoft $MSFT ( ▼ 1.19% )  
beat on revenue, earnings, and Azure growth. Net income hit $31.78 billion. The interesting line was capex at $31.9 billion, well below the $34.9 billion consensus. Either Satya is getting disciplined or the memory chip shortage is throttling spend.

Alphabet $GOOGL ( ▲ 0.05% )  
beat with revenue at $109.9 billion and Google Cloud topping $20 billion versus the $18 billion consensus. That's a $2 billion beat in the segment everyone was watching. Stock up after hours. With MSFT capex light and GOOGL Cloud accelerating, the share-shift question is back on the table.

Big Name Updates

Bloom Energy $BE ( ▲ 24.88% )  
crushed Q1 and raised guidance. Hyperscalers are buying fuel cells to bypass grid delays and bring data centers online faster. Evercore took its price target to $295 from $179.

Pershing Square USA $PSUS ( 0.0% )  
opened at $42 versus a $50 IPO price. Ackman's Berkshire dream got a thumbs down from the market on day one.

Robinhood $HOOD ( ▼ 13.33% )  
missed on revenue with crypto fees down sharply. Retail is sitting out and that's the core engine.

SoFi $SOFI ( ▼ 15.44% )  
grew adjusted revenue to a record but the stock got hit on soft revenue guidance. The banking-as-a-service platform is still the drag.

Disney $DIS ( ▼ 0.23% )  
scrapped the ESPN spinoff. New CEO Josh D'Amaro wants live sports inside the streaming bundle.

Other Notable Company News

Elevance $ELV ( ▲ 3.76% )  
upgraded to buy at BofA. Medicaid margins look like they bottomed.

Radian $RDN ( ▲ 3.79% )  
upgraded to buy after shedding its real estate adjacencies to focus on core mortgage insurance.

GE HealthCare $GEHC ( ▼ 13.0% ) cut full-year EPS guidance and lowered its free cash flow outlook.

MercadoLibre $MELI ( ▼ 1.49% )  
downgraded to neutral at UBS. Heavy logistics spend will pressure margins for years.

Avis $CAR ( ▼ 0.13% )  
posted a wider Q1 loss. Still working off the short squeeze that took it to $847 last week.

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Sector Watch

Bond Market

Tomorrow brings the $22 billion 30-year auction with the long bond already testing five percent. Demand here will say more than Powell's presser about how the world is really pricing US debt under wartime inflation. Watch the bid-to-cover.

Policy Watch

The Fed

• Senate Banking Committee advanced Warsh on a party-line vote. Full Senate vote expected before the June Fed meeting.

• Powell stays on the board past May 15 until the DOJ probe is "well and truly over." His governor term runs through January 2028.

• Trump's appointees will hold three of seven board seats instead of four. That blocks any aggressive cut push from the new chair.

International Energy

• UAE leaves OPEC on May 1. Russia says it's staying.

• Iran warned of "unprecedented military action" over US seizures of Iran-linked ships.

• Netanyahu meets Trump in the US next week.

Trade and Geopolitics

• Trump rejected Iran's offer to reopen Hormuz. Blockade stays until a nuclear deal lands.

• Bank of Canada held rates at 2.25% citing Iran war inflation and US tariff uncertainty.

What to Watch

10 AI Stocks to Lead the Next Decade

MarketBeat did an excellent job on this AI infrastructure leaders report

Apple Earnings

Apple reports Thursday after the close. China numbers are the tell. Local competition has been chipping away at iPhone share for two quarters.

Exxon and Chevron Friday

The integrated majors report into a wartime oil price. Production capacity commentary is what matters most.

Thanks for reading - you are now the more informed 🙂

- John

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