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Happy Friday
Israel killed the guy running the Hormuz blockade last night and oil still went up. That tells you everything about where this market's head is at. Dow fell into correction, S&P notched its fifth straight losing week, and WTI crude shot straight up all day today.
Trump extended the Iran deadline again but markets have stopped reacting to posts.
The market wants ink on paper.
Let’s dig in...
Today's Big Picture
Iran's Hormuz Blockade Is Tightening, Not Loosening
The Strait has been effectively closed since early March, but today marked an escalation. Iran turned away two Chinese-owned container ships, a big deal because China had been one of the few countries still getting vessels through. A Thai cargo ship ran aground after being hit. Meanwhile, Israel killed IRGC Navy commander Alireza Tangsiri yesterday in Bandar Abbas, the man personally overseeing the blockade. The U.S. says it has now destroyed 92 percent of Iran's large naval vessels. Brent settled at $112.57, its highest close since 2022. WTI touched $99.64. Macquarie says if this runs through June, oil could top $200 and gas hits $7 a gallon. I'm watching this more than anything else.The Fed May Hike Rates This Year
Futures markets now price zero chance of a rate cut in 2026. For the first time, traders see better odds of a hike than a hold. The 10-year yield hit 4.46, highest since July. A month ago investors expected two to three cuts. The energy shock rewrote the math completely.Consumer Confidence Cracks Under Gas Prices
The University of Michigan sentiment index dropped to 53.3, its lowest reading this year. One-year inflation expectations rose to 3.8%. Survey director Joanne Hsu warned that if the conflict drags on or energy prices bleed into broader inflation, these numbers get worse fast.
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Market Overview
Index Performance
Stock Spotlight
Carnival $CCL ( ▼ 5.97% )
cut its full-year earnings forecast to $2.21 per share from $2.48, blaming fuel costs. The company is baking in Brent at $90 through May, $85 in Q3, $80 in Q4.
AstraZeneca $AZN ( ▲ 3.26% )
reported positive results from two late-stage trials for tozorakimab, a drug targeting COPD flare-ups. COPD is often cited as the world's third-leading cause of death. Full results coming at an upcoming medical conference.
Hallador Energy $HNRG ( ▼ 5.06% )
scored an upgrade to buy at Jefferies after locking in capacity hedges at $470/MW-day for two years, more than double their current rate. Analyst sees $22.50 target with multiple hyperscalers active in their region.
Big Name Updates
Nvidia $NVDA ( ▼ 2.26% )
sold off with the broader tech sector. Growth stocks are getting hit as the market prices in a hawkish Fed instead of the cuts everyone expected a month ago.
Microsoft $MSFT ( ▼ 2.39% )
is on pace for its worst quarter since 2008. Wall Street is asking two questions at once: when do AI capex investments actually pay off, and will agent startups eat into core software revenue.
Netflix $NFLX ( ▼ 0.02% )
raised prices on every U.S. tier. Ad-supported is now $8.99, standard $19.99, premium $26.99.
Other Notable Company News
Norwegian Cruise Line $NCLH ( ▼ 7.25% )
announced board changes after reaching a truce with activist Elliott Investment Management.
TripAdvisor $TRIP ( ▲ 2.76% )
won an upgrade from Bank of America as Starboard Value gets more engaged with management.
Lumentum $LITE ( ▲ 1.06% )
is building a new North Carolina plant to make optical devices for AI data centers.
Coinbase $COIN ( ▼ 7.06% )
partnered with a mortgage lender to let homebuyers use crypto holdings as collateral for down payments.
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Sector Watch
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Communication Services | |
Technology | |
Consumer Discretionary | |
Energy | |
Financials | |
Industrials | |
Utilities | |
Materials | |
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Consumer Staples |
Bond Market
The 10-year yield climbed to 4.46, its highest since July. That's up from 3.96 before the war started. The 2-year has gained roughly 50 basis points since late February and has split away from oil prices over the past ten days. That split matters. It means the market is pricing Fed hikes regardless of where crude goes next.
Policy Watch
Government Shutdown
The Senate passed a bill to fund TSA and most of Homeland Security, excluding ICE. It still needs the House. Trump also signed a separate executive order to pay TSA workers. DHS says paychecks should start going out as early as Monday.
Federal Reserve
The message from the Fed this week was unanimous: nobody is cutting anytime soon. Vice Chair Philip Jefferson said he expects inflation to move higher from energy prices and that the current rate is "well-positioned" to respond. Richmond Fed's Thomas Barkin compared the economy to driving in fog: don't gas it, don't brake, pull over and put your hazards on.
Philly Fed's Anna Paulson went further, saying she's uncomfortable being patient when inflation already sits above target. She's a voting member this year, so that carries weight.
Iran War
Trump extended the deadline for strikes on Iran's power plants to April 6, the second extension. He said talks are "going very well" but Iran's foreign minister told state media Tehran has no intention of holding talks. Those two statements don't square.
Israel killed IRGC Navy commander Alireza Tangsiri in Bandar Abbas overnight Wednesday. He was personally overseeing the Hormuz blockade. The IDF said all of the IRGC Navy's top commanders were killed in the same strike.
The Pentagon is looking at sending up to 10,000 additional troops to the region. Marines from the 82nd Airborne are already deployed.
A Defense Intelligence Agency assessment circulating in the Pentagon says Iran could keep the Strait shut for one to six months.
What to Watch
April 6 Iran Deadline
This is the new date for Iran to comply or face strikes on its power plants. It's the second extension. Every day between now and then will bring volatility. I expect markets to stay defensive until something concrete happens.
Jobs and European Inflation Data
U.S. jobs report and eurozone March flash inflation estimates both land next week. Spanish inflation already came in at 3.3, up from 2.5 in February, driven almost entirely by fuel costs. Traders now see a 70 percent chance the ECB hikes rates at its April meeting.
SpaceX IPO
Musk is targeting mid-June and doing it his way. No traditional roadshow. He wants investors to come to SpaceX for facility tours and live launches. This will be the biggest IPO in years.
Bank Earnings Kickoff
First-quarter reports start in mid-April with banks leading off around April 11. Consensus expects about 8 percent year-over-year S&P 500 earnings growth, but I want to hear what executives say about margin pressure from energy costs.
Thanks for reading - you are now the more informed 🙂
- John
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