May 1st Market Overview

Happy Friday

May kicks off with the S&P and Nasdaq printing fresh record highs. Apple beat and pulled tech higher, the bigger is the UAE officially walked out of OPEC today.

Third-largest exporter, gone.

Three Fed dissenters this week…. Hammack, Kashkari, and Logan all said the next move could just as easily be a hike. With ISM prices at a four-year high today, I think they have a point. Market hasn't done a good job of pricing this in yet.

Hope you have a great weekend.

Let’s dig in...

Today's Big Picture

Apple Earnings Push Tech to New Highs

Apple $AAPL beat on revenue and earnings, with current-quarter guidance topping estimates. iPhone sales missed for the second time in three quarters, but nobody cared. The stock climbed and pulled the Nasdaq to a new record close. Apple also retired its net-cash-neutral target, which has Wall Street whispering about a major AI acquisition.

UAE Walks Out of OPEC, Effective Today

The UAE officially exits OPEC and OPEC+ today after announcing the move Monday. They were the third-largest exporter in the cartel and one of the lowest-cost producers globally. Quotas were keeping them from monetizing their 4 million bpd capacity, with a 5 million target by 2027. Once Hormuz reopens, watch for a real Gulf price war between Abu Dhabi and Riyadh. This is the structural oil story of the year.

Three Fed Dissenters Just Killed the Easing Bias

Hammack, Kashkari, and Logan all objected to the Fed's recent policy language. They want the next move framed as either a hike or a cut, not an assumed cut. ISM manufacturing prices hit a four-year high today, so they have a real point. I think the market is pricing this wrong heading into Kevin Warsh's arrival as chair.

Market Overview

Index Performance

Stock Spotlight

Spirit Aviation Holdings $FLYYQ ( ▼ 21.07% )  
collapsed over-the-counter to pennies on the dollar. The Wall Street Journal reported the budget carrier is preparing to liquidate its fleet and shut down. The $500 million government rescue fell apart after bondholders refused to sign on.

Roblox $RBLX ( ▼ 18.35% )  
got cut down hard after slashing full-year bookings guidance. CEO blamed new age verification rules. About a third of US users can't fully use chat features yet. Management is calling it short-term friction.

Reddit $RDDT ( ▲ 15.52% )  
climbed on strong user growth and double-digit ad revenue gains. Daily active users hit 126.8 million, narrowly beating estimates.

Big Name Updates

Exxon Mobil $XOM ( ▼ 0.63% )  
beat adjusted earnings at $1.16 vs $0.98 expected. Headline net income fell hard on hedging-related paper losses tied to the Iran war, but those reverse when the trades settle. Cash from operations came in at $13.8 billion, well above the trailing twelve-quarter average.

Chevron $CVX ( ▼ 1.39% )  
cleared profit estimates but missed on revenue. Same hedging story as Exxon. US oil and gas production climbed close to a quarter higher after integrating Hess.

Occidental Petroleum $OXY ( ▼ 2.87% )  
announced CEO Vicki Hollub retires June 1 after ten years running the company. COO Richard Jackson takes over. Shares fell on the news.

Moderna $MRNA ( ▼ 1.24% )  
tripled revenue from a year ago to $389 million. International COVID vaccine sales did the work, with $311 million coming from outside the US. Late-stage melanoma vaccine results expected later this year.

Sandisk $SNDK ( ▲ 4.83% )  
beat across the board with $5.95 billion in revenue and $23.41 adjusted EPS vs $14.51 expected. Stock still fell. Classic sell-the-news after a massive year-to-date run.

Other Notable Company News

Berkshire Hathaway $BRK.B ( ▲ 0.21% )  
holds its first annual meeting tomorrow without Buffett as the central figure. Greg Abel runs the show.

Stellantis $STLA ( ▼ 1.72% )  
fell after Trump said EU auto tariffs go to 25 from 15 next week. Cars built in US plants stay exempt.

Blue Owl Capital $OWL ( ▲ 1.8% )  
L drew a buy reiteration from Bank of America after the SpaceX investment paid off close to ten times.

Clorox $CLX ( ▼ 9.67% )  
dropped after cutting full-year guidance. The Purell acquisition is running hotter on costs than expected.

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Sector Watch

Bond Market

The 10-year is holding near its post-cease-fire highs at 4.39. Yields kept creeping up this week as Strait of Hormuz disruptions kept inflation expectations sticky. Dollar index closed at 95.09. Watch next week's Treasury auctions for any sign of weaker foreign demand.

Policy Watch

Fed

Three regional presidents (Hammack, Kashkari, Logan) dissented from this week's policy statement. They didn't want language hinting at another cut. Kashkari specifically called out the closed Strait of Hormuz as the reason. Warsh inherits a hawkish committee.

Fiscal & Trade

• Trump raising EU car and truck tariffs to 25 from 15 next week, citing non-compliance with the existing trade deal

• Vehicles built in US plants stay exempt

• The Section 232 framework wasn't affected by the recent Supreme Court decision on emergency tariffs

Earnings Season Pulse

• Most S&P 500 companies have beaten EPS estimates so far this season

• EPS growth running well into double digits year-over-year, beating analyst expectations meaningfully

• Nine of eleven sectors printing double-digit growth

What to Watch

10 AI Stocks to Lead the Next Decade

MarketBeat did an excellent job on this AI infrastructure leaders report

CoreWeave and AMD Earnings (Next Week)

Both are key OpenAI ecosystem names. Citi just raised CoreWeave's target to $155 from $126 ahead of the print. After this week's Magnificent Seven prints, the AI capex narrative either holds or starts cracking.

Iran Diplomatic Track

Trump rejected the latest draft proposal Friday afternoon, walking back the morning's de-escalation read. Pakistani mediators continue shuttle diplomacy. Hormuz reopening would crater oil and rip yields lower fast. Stalemate keeps the inflation pressure on.

S&P 500 Index Rule Changes

S&P Global is taking public comment on shortening the listing requirement to six months and waiving profitability rules. Catalyst is potential SpaceX, OpenAI, and Anthropic IPOs. Comment period runs through this month.

Thanks for reading - you are now the more informed 🙂

- John

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