May 5th Pre-Market

Good Morning

Quiet morning so far which is nice after yesterday's slip. Hegseth came out and said the Strait of Hormuz is fine and oil is fading on it. AMD reports after the bell, that's the big one.

Nobody's chatting about the 30-year yield at 5.03 again. That number gives me pause every time it shows up. When safe bonds pay that much, money tends to leave stocks.

Let's dig in...

Today's Big Picture

Hegseth just talked oil down 

Iran fired drones and missiles at the UAE overnight after the U.S. forced commercial ships through the Strait of Hormuz. Hegseth came out this morning and said the lane is clear. Oil is fading on his words, not on anything actually being resolved just yet.

Earnings have been generally solid

Pinterest, Intel, Pfizer, and Anheuser-Busch InBev all beat and are higher premarket. AMD reports after the close today and sets the AI tape for the rest of the week. Full-year S&P earnings forecasts have been revised sharply higher in the past month. Strip out the earnings bid and there isn’t much absorbing the rate and oil shock.

The bond market is pricing what stocks are ignoring 

Two warning signs flashed yesterday and the equity market shrugged at both. The 30-year Treasury yield closed at 5.03, the highest since July and a level that has triggered selloffs four times in three years. Dow Transports erased their entire April breakout and are flirting with a bear market. Bonds and transports are both telling you growth is slowing.

Market Overview

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Stock Spotlight (pre-market)

Advanced Micro Devices $AMD ( ▼ 5.27% )  
reports after the close. Data center revenue is the only line that matters. The number tells you whether the $800 billion in 2026 hyperscaler capex everyone is modeling actually shows up. Nvidia trades the sympathy tomorrow either way.

Intel $INTC ( ▼ 3.86% )  
higher premarket on a Bloomberg report that Apple held early talks to use Intel foundries for U.S.-made device chips. Intel was priced for foundry irrelevance. Even exploratory talks force shorts to cover. Watch TSMC and the Samsung ADRs trade on the same headline.

Pinterest $PINS ( ▲ 3.12% )  
higher premarket after Q2 guidance came in above consensus. Digital ad spend is still expanding through the macro stress. That's a green light for Snap and Reddit too.

Palantir $PLTR ( ▲ 1.36% )  
lower premarket despite record revenue and profit. The problem is the stock was priced for perfection at 98 times forward earnings, and Benchmark says anything below 70 percent growth gets it re-rated. MongoDB, Snowflake, and Datadog are all trading the same thesis today.

Coinbase $COIN ( ▲ 6.14% )  
cutting one in seven employees, citing AI and crypto volatility. Earnings hit Thursday. Layoffs this close to a print is management bracing for a soft number. The premarket pop fades by the open once traders connect the dots, and Robinhood follows.

GameStop $GME ( ▼ 10.14% )  
falling after Michael Burry dumped his entire stake. He cited leverage above 5x debt-to-EBITDA on the eBay deal. On CNBC, Cohen could not explain how a $12 billion company finances a $55 billion acquisition. When one of the sharpest contrarians in the market walks, the meme thesis is over.

What to Watch

JOLTS Job Openings (10 AM ET) 

A strong number means more hiring than expected, which puts a Fed rate hike back on the table this year. A weak number doesn't bail bonds out either, because high oil is keeping inflation hot regardless. Either way, bonds lose. That's the trade.

Fed's Michelle Bowman Speaks 

She has been the hawkish voice on the board. Any acknowledgement of stickier inflation flows straight to the long end and pushes the 30-year through 5.10. That is the level that snaps the broader equity bid.

HSBC's $400 Million Private Credit Hit 

Truist's Lerner has been flagging private credit as the quiet tail risk. HSBC just took a $400 million provision on alleged fraud at a collapsed UK mortgage lender and admitted it relied on private equity due diligence. This is the first real canary, not the last.

- John

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