May 8th Pre-Market

Good Morning

Futures are green, oil is sitting at $100, and Trump called overnight missile fire in the Strait a "love tap." Jobs came in way better than expected this morning, 115K added vs 55K, and unemployment held steady.

The bad news everyone was bracing for didn't show up. I think we coast into the weekend, just keep an eye on the Iran headlines.

Let's dig in...

Today's Big Picture

1. The Hormuz Disconnect 

Iran hit US warships with missiles, drones, and small boats overnight. The UAE caught separate strikes. Three weeks into the US blockade, Iran is now running cargo trains through China every three or four days. That's a new trade route, not a workaround.

The war is already inside earnings, just not where people are looking. Toyota took a $4.27 billion hit to annual operating profit this morning. British Airways' parent flagged a $2.35 billion fuel bill. UN food prices just hit a three-year high. Wall Street's new acronym says it best, NACHO, "Not A Chance Hormuz Opens."

2. Labor Market Holds, Fed Stays Parked

Payrolls printed 115K against a 55K consensus. Unemployment held at 4.3%. Wages cooled to 0.2%, the only soft line. The bears wanted the first real labor crack since the war started and didn't get one. Zero cuts were already priced for the year, so the print confirms the curve.

3. The AI Trade Is Rotating Underneath 

Akamai up 27% on a $1.8 billion frontier-model cloud deal. DataDog ripped 31% yesterday on 32% revenue growth. Cloudflare getting hit on 1,100 AI-driven layoffs. The Mag 7 added $3 trillion in market cap during the war, but Alphabet's forward price-to-free-cash-flow just crossed 200x. Money keeps leaving "owns AI" and moving into "what AI runs on."

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Stock Spotlight (pre-market)

Cloudflare $NET ( ▼ 3.48% )  

Getting crushed after announcing 1,100 layoffs and a soft Q2 guide. The CEO framed it as AI restructuring, which puts every software CFO on the hook to give the same answer next earnings.

Akamai $AKAM ( ▼ 2.26% )  

Sharply green after landing a $1.8 billion seven year deal with an unnamed frontier AI lab. The pivot from legacy CDN to AI inference cloud just got real revenue behind it. Forces analysts to rewrite the TAM and forces edge competitors to show their AI angle.

Trade Desk $TTD ( ▼ 1.77% )  

Getting hit hard on a Q2 guide miss. Open programmatic keeps losing share to walled gardens and AI native ad platforms. Magnite and PubMatic get punished by association, agencies start rethinking buy strategy.

Coinbase $COIN ( ▼ 4.14% )  

Down after a $394 million Q1 loss, the second straight quarterly loss with revenue down 31 percent. The pure exchange model is bending under spot weakness, and management has to sell the diversification story on the call. Robinhood is the comp to watch since it has the revenue mix Coinbase wishes it had.

CoreWeave $CRWV ( ▼ 6.06% )  

Down on a wider loss and a raised low end on capex from higher component costs. The AI buildout is getting more expensive than the bulls modeled, which forces every pure play AI infra holder to revisit unit economics. Hyperscaler capex commentary on the next round of calls is the tell.

IREN $IREN ( ▲ 2.56% )  

Ripping premarket after Nvidia took a five year right to buy up to 30 million shares at $70, an investment worth up to $2.1 billion. They also signed a separate $3.4 billion five year deal for IREN to provide Nvidia with managed GPU cloud services. Forces every other neocloud to prove they're not getting left behind, and gives any Bitcoin miner with a power contract a reason to shop the AI pivot.

What to Watch

The Shipping Insurance Tell 

War premiums to insure a tanker through Hormuz are running eight times pre-war levels. The rates curve keeps flattening as bond traders price in a longer war. Equities are at record highs.

Boeing And The Trump-Xi Summit (May 14-15) 

Boeing's CEO is going on the trip and the first major China aircraft order in almost a decade is expected to land. Watch Boeing into next week. Confirmed and the stock catches a real bid above the noise.

Iran's Response To The Peace Proposal 

Rubio told reporters this morning the US "should know something today." A senior Iranian official said the country won't accept an "unrealistic plan" and wants reparations. Headline risk runs both ways into the close.

- John

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