Today's Big Picture
1. Iran Threatened To Attack 18 U.S. Tech Companies Today
The IRGC named Nvidia, Apple, Microsoft, Tesla, Boeing, and 13 others as "legitimate targets" starting 12:30 PM ET. This isn't hypothetical posturing. Iranian strikes already hit Amazon Web Services data centers in the UAE earlier this month and caused real outages.
2. Stocks Are Pricing In Peace. Oil Is Not.
Stocks are rallying everywhere on Trump's "two to three weeks" exit timeline. But Brent settled at $118 during yesterday's rally and the Strait of Hormuz is still closed. The war has already taken 12 million barrels per day off the market, more than the 1973 and 1979 oil crises combined. The IEA (International Energy Agency) says April's losses could be double what March saw. Until that strait reopens, the energy problem isn't going anywhere.
3. Consumer Is Spending
Two big economic reports dropped this morning and both came in stronger than expected. Retail sales showed people are still spending. Private hiring beat forecasts by a wide margin. That sounds like good news, but here's the problem: if the economy looks this healthy, the Fed has no reason to lower interest rates. Before the war, Wall Street expected two rate cuts this year. Now they expect zero. Borrowing costs are going up, not down. Mortgage rates just hit 6.57, the highest in seven months.
I find it hard to believe that people are still spending and private hiring beat forecasts. I think his BLS sycophant are fudging the numbers. Things are not as rosy as we are being led to believe... Opinions?