The Morning Call---the beginning of the end for Open AI?

 

The Morning Call

 

4/28/26

 

The Market

         

    Technical

 

            Monday in the charts.

            https://www.zerohedge.com/markets/calm-storm-markets-go-nowhere-ahead-event-risk-heavy-week

 

Summary: Despite a tsunami of headlines (politics - Trump shooting and redistricting, geopolitics - US-Iran on again off again talks/proposals, macro - inflation upside and growth downside fears from supply chain disruptions, micro - AI 'throttling' and DeepSeek price cuts... to say the least) markets generally did a whole lot of nothing today as they endured the calm before the storm this week. Oil up, Stocks meh, Bond yields up a smidge, Dollar down. Bitcoin hit hard... but most of all - Semis down for the first time this month.

 

            Monday in the technical stats.

            https://www.barchart.com/stocks/momentum

            https://www.barchart.com/stocks/market-performance

            https://www.barchart.com/stocks/sectors/rankings

            https://www.barchart.com/stocks/signals/new-recommendations

 

            Bulls are back.

            https://www.bespokepremium.com/interactive/posts/think-big-blog/bulls-charge-back

 

Tuesday morning setup: US equity futures are lower, dragged by tech, following a report that OpenAI missed revenue and user targets and there growing internal pushback against Sam Altman's notorious aggressive spending (the company has $1.5 trillion in commitment it won't be able to meet), which is hitting semiconductors and the broader supply chain. AS of 8:15am ET, S&P futures are down 0.7% and Nasdaq futures dropped 1.2% as concerns resurfaced over whether the vast amounts of investment in artificial intelligence will pay off. In pre-market trading, Semis and Mag7 are under pressure. Defensives are leading Cyclicals ex-Energy. SoftBank, a key backer of ChatGPT’s owner, plunged 9.9% in Tokyo. US-based OpenAI partners including Oracle and CoreWeave fell in premarket trading. Nvidia was poised to drop 2.9% from a record high. Meanwhile, Brent rose above $111 a barrel, with the Strait of Hormuz still shut. Bond yields are 2-4bps higher as the yield curve flattens and USD appreciates, following the price of oil. Commodities continue to be led by Energy with WTI rising above $100/bbl after Trump signaled he was unlikely to accept Iran’s latest proposal to end the conflict which included a proposed a plan that would reopen the Strait of Hormuz while leaving questions about its nuclear program for later negotiations. There is material weakness in precious metals with silver’s underperformance possibly tied to Tech weakness. Today’s macro data focus is on weekly ADP, home price data, regional Fed activity indicators, and Consumer Confidence (though spending has de-coupled from sentiment). US economic data calendar slate includes weekly ADP employment change (8:15am), February FHFA house price index, S&P CS home prices (9am), April Richmond Fed manufacturing index and Conference Board consumer confidence (10am) and Dallas Fed services activity (10:30am)

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

The April Dallas Fed manufacturing index was -2.3 versus forecasts of -0.8.---but not as bad as it looks.

                         https://www.advisorperspectives.com/dshort/updates/2026/04/27/dallas-fed-manufacturing-business-conditions-mixed-perceptions-april-2026

 

                        International

 

The March Japanese unemployment rate was 2.7% versus predictions of 2.6%.

 

                        Other

 

                          Some perspective on recent economic data.

                          https://www.advisorperspectives.com/commentaries/2026/04/27/where-random-walk-data-lead

 

                          Q1 GDP set to rebound but Gulf War clouds outlook.

                          https://www.capitalspectator.com/q1-gdp-set-to-rebound-but-gulf-war-stalemate-clouds-outlook/

 

            Iran

 

              Overnight news.

              https://www.zerohedge.com/geopolitical/iran-offers-new-proposal-reopen-strait-trump-open-sealing-deal-phone

 

              Is the war now a ‘phoney war’?

  https://www.bloomberg.com/opinion/articles/2026-04-27/iran-war-s-new-normal-is-becoming-a-phoney-sitzkrieg?utm_source=website&utm_medium=share&utm_campaign=copy

 

 

            Monetary Policy

 

              Money supply and credit availability continue positive.

              https://bonddad.blogspot.com/2026/04/updating-long-leading-indicators-money.html

 

           

            Fiscal Policy

 

              A solution for the social security shortfall.

              https://thehill.com/opinion/finance/5845641-fix-social-security-now/

 

A great solution to the budget deficit problem. Six percent may not be the right number but the principle is spot on.

              (3) Rand Paul’s “Six Penny Plan” to Balance the Federal Budget in Five Years

 

            Tariffs

 

              Trade deficits didn’t drain US wealth; they made more of it.

  https://www.washingtonpost.com/opinions/2026/04/27/trade-deficits-are-making-us-wealthier/?pwapi_token=eyJ0eXAiOiJKV1QiLCJhbGciOiJIUzI1NiJ9.eyJyZWFzb24iOiJnaWZ0IiwibmJmIjoxNzc3MjYyNDAwLCJpc3MiOiJzdWJzY3JpcHRpb25zIiwiZXhwIjoxNzc4NjQ0Nzk5LCJpYXQiOjE3NzcyNjI0MDAsImp0aSI6IjFlMjMxYzMwLTllZTEtNGVkZC1hZjQzLTgwZDY5N2UzYTA2ZiIsInVybCI6Imh0dHBzOi8vd3d3Lndhc2hpbmd0b25wb3N0LmNvbS9vcGluaW9ucy8yMDI2LzA0LzI3L3RyYWRlLWRlZmljaXRzLWFyZS1tYWtpbmctdXMtd2VhbHRoaWVyLyJ9.znFd5VNea_HK3jZfxCrPpkLFfvCSN4xIQN5iZ3HNo_0

 

                        The Financial System

 

              Private credit funds are working precisely as they were designed to do.

              https://www.realclearmarkets.com/articles/2026/04/27/private_credit_funds_are_working_precisely_as_designed_to_1178670.html

 

     Investing

 

            The beginning of the end for Open AI?

            https://www.zerohedge.com/markets/openai-misses-revenue-user-targets-cfo-fears-15-trillion-commitments-cant-be-paid

 

Why the market is shrugging off the oil shock---a less negative view of the future impact of oil price/supply.

            https://www.advisorperspectives.com/commentaries/2026/04/27/hormuz-why-markets-shrugging-oil-shock

 

            Another less negative view.

https://www.bloomberg.com/opinion/articles/2026-04-27/us-stocks-will-keep-ignoring-the-iran-war?utm_source=website&utm_medium=share&utm_campaign=copy

 

 

            The growing exposure to concentration risk.

            https://www.carsongroup.com/insights/blog/101460/

 

            Enjoy this bull market while it lasts.

            https://awealthofcommonsense.com/2026/04/an-all-time-bull-market/

 

            Semis dislocated from ISM survey.

            https://www.zerohedge.com/markets/semis-have-completely-dislocated-ism-readings-gap-always-closes-one-way-or-another

 

Summary: Investors are chasing the theme, regardless of how the stretched-looking rally has pushed the SOX Index into bubble-like territory. Not only has the index scaled the most overbought levels in over five years, it has also completely dislocated from the ISM Manufacturing reading, a gap that historically tends to close, one way or another.

 

            How to build a portfolio.

            https://www.morningstar.com/personal-finance/how-build-portfolio-what-own-what-skip-why

 

    News on Stocks in Our Portfolios

 

 

 

What I am reading today

 

           

 

 

Visit Investing for Survival’s website (http://investingforsurvival.com/home) to learn more about our Investment Strategy, Prices Disciplines and Subscriber Service.

 

 

 

Monday Morning Chartology

 

The Morning Call

 

4/27/26

 

The Market

         

    Technical

 

There is just no quit in this Market. After treading water for a week or so, the S&P lunged ahead on Friday---as usual on the back of ‘peace talk’ news. Let’s hope the all goes well; but given the recent trend in events, there is room for doubt. That said, investors could apparently care less. The technicals are all ‘full steam ahead’ with the S&P (1) making a new all-time high, (2) above all three DMAs and (3) in uptrends across all timeframes. The technical question in my mind is how long can this sprint higher last without a correction?---coupled with the more fundamental question of the economic impact (growth and inflation) of the war (destruction of the Middle East oil infrastructure) which is as yet unanswered.

 

As you know, I approached this upside move cautiously---which couldn’t have been more wrong. Nonetheless, I am loath to chase this upswing, especially with (now) three gap up opens sitting below. The only good news in this trading error is that a number of stocks on my Buy List have remained within buying parameters. So with any retreat, I can make a delayed entry.

 

Hedge funds brace for a reversal.

https://www.zerohedge.com/markets/hedge-funds-brace-reversal-dump-tech-stocks-fastest-pace-2-years

 

Summary: While both the S&P and Nasdaq rose last week, it was anything but a full-throttled affair. The lack of color on Iran negotiations - which have once again collapsed... but only after the market closed of course - kept risk appetite at bay. As a result, Friday's record close happened with the second worst breadth for an all-time high on record: 324 stocks closed lower for a -148 net breadth reading (only October 2025 was worse, with 80% of the S&P down on a record day). Under the surface, fears that the market had topped out were evident everywhere: according to Goldman's share sales trading desk, flows were reflective of asset managers re-risking in pockets of tech, while Hedge Fund flows were quite bearish.

 

 

 

 

TLT was down slightly on the week but remains above the lower boundary of its very short term trading range. However, it remains below all DMAs and in downtrends across all major timeframes. With stagflation the likely result of the destruction wrought on the oil infrastructure, I am hard pressed to think that bond prices are going to improve markedly.

 

           

 

 

 

 

 

Gold failed at its 50 DMA, is now challenging its 100 DMA and is still in a very short term downtrend marked by the top and now two lower highs. The good news is that (1) it remains in uptrends across all time frames and (2) still has one gap down open overhead that needs to be filled. I will likely rebuild my GDX position when it breaks through that very short term downtrend.

 

 

 

 

 

The dollar moved back to the upside last week, challenging its DMAs---all of which are now resistance. In addition, it has a large gap down open overhead that needs to be filled. So while I can see the dollar maintaining some short term upward momentum, I continue to believe that the macroeconomic backdrop of the US economy (slow growth and rising inflation) suggests a low to lower dollar.

 

 

 

 

            Friday in the charts.

            https://www.zerohedge.com/markets/stocks-close-all-time-high-iran-optimism-semis-ludicrous-18-days-row

 

Summary: Markets closed at all-time highs off the back of a fresh round of hopes the US and Iran will be back to the negotiating table - driven by the latest barrage of "promising" headlines from the US, offset by downbeat replies by Iran (see below), although the market clearly focused on the former and not the latter... Still, the most notable move today is the continue meltup in semiconductors which are now up a record 18 days, and the most overbought they have ever been. The drop in oil also helped Treasury yields fall, especially after the DOJ announced it would close its criminal probe on Powell potentially cleared a path to Kevin Warsh’s confirmation as the next Fed leader, with traders boosting bets on interest-rate cuts. Yet the most remarkable chart of the day is the same one we have shown on several occasions, namely the staggering disconnect between stocks on one hand, and oil and yields on the other. It now appears that the S&P is about 600 points rich to where other assets suggest it should be.

 

 

                Friday in the technical stats.

            https://www.barchart.com/stocks/momentum

            https://www.barchart.com/stocks/market-performance

            https://www.barchart.com/stocks/sectors/rankings

            https://www.barchart.com/stocks/signals/new-recommendations

 

Monday morning setup: Risk sentiment improved overnight on another Axios report that Iran has given the US a new proposal to reopen the Strait of Hormuz with more detailed nuclear talks expected later. Oil pares early gains, and US equity futures jumped although they have also pared gains since and are trading flat as traders await a huge week of earnings (44% of the S&P by mkt cap is set to report) and central bank decisions (Fed, BOJ, ECB, BOE and BOC all expected to keep rates on hold). As of 8:00am ET, S&P 500 futures are flat and Nasdaq 100 contracts gain 0.2% after Friday's records for both indexes even though leadership is narrow, and the S&P equal weight index closed negative on the week; premarket gains by chip stocks like Nvidia, Qualcomm, Intel and Micron suggest the semiconductor ETF (SOX) is set for a record 19th day of gains. Mag7s are mixed, semis are bid, discretionary outperforms staples, cyclicals over defensives, and AI theme is bid across multiple sectors. Looming Big Tech results (22% of S&P 500 market cap across just four companies reports after the close on Wednesday, when Alphabet, Microsoft, Amazon, and Meta release their Q1 results with Apple following on Thursday) will test whether April’s rally is sustainable, with signs of caution under the surface of the gains. Bond yields are +1-2bps as the yield curve steepens; DXY is lower. Commodities are bid led by the Energy complex, with most products up at least 2%. Brent crude rose 1.1% to about $106.50 a barrel after Trump canceled a trip by top envoys to mediators in Pakistan over the weekend. Base metals are leading Precious with Ags continuing its march higher. Today’s macro data calendar is light ahead of a heavy central bank schedule where major CBs are expected to hold ahead of the market pricing changes in June. Warsh is set to be confirmed without further delays while Powell’s status remains unclear. 

 

 

 

    Fundamental

 

       Headlines

 

              The Economy

 

The US stats tilted to the positive side last week with one positive primary indicator. Overseas, the data was very disappointing which included two neutral and two negative inflation readings.

 

We still aren’t seeing any economic effects of the Iran war and the turmoil in the private credit market in the US numbers though perhaps last week’s global data was the first sign. But one week’s stats is not a trend; so, it is way too early to make that judgment. That said, some of the leading energy experts are raising major concerns about the economic growth and inflationary impacts of a constrained oil supply on the global economy. Their prognosis is not good for either even if the war were to end today.

 

On the other hand, there is a lot of weapons restocking that needs to be done.

https://www.zerohedge.com/military/race-refill-us-weapons-stockpiles-will-supercharge-war-economy

 

The private credit problem just keeps getting worse. However, several new studies pointed out that (1) while magnitude of the ultimate damage is still an unknown, we do know that private credit has produced no ancillary derivatives securities/markets and (2) during the great financial crisis, derivatives risk was sixfold greater than that of the underlying securities. So whatever the risk today, it is considerably less than it was during that episode. Which eases my concern with regard to the viability of our financial system.

 

While this all leaves me with heightened concern about both growth and inflation/stagflation, the stock market is anything but worried. I am not sure if  (1) this is a buy-the rumor-sell-the-news situation, (2) investors correctly believe that earnings growth will continue at its current pace irrespective of the damage being done by the destruction of the Middle East oil infrastructure and I am wrong to be worried or (3) investors incorrectly believe earnings growth will continue at its current pace irrespective of the damage being done by the destruction of the Middle East oil infrastructure I am right to be worried.

 

Color me clueless. But until the magnitude of the war’s economic impact on the US economy becomes clearer, my choice is to stay on the sidelines even if I am proven wrong to be worried.

 

              More talks, but nothing has changed.

              https://www.zerohedge.com/markets/goldman-delta-one-desk-more-iran-talks-nothing-has-changed-and-equities-just-dont-care

 

Summary: Putting it all together, Goldman's Delta One head warns that markets are high and so is energy, and more importantly, this isn’t a clean shock you can reverse quickly. Logistics matter - tankers out of position, refining constraints, and tight product markets mean the impact lingers even if headlines improve. It is interesting to see survey data like the Gallup economic confidence index is extremely weak, which is a notable divergence between markets and households. Trading wise, it still feels like the next headline dominates (just look at stocks today). Early this morning, Privorotsky predicted correctly that "if you had to guess, the most likely near-term catalyst is “talks back on” over the weekend…which probably means higher first and then reassess." But zooming out, Privo warns that there’s less technical impulse to buy here, and the asymmetry is starting to tilt the other way...so I have been and remain cautious at these levels. 

 

 

                        US

 

The April consumer sentiment index came in at 49.8 versus estimates of 47.6.

https://econbrowser.com/archives/2026/04/updated-april-michigan-survey-results

 

                        International

 

The February Japanese leading economic indicators were reported at 116.3, in line.

 

The May German consumer confidence index was -33.3 versus projections of -29.5.

                       

                        Other

 

                          Interest rates and the long term leading indicators.

                          https://bonddad.blogspot.com/2026/04/updating-long-leading-indicators_24.html

 

            Iran

 

              Overnight news.

              https://www.zerohedge.com/geopolitical/iran-offers-new-proposal-reopen-strait-trump-open-sealing-deal-phone

 

            Monetary Policy

 

              What to watch as Warsh assumes the Fed chair.

               https://www.carsongroup.com/insights/blog/kevin-warsh-as-the-next-fed-chair/

 

            Fiscal Policy

 

              Washington’s self-inflicted farm crisis

               https://www.cato.org/blog/washingtons-self-inflicted-farm-crisis

 

              America’s debt problem is a healthcare problem.

              https://reason.com/2026/04/23/americas-debt-problem-is-a-health-care-problem/

 

     Investing

 

    News on Stocks in Our Portfolios

 

 

 

What I am reading today

 

           

                        Notes for self-education.

            https://jillianhess.substack.com/p/richard-feynmans-notes-for-self-education?ref=thebrowser.com

 

Visit Investing for Survival’s website (http://investingforsurvival.com/home) to learn more about our Investment Strategy, Prices Disciplines and Subscriber Service.

 

 

 

The Morning Call---the revolt against the dollar order

 

The Morning Call

 

4/24/26

 

The Market

         

    Technical

 

            Thursday in the charts.

            https://www.zerohedge.com/markets/stocks-slide-oil-surges-iran-war-fears-semi-honey-badger-higher-17th-straight-day

 

Summary: The market rollercoaster of the past 5 days continued on Thursday, with stocks once again trying - and failing - to break out above last Friday's all time high, in what has now become a 100 point ping-pong game as stocks selloff just below 7200 only to get dip buyers jump in about 100 points lower. And while stocks had largely started to ignore the news flow from Iran in recent days, today a barrage of Iran-related headlines between 1pm and 2pm was all that mattered, sending S&P futures tumbling as much as 100 points lower before recovering almost all losses as it turned out that the near-war - according to X - was fake news. And while it may appears that the market's face ripping rally will never end, world war 3 or not, we may see some weakness in the near future as Goldman models month-end pension rebalancing at $25 billion of US equities to sell - the largest non-quarterly sell estimate on record. For context, November & April 2020 was $20 billion for sale. As for CTAs which were instrumental in pushing stocks this high, demand is dwindling with Goldman models projecting $680 million to buy in the US in a flat tape (after net buying $30.2bn over the last week and $42.8bn over the last month).

 

Thursday in the technical stats.

https://www.barchart.com/stocks/momentum

https://www.barchart.com/stocks/market-performance

https://www.barchart.com/stocks/sectors/rankings

https://www.barchart.com/stocks/signals/new-recommendations

 

            Crypto in the charts.

            https://talkmarkets.com/article/crypto-sentiment-hits-a-3-month-high-as-bitcoin-holds-77000-1776959196

 

            Gold is going nowhere.

            https://www.zerohedge.com/the-market-ear/gold-going-nowhere-thats-still-trade

 

Friday morning setup: US equity futures jumped to a new all-time high, reversing modest overnight losses, and oil tumbled to session lows on reports that Iran is sending a delegation to Pakistan today for talks, boosting hopes of ceasefire extension or more. Iranian Foreign Minister Araqchi is expected to arrive in Islamabad at 22:00 local time (1:00pm ET), the NY Post reports. As of 8:00am ET, S&P futures rallied as much a 0.6% to a new all-time high of 7,190, reversing a modest loss in overnight trading as Brent tumbled from $107 to around $104 on the report. Tech shares rallied on the back of strong results from Intel and SAP SE, with the Nasdaq 100 up 1.3% and on track for a fourth straight weekly gain with most Mag 7 stocks trading higher. INTC added +29% amid surprises in both earnings and sales across all major businesses; the move will almost certainly extend the gains for semiconductor stocks to 18 straight days. The dollar slid 0.2%. Brent erased gains to fall 1.2% to below $104 a barrel while WTI dropped $1.2 and is now at $94.68 after trading as high as $98 earlier. Treasuries advanced, with the 10-year yield down two basis points at 4.31%. Metals are mixed, gold rebound above $4700; ags are higher. Today's macro data include the final UMich consumer sentiment survey. 

 

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

The April flash manufacturing PMI was reported at 54.0 versus forecasts of 52.5; the flash services PMI was 54.3 versus 50.0; the flash composite PMI was 52 versus 49.9.

 

The Kansas City Fed manufacturing index was 10 versus projections of 11.

                          https://www.advisorperspectives.com/dshort/updates/2026/04/23/kansas-city-fed-manufacturing-index-activity-grew-further-in-april

 

                        International

 

                          March Japanese CPI rose 0.4%, in line.

 

March UK retail sales were up 0.7% versus consensus of +0.2%; ex fuel, they were up 0.2%, in line; the April consumer confidence index was -25 versus consensus of -24.

 

The April German business climate index was 84.4 versus expectations of 85.5; the April current conditions index was 85.4 versus 86.0.

 

                        Other

 

                          The most positive US datapoint.

                          https://bonddad.blogspot.com/2026/04/jobless-claims-still-most-positive.html

 

                          The IMF’s global economic outlook.

                          https://www.advisorperspectives.com/commentaries/2026/04/23/outlook-from-for-imf

 

                          Something is off with the oil math.

                          https://www.zerohedge.com/markets/jpmorgan-finds-something-global-oil-math

 

Summary:  Kaneva finds that "something is off" with the oil supply/demand math, and her conclusion is that "in practical terms", oil price have to go up much more, even as product supply shrinks due to far more demand destruction, before we reach a tentative equilibrium, one which will result in far more pain for consumers (and yes, stocks). 

 

            Iran

 

              Overnight news.

              https://www.zerohedge.com/geopolitical/flurry-reports-signal-breakthrough-us-iran-getting-back-table-pakistan-third-us

 

            Monetary Policy

 

              Where to start on regime change.

  https://www.bloomberg.com/opinion/articles/2026-04-23/warsh-fed-regime-change-here-s-where-to-start?accessToken=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJzb3VyY2UiOiJTdWJzY3JpYmVyR2lmdGVkQXJ0aWNsZSIsImlhdCI6MTc3Njk2NTc2NSwiZXhwIjoxNzc3NTcwNTY1LCJhcnRpY2xlSWQiOiJURFhaVUxLSVAzTkMwMCIsImJjb25uZWN0SWQiOiJCMzFCNTRDQTI3MTE0NjAxOUQxMURCN0IxRUM4NTE2MyJ9.J4ORaOaZyvltLszr8TJpijFcUjdv-Qo9b1_46porw6A

 

 

            Fiscal Policy

 

I hesitated to post this because it contains a lot of political rhetoric---which I try to avoid in these pages. However, the recounting of the facts (assuming that they are not political bulls**t) about insider trading points out a concern that we all should have.

https://mishtalk.com/economics/insider-trading-by-the-trump-administration-or-its-hot-connections/

 

              39 going to 40 trillion.

              https://www.zerohedge.com/economics/39-going-40-trillion

 

            Inflation

 

              Fertilizer prices in context.

              https://econbrowser.com/archives/2026/04/fertilizer-prices-in-context

 

              Update on inflation expectations.

              https://econbrowser.com/archives/2026/04/five-year-inflation-expectations-april-22

 

            The Financial System

 

              How private credit funds disappear troubled loans.

              https://roddubitsky.substack.com/p/the-vanishing-how-bdcs-disappear

 

            The Dollar

 

              The revolt against the dollar order.

              https://www.zerohedge.com/geopolitical/gaza-brics-revolt-against-dollar-order

 

     Investing

 

            Stocks are up because earnings are up.

            https://www.carsongroup.com/insights/blog/theres-no-puzzle-as-to-why-stocks-are-at-all-time-highs/

 

            The cheapest Mag 7 stock.

            https://talkmarkets.com/article/cheapest-magnificent-7-stock-revealed-ahead-of-big-tech-earnings-1776958775

 

            Why the gold price is under pressure.

            (3) Precious Metals Work - by Quoth the Raven

 

    News on Stocks in Our Portfolios

 

 

 

What I am reading today

 

            Why are we so sad?

            https://www.derekthompson.org/p/if-americas-so-rich-howd-it-get-so

 

                        Why thinking hard feels bad.

            https://www.psypost.org/why-thinking-hard-feels-bad-the-emotional-root-of-deliberation/

 

Visit Investing for Survival’s website (http://investingforsurvival.com/home) to learn more about our Investment Strategy, Prices Disciplines and Subscriber Service.