The Morning Call
5/1/26
The
Market
Technical
Thursday in the charts.
Summary:
So much for that record month-end pension selling: the size and speed of dip-buying has
never been greater. After S&P futures slumped overnight following a report
that Trump may launch a new military campaign on Iran (he didn't, and the
latest Axios report proved to be a bear trap), dropping as low as 7130, stocks
have been a one-way train since the open, rising more than 100 points from the
overnight lows and a panic meltup since the open - the only time we saw
a modest sell order today - with barely and any retracements or red
candles. For those asking, yes - this is what the dot com bubble felt
like on many days (and it will get much crazier).
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
Compliancy is
back.
https://www.zerohedge.com/the-market-ear/complacency-back-right-cue
Mutual funds
forced to chase.
Summary: mutual funds are getting crunched "because
they can’t / don’t own enough of what matters, as ten Tech stocks account for
~75% of the 12% SPX rally since March 30th—and officially killing-off the brief
4Q25/1Q26 “Dispersion” out of MegaCap Tech AI into “Everything Else.” Instead,
it’s now “back to the future”: Mag7+ are once again in total
control of index returns, where due to the return to “extreme concentration
of returns,” these structural underweights in the largest Index market cap
stocks see performance pain further compounded by legacy “Funding Shorts”
(INTC, AMD, QCOM, analog chip makers, power names) also booming higher, and
creating what’s been a nonstop scramble to close the underperformance.
Bitcoin hits resistance.
On the other hand….
https://www.zerohedge.com/the-market-ear/gs-bitcoin-shorts-risk-forced-liquidations
Friday morning
setup: US equity futures are higher, set for a new all-time high, as the rally
that’s pushed Wall Street to record highs on strong megacap tech earnings
continues, after the S&P posted its best monthly increase since November
2020. As of 8:00am ET, S&P futures are up 0.3% (spiking moments ago on a
report that Iran submitted its latest response to US amendments on the
ceasefire agreement), while Nasdaq futures are modestly in the red and the
Russell underperforms. Pre-market, AAPL is up 3% on healthy guidance and
earnings beat even as it warned that memory-chip costs will increase and that
shortages of Mac computers will persist for “several months.” NVDA and MSFT are
40bp higher, while AMZN is down 60bp. Headlines since yesterday’s close have
been largely quiet, especially given the market holidays across most European
and Asian markets. Bond yields dropped 1-2bp, and oil slipped after news that
Iran had delivered its response to the latest US ceasefire amendment via
Pakistani sources; the news pushed Brent down by about $1 to $110 and WTI
dropped to session lows around $103; precious metals and aluminum are lower.
The dollar was little changed having wrapped up its worst month since June,
after a second intervention to by the BOJ/MOF in Japan pushed the yen sharply
higher (although it has again given up most of its gains). Gold traded
around $4,600 an ounce. Today's economic data calendar slate includes
April manufacturing PMI (9:45am) and ISM manufacturing (10am). Fed speaker
slate includes Miran at 8am
Fundamental
Headlines
The
Economy
US
The
February leading economic indicators were up 0.3% versus forecasts of -0.1%; the March leading economic indicators were down 0.6%, predictions
provided.
The
April Chicago PMI came in at 49.2 versus consensus of 53.0.
International
April Japanese YoY
CPI was up 1.5% versus expectations of +1.7%; ex food and energy, it was up
1.5% versus 1.7%; the April final manufacturing PMI was 55.1 versus 54.9.
The April UK final manufacturing PMI was 53.7
versus estimates of 53.6.
Other
Products most impacted by higher oil prices.
March real disposable income per capita.
The war is starting to make its mark on the
US economy.
https://bonddad.blogspot.com/2026/04/stagflationary-real-personal-income.html
Overnight
News
Iran delivered its
latest response to US amendments on the agreement to end the war through
Pakistani mediators.
U.S.-Iran ceasefire that began in early April
has "terminated" hostilities between the two sides for the purposes
of an approaching congressional war powers deadline, a senior official of
President Donald Trump's administration said on Thursday.
The US credit
rating is under pressure from a widening deficit, with debt “far above” other
AA peers, Fitch warned. It expects further fiscal deterioration, driven by tax
cuts.
A growing camp of
hard-liners believe Iran has to take the military initiative and start a
shooting war again to send oil prices soaring higher and increase the pressure
on Trump. They argue that the blockade goes beyond the sanctions Iran has faced
down in the past and amounts to an act of war that must have a military
response.
Monetary
Policy
The minefield that awaits Keven Warsh.
https://www.politico.com/news/2026/04/29/warsh-fed-powell-trump-iran-inflation-00896496
Rising oil prices force EU monetary
authorities to consider excruciating choices.
Fiscal
Policy
Congress
keeps choosing inflation.
https://thedailyeconomy.org/article/congress-keeps-choosing-inflation/
AI
More
cognitive dissonance around AI.
Even more.
And even more.
https://www.warman.life/blog/2026-04-27-the-apprenticeship/
Investing
Portfolio defense
during inflationary growth.
https://www.carsongroup.com/insights/blog/portfolio-defense-during-inflationary-growth/
Alarm bells
ringing in the bond market.
https://www.capitalspectator.com/inflation-alarms-starting-to-ring-in-the-bond-market/
News on Stocks in Our Portfolios
What
I am reading today
Do investors
accept a lower return on collectibles because it makes them feel good?
Eight secrets for a happy
retirement.
https://money.com/secrets-of-the-happiest-retirees/
Excavating a bronze age city.
Inside
Mohenjo Daro, the 5,000-year-old metropolis frozen in time | National
Geographic
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