Stocks Surging into Final Hour on Mideast War Resolution Hopes, Earnings Outlook Optimism, Falling Long-Term Rates, Tech/Transport Sector Strength

Economic/Market Gauges:

• North American Investment Grade CDS Index 52.6 -2.5%
• BofA Private Credit Proxy Index 77.1 -1.5% 
• Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .24 -1.0 basis point
• BofA Global Financial Stress Indicator -.03 -4.0 basis points
• European Financial Sector CDS Index 58.7 -3.8%
• Emerging Market CDS Index 154.8 -3.7%
• Israel Sovereign CDS 63.4 -4.6% 
• Bloomberg Global Trade Policy Uncertainty Index .9 unch.
• US Morning Consult Daily Consume Sentiment Index 87.4 +.1

• Citi US Economic Surprise Index 33.0 -.9

• Citi Eurozone Economic Surprise Index -62.8 +1.1

• Citi Emerging Markets Economic Surprise Index 50.4 +.4
• S&P 500 Current Quarter EPS Growth Rate YoY(391 of 500 reporting) +25.7% -1.1 percentage point
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 351.41 +1.15:  Growth Rate +26.8% +.4 percentage point, P/E 20.9 +.2
• S&P 500 Current Year Estimated Profit Margin 15.33% +3.0 basis points
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(8 of 10 reporting) +62.1% unch.
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 848.66 +4.42: Growth Rate +114.4% +1.2 percentage points, P/E 19.8 +.1 
• Bloomberg US Financial Conditions Index 1.00 +7.0 basis points
• US Yield Curve 48.5 basis points (2s/10s) +.75 basis point
• Bloomberg Industrial Metal Index 180.3 +.5%
• Dutch TTF Nat Gas(European benchmark) 43.7 euros/megawatt-hour -6.9% 
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 17.8% +1.3 percentage points
• US Atlanta Fed GDPNow Q2 Forecast +3.7% unch.
• US 10-Year T-Note Yield 4.35% -8.0 basis points
• 1-Year TIPS Spread 3.05 -18.0 basis points

• Highest target rate probability for July 29th FOMC meeting: 86.0% (-2.4 percentage points) chance of 3.5%-3.75%. Highest target rate probability for Sept. 16th meeting: 83.6%(-3.0 percentage points) chance of 3.5%-3.75%. (current target rate is 3.5-3.75%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +2,552 open in Japan 
• China A50 Futures: Indicating +54 open in China

• DAX Futures: Indicating +131 open in Germany

Portfolio:

• Higher: On gains in my tech/biotech/industrial/consumer discretionary sector longs
• Disclosed Trades: None 
• Market Exposure: 100% Net Long

Bear Radar

 Style Underperformer:

• Mid-Cap Value +1.0%

Sector Underperformers:

• 1) Energy -5.5% 2) Oil Service -2.4% 3) Networking -1.2%

Stocks Falling on Unusual Volume: 

• SOLS, PBI, PUMP, QDEL, FCEL, LITE, RSI, INGM, AMWD, QSR, WK, CEPT, INMD, MCK, LWLG, HURN, OBE, CLH, RIGL, MRX, QRVO, MDLN, SEDG, PMT, TSLX, UPST, PODD, PARR, MRP, ACEL, CE, J, KD, CART, SWKS, PLOW, FRPT, ALC, FUBO, SLRC, CRK, ACIC, CPNG, PRM, RVLV, ANDE, EVER, BFAM, ANET, CC, DLX, COR, TECH, CDW, CRTO, NICE, AZTA, TMDX and KVYO

Stocks With Unusual Put Option Activity:

• 1) UWMC 2) ARKG 3) SOLS 4) TMDX 5) CPNG

Stocks With Most Negative News Mentions:

• 1) PRIM 2) COR 3) LAW 4) SMRT 5) ATOM

Sector ETFs With Most Negative Money Flow:

• 1) XLF 2) SMH 3) XLV 4) XBI 5) FDN

Charts:

• ETFs Falling on Unusual Volume
• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Large-Cap Growth +1.4%

Sector Outperformers:

• 1) Gold & Silver +7.1% 2) Computer Hardware +6.2% 3) Airlines +6.1%

Stocks Rising on Unusual Volume:

• OSS, FLEX, HUT, AVTX, VCYT, NNE, GEO, VECO, DVA, FLYW, DOC, SMCI, ACLS, IFF, AMD, SHAZ, SII, WOLF, KMT, OKLO, MRAM, GLW, RIOT, AOSL, LIVN, LTH, URGN, ARM, UAMY, TGTX, INFQ, BV, TX, ALOY, BIDU, TKR, IREN, IPX, IONQ, CORZ, IPGP, FLY, OSCR, BMA, LAR, CGNT, UMC, ELAN, QUBT, UBER, WYFI, NBIX, CVS, EXEL, DIS, HNGE, TGS, HEI, TIC, BABA, XNDU, CLYM, LFUS, MP, VSH, JBGS, CGNX, HNRG, XIFR, GPK, MRCY, DXYZ, FLS, ESTA, ONC, IART, SUPN, BETA, QCOM, FMS, ADEA, BALL, PENG, CRML, CLX, REYN, AYA, KNX, ADPT, INBX, RMAX, SGRY, DSGN, ARW, RMAX, DSGN, SANM, SONY and CRYX

Stocks With Unusual Call Option Activity:

• 1) ARKG 2) OSS 3) MAR 4) XIFR 5) ATOM 

Stocks With Most Positive News Mentions:

• 1) AMD 2) ARM 3) FLEX 4) COMP 5) DVA

Sector ETFs With Most Positive Money Flow:

• 1) IGV 2) XLE 3) DRAM 4) BAI 5) XLK

Charts:

• ETFs Rising on Unusual Volume
• Stocks Rising on Unusual Volume

Tomorrow's Earnings/Economic Releases of Note; Market Movers

Earnings of Note 
Company/Estimate 

Before the Open:

• (ARW)/2.92
• (B)/.81
• (BDX)/2.78
• (CG)/.93
• (CARS)/.46
• (LNG)/4.25
• (DDOG)/.51
• (ESAB)/1.34
• (GWW)/10.21
• (HTZ)/-.72
• (HWM)/1.11
• (LGND)/1.82
• (MTSI)/1.07
• (MCD)/2.74
• (PZZA)/.37
• (PLNT)/.63
• (SHAK)/.12
• (TPR)/1.29
• (ZTS)/1.60 
• (ACHR)/-.31
• (DDS)/10.26
• (SATS)/-.48
• (MELI)/8.52 

After the Close: 

• (AFRM)/.17
• (ABNB)/.30
• (AKAM)/1.60
• (AAOI)/-.05
• (XYZ)/.68
• (CENX)/1.57
• (NET)/.23
• (COIN)/.06
• (ED)/2.28
• (CRWV)/-.91
• (DKNG)/.01
• (EXPE)/1.41
• (GILD)/1.91
• (GH)/-.81
• (HUBS)/2.47
• (IREN)/-.22
• (FROG)/.21
• (LYFT)/.05
• (MCK)/11.56
• (MCHP)/.50
• (MNST)/.53
• (MP)/-.03
• (NWSA)/.19
• (LASR)/.08
• (SMR)/-.13
• (POST)/1.75
• (POWI)/.23
• (RNG)/1.17
• (RKLB)/-.07
• (SYNA)/1.01
• (TTD)/.09
• (TOST)/.27
• (WYNN)/1.25
• (YELP)/.26 

Economic Releases 

5:30 am EST

• Challenger Job Cuts YoY for April. 

8:30 am EST

• 1Q Non-Farm Productivity is estimated to rise +.6% versus a +1.8% gain in 4Q.
• 1Q Unit Labor Costs is estimated to rise +2.5% versus a +4.4% gain in 4Q.
• Initial Jobless Claims for last week is estimated to rise to 205K versus 189K the prior week.
• Continuing Claims is estimated to rise to 1800K versus 1785K prior. 

10:00 am EST

• Construction Spending MoM for March is estimated to rise +.2% versus a -.3% decline in Feb. 

11:00 am EST

• The NY Fed 1Y Inflation Expectations Index for April is estimated to rise +3.5% versus a +3.42% gain in March.

3:00 pm EST

• Consumer Credit for March is estimated to rise to $13.25B versus $9.484B in Feb. 

Upcoming Splits

• (CVNA) 5-for-1 

Other Potential Market Movers

• The Fed's Williams speaking, Atlanta Fed GDPNow Q2 update, Fed's weekly balance sheet report, weekly EIA natural gas inventory report, (CRH) annual meeting, (YETI) annual meeting, (ADM) annual meeting, (STRL) annual meeting, (CNX) annual meeting, (NVR) annual meeting, (TTMI) annual meeting, (VLO) annual meeting, (DUK) annual meeting, (AESI) annual meeting, (IRM) annual meeting, (VECO) annual meeting, (C) investor day, (NSC) annual meeting, (UPS) annual meeting, (LUV) annual meeting, (CDNS) annual meeting, (BYD) annual meeting, (CHRW) annual meeting and the Oppenheimer Industrial Growth Conference could also impact global trading tomorrow.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running +29.5% Above 100-Day Average 
• Nasdaq/NYSE Volume Ratio 10.2 -4.2
• 7 Sectors Rising, 4 Sectors Declining
• 66.5% of Issues Advancing, 31.5% Declining 
• TRIN/Arms 1.47 +16.7%
• Non-Block Money Flow +$168.1M
  
• 207 New 52-Week Highs, 25 New Lows
• 58.5% (+4.2%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 61.6 +5.5

Polymarket: 

• Will China invade Taiwan by end of 2026? 6.0% unch.
• Trump announces US blockade of Hormuz lifted by May 31st 48.0% +23.0 percentage points
• US x Iran permanent peace deal by June 30th 45.0% +10.0 percentage points 
• US Invades Iran before 2027 22.0% -9.0 percentage points

Other:

• Bloomberg Global Risk-On/Risk-Off Index 116.6 -1.3%
• Global Monitor Iran Instability Index 100.0 unch.
• Strait of Hormuz Oil Tanker Traffic Curtailed Estimate 90.0% -5.0 percentage points
• US High-Yield Tech Sector OAS Index 473.5 -6.5 basis points
• Bloomberg Cyclicals/Defensives Index 258.3 +.9%
• Morgan Stanley Growth vs Value Index 149.2 +1.1%
• CNN Fear & Greed Index 69.0 (GREED) +2.0
• 1-Day Vix 9.6 -10.9%
• Vix 17.3 -.8%
  
• Total Put/Call .62 -22.5%

Wednesday Watch

Around X:

• @Business  

• Top US officials spent Monday and Tuesday offering new details on the role the US military will play in helping ships pass through the Strait of Hormuz. Hours later, Trump shelved the operation entirely.
• Samsung has reached a $1 trillion market valuation after booming demand for chips used in AI saw the world’s largest memory maker’s stock more than quadruple over the past year.
• Donald Trump will host Brazilian counterpart Luiz Inacio Lula da Silva Thursday, amid tensions over the Iran war and its impact on the global economy. 
• Get up to speed on what's moving global markets. 
• Here’s what you need to know to start your day. 

• @ZeroHedge

• Trump Pauses Project Freedom Amid "Great Progress" Towards 'Complete & Final' Agreement With Iran. 
• SAMSUNG RISES 9.5%, HITS $1T MARKET CAP ON MEMORY CHIP BOOM.
• Trump DOJ Probes 36 Illinois School Districts For Secretly Transitioning Kids Behind Parents' Backs.
• aka SPR to Asia. (graph)  
• Glencore's Kazzinc, Kazakhstan's largest producer of zinc, lead, copper, gold, and silver just had a deadly explosion. 2 dead, 5 injured, building partially collapsed. The critical minerals supply chain isn't just concentrated. It's fragile. (video) 
• Thank you Germany and Britain for sacrificing your economies to save the planet. China appreciates you exporting your manufacturing to provide jobs for their citizens. 
• US Intelligence Only Sees Limited Additional Damage To Iran Nuclear Program Since Last June.
• For the record. Iran’s Historic Mistake. Carl von Clausewitz wrote that war is “the continuation of politics by other means.” President Trump grasped this from the start: Operation Epic Fury exists to stop Iran’s nuclear march and restore deterrence, not to pursue the familiar neocon fantasy of occupation and nation-building. Epic Fury is peace through strength in action: credible force applied decisively when adversaries mistake restraint for weakness. By weaponizing the Strait of Hormuz, Iran committed a strategic blunder of historic proportions. Tehran meant to punish America. Instead, it exposed every power built on imported energy, vulnerable sea lanes, and the delusion that globalization repealed geography. China is exposed. Europe is exposed. Britain is exposed. Iran has created a world where hard resource power decides outcomes.
• How A Musk Victory Vs. Altman Would Reset America's AI Roadmap.
• ISO New England Trims 10-Year Forecast Based On Electrification Outlook.
• "No Quick Fixes": Supply-Chain Deep Dive Shows Beef Prices To Remain High.
• NIH Virologist Vincent Munster Caught Smuggling Deadly Viruses Into U.S., FBI Investigating.
• "F**k This $h1t!": Oil & Yields Drop, Stocks & Crypto Pop As Iran 'Truce' Holds, US Micro/Macro Strong.    

• @CNBC

• Wednesday's big stock stories: What’s likely to move the market in the next trading session.
• Bitcoin treasury firm Strategy breaks from 'never sell' approach to the flagship crypto.
• Asia-Pacific markets set to track Wall Street gains as Trump signals de-escalation in Iran conflict.
• S&P 500 futures are little changed after broad-market index hits a fresh record: Live updates.
• Stocks making the biggest moves after hours: Advanced Micro Devices, Super Micro Computer, Arista Networks & more.
• Aluminum prices are surging. Here's how companies are handling the costs.
• Data suggests 'hiring recession' may be behind us — but the Iran war poses job market risks.
• AMD tops estimates for first quarter as data center revenue jumps 57%.       

• @TheTranscript 

• $AMD CEO: "We delivered an outstanding first quarter, driven by accelerating demand for AI infrastructure, with Data Center now the primary driver of our revenue and earnings growth".
• Arista CEO: "Arista is off to a strong start in Q1 2026". $ANET: -5% AH.
• Super Micro CEO: "Supermicro's transformation into a total datacenter infrastructure provider is accelerating. Our margin recovery and the rapid growth of our DCBBS business demonstrate that our business remains robust." $SMCI: +16% AH. 

• @WallStEngine

• $AMD: “In the past, the CPU-to-GPU ratio was primarily just as a host node in like a 1-to-4 or 1-to-8 configuration. Now [it is] changing and getting closer to a 1-to-1 configuration. You can even imagine if you get lots and lots of agents that you could have more CPUs than GPUs”.

Night Trading 

• Asian equity indices are +1.0% to +2.0% on average. 
• Asia Ex-Japan Investment Grade CDS Index 74.75 -2.0 basis points. 
• China Sovereign CDS 42.75 -.75 basis point.
• China Iron Ore Spot 109.9 USD/Metric Tonne +1.3%. 
• Crude Oil 100.60/bbl. -1.7% 
• Gold 4,643.3 USD/t oz. +1.7%. 
• Swiss Franc/Offshore Chinese Renminbi Cross 8.73 +.07%.
• Bloomberg Emerging Markets Currency Index 35.49 +.1%.
• Bloomberg Global Risk-On/Risk Off Index 117.8 -.3%
• US 10-Year Yield 4.42% n/a.
• Japan 30-Year Yield 3.75% n/a. 
• Volatility Index(VIX) futures 20.7 -1.6%.
• Euro Stoxx 50 futures +.65%. 
• S&P 500 futures +.27%.
• NASDAQ 100 futures +.55%.

Morning Preview Links

BOTTOM LINE: Asian indices are modestly higher, boosted by consumer discretionary and technology shares in the region. I expect US stocks to open modestly higher and to maintain gains into the afternoon.  The Portfolio is 100% net long heading into the day.