This week
Talk about a busy week!
- Five mega caps reported Q1 earnings – GOOG (+81% YOY), AMZN (+77% YOY), META (+63% YOY), MSFT (+23%), and AAPL (+19% YOY). (And yes, those numbers are correct!) Now, the Nasdaq-100® is on pace for +51% YOY Q1 earnings growth. Also, the AI hyperscalers of the group (all but AAPL) are now planning $725 billion in capex this year.
- Q1 real GDP grew at 2.0% annual pace. About half of that came from AI investment, while the consumer added 1.1 percentage points, even as spending grew at its slowest pace in a year.
- 22% year-over-year (YOY) growth in gas prices pushed headline PCE inflation to 3.5% YOY in March from 2.8% – that’s a nearly three-year high.
- U.S. oil prices have eased, but remain above $100 per barrel, as President Trump rejected Iran’s latest peace proposal, following reports that President Trump is preparing for an extended blockade of the Strait of Hormuz and weighing another round of attacks.
- Finally, the Fed, which needs multiple bullet points:
- Fed left rates unchanged (3.50%-3.75%), as expected.
- But three members dissented because the statement implies that the next move is a cut, and they believe a hike is also possible.
- It was Powell’s last meeting as Fed Chair, but he’s staying on as governor at leastuntil investigations into the Fed building renovations are “over with finality and transparency.”
- Fed Chair nominee Kevin Warsh one step closer to confirmation after Senate Banking Committee advanced his nomination to the full Senate.
For the week, equity markets seemed more focused on strong earnings growth, with the Nasdaq-100® rising 1% to a new record high, while bond markets seemed more concerned about inflation, as 10-year Treasury yields rose over 5bp to 4.4%.
Next Week
Here are the top events I’m watching next week:
- Tuesday: ISM and S&P Services PMIs (Apr.), JOLTS Job Openings (Mar.), AMD Q1 Earnings
- Wednesday: ADP Private Jobs (Apr.)
- Thursday: Productivity (Q1)
- Friday: Nonfarm Jobs (Apr.), UMich Consumer Sentiment (May Prelim.)
