1. PPI Day: The Inflation Data Is In — And the Fed Has No Easy Outs
The March Producer Price Index dropped this morning and came in lower than expected.
But, let’s see. This may not be all. If oil prices do remain elevated, producers will feel it. Just matter of time.
This matters: the Fed meeting is coming up in few weeks and a hot producer inflation print closes the door on rate cuts. Keep in mind: multiple Fed officials are going to be speaking through the week. Watch the narrative.
2. Oil at $96 — The Hormuz Blockade Isn’t Done
The US Navy has blockaded Iran’s ports, and that sent Oil screaming past $103 a barrel over the weekend — more than 50% above pre-war levels.
As I write this, WTI is pulling back to around $96 as peace talk optimism takes hold — Trump says Iran still wants to deal, VP Vance is calling there’s “a lot of progress.”
Time to go short oil? Keep in mind, oil is extremely headline driven and all it takes just one headline for it to pop. The Strait of Hormuz moves roughly 20% of global oil supply, and a blockade doesn’t just evaporate because talks are back on.
Energy stocks have pulled back a bit – if you actively searching, focus on quality over quantity. In case oil prices slide, speculative names will get crushed the most.
3. Carney Gets a Free Hand? — And Canadians Seem to Like It
Last night’s three byelection wins — tipped PM Mark Carney’s Liberals into majority territory: 174 seats in the House of Commons. This has never happened in Canadian political history — a government flipping from minority to majority between elections. And Canadians have been watching: Carney has pushed back hard on Trump tariffs, launched major infrastructure spending, and positioned Canada as a serious energy exporter to the world.
A majority now means no more minority-government fragility, no more holding the confidence of parliament on a knife’s edge. Carney has the room to make big moves. Let’s see what he does with it.
Don’t forget: Canadian consumers have some structural issues, and they are not happy at the moment.
4. Gold at Around $4,800 — Still Running, But Don’t Chase Blind
Gold is sitting close to $4,800 an ounce this morning — pulled back yesterday as oil prices jumped but then recovered.
That said, gold has held up really well and remains well above where it was few years ago. I also think market thinks inflation comes back, and uncertainty remains. Plus, central banks continue to buy… event if its lower amount. They are not net sellers yet.
But, don’t rule out that you can have a flat/down year in a bull market.
Keep a close watch on 50-week moving average or around 200-day moving average. This has acted as a strong support level. A break below it could bring some profit taking, and gold prices falling into $3500-$3300.
5. S&P 500— Banks Set the Tone for Earnings Season
The S&P 500 closed Monday up 1.02%, essentially wiping out Iran war losses, with futures edging higher again this morning.
But here’s what I’m really watching: earnings seasons has begun.
Banks are setting the tone at the moment, and let’s see if we get some more color on private credit from them.
Also remember: guidance is more important. Market is saying oil shock is temporary and doesn’t change the course of the economy. There’s still lots of complacency, and so much concentration moving the indices.
Value is below the top 100 names.