For the week 4/13-4/17

[Posted 4:30 PM ET, Friday]

Note: StocksandNews has significant ongoing costs and your support is greatly appreciated.  Please click on the GoFundMe link or send a check to PO Box 990, New Providence, NJ 07974.

Edition 1,408

A rather momentous day, at least we hope so for all the right reasons.  Shortly after 8:45 AM ET, crude oil prices plunged on the following post on X from Iranian Foreign Minister Abbas Araghchi:

“In line with the ceasefire in Lebanon, the passage for all commercial vessels through the Strait of Hormuz is declared completely open for the remaining period of ceasefire, on the coordinated route as already announced by Ports and Maritime Organization of the Islamic Rep. of Iran.” [Emphasis mine…on two key passages.]

The “coordinated route” refers to a route that runs close to Iran’s coast.

Araghchi also didn’t specify whether the “remaining period of ceasefire” was in Lebanon or the one between the United States and Iran.

Recall, Iran has said before the Strait is open to shipping.

President Trump then responded on Truth Social, 9:06 AM:

“IRAN HAS JUST ANNOUNCED THAT THE STRAIT OF IRAN IS FULLY OPEN AND READY FOR FULL PASSAGE.  THANK YOU!”

And at 9:27 AM:

“THE STRAIT OF HORMUZ IS COMPLETELY OPEN AND READY FOR BUSINESS AND FULL PASSAGE, BUT THE NAVAL BLOCKADE WILL REMAIN IN FULL FORCE AND EFFECT AS IT PERTAINS TO IRAN, ONLY, UNTIL SUCH TIME AS OUR TRANSACTION WITH IRAN IS 100% COMPLETE.  THIS PROCESS SHOULD GO VERY QUICKLY IN THAT MOST OF THE POINTS ARE ALREADY NEGOTIATED.  THANK YOU FOR YOUR ATTENTION TO THIS MATTER! PRESIDENT DONALD J. TRUMP”

And the president at 9:57 AM:

“The U.S.A. will get all Nuclear ‘Dust,’ created by our great B2 Bombers – No money will exchange hands in any way, shape, or form. [Emphasis mine.]  This deal is in no way subject to Lebanon, either, but the USA will, separately, work with Lebanon, and deal with the Hezbollah situation in an appropriate manner.  Israel will not be bombing Lebanon any longer. They are PROHIBITED from doing so by the U.S.A.  Enough is enough!!! Thank you! President DJT”

There are reports the U.S. may release $20 billion in frozen Iranian funds in exchange for enriched uranium stockpiles.

President Trump, 10:13 AM:

“Now that the Hormuz Strait situation is over, I received a call from NATO asking if we would need some help.  I TOLD THEM TO STAY AWAY, UNLESS THEY JUST WANT TO LOAD UP THEIR SHIPS WITH OIL.  They were useless when needed, a Paper Tiger!”

And at 10:20 AM:

“Iran, with the help of the U.S.A., has removed, or is removing, all sea mines! Thank you!”

Trump at 10:27 AM:

“Again! This deal is not tied, in any way, to Lebanon, but we will, MAKE LEBANON GREAT AGAIN!”

The above is nonsensical.  The deal is very much tied to Lebanon, according to Foreign Minister Abbas.

Trump at 10:33 AM:

“A GREAT AND BRILLIANT DAY FOR THE WORLD! DJT”

And at 10:40 AM:

“Iran has agreed to never close the Strait of Hormuz again.  It will no longer be used as a weapon against the World! President DONALD J. TRUMP”

Stocks soared as crude oil sank like a rock.  Bonds rallied as well.

This is a time for me to invoke my “24-hour” rule.  Let’s see what happens over the weekend.  And boy, I’m going to have quite an opening next week, including on Trump’s upcoming trip to have a sit down with his “very good friend” Xi Jinping.

Meanwhile, yes, I was thrilled Peter Magyar whipped Viktor Orban in Hungary’s election, Sunday.  More below.

—

Tale of the Tape….

Oil / West Texas Intermediate (WTI)

Friday, Feb. 27…$67.30
Friday, Apr. 17…$84.50

The global benchmark for crude, Brent, is $90.60

Nationwide average prices at the Gas Pump [Source: AAA]

Friday, Feb. 27…regular gas $2.98…diesel $3.75
Friday, Apr. 17…regular gas $4.07…diesel $5.59…down eight and nine cents on the week, respectively.

—

As it all went down in the Middle East, day-by-day, heading into Friday’s action….

Iran and the United States began historic face-to-face negotiations Saturday in Islamabad, Pakistan, days after a fragile, two-week ceasefire was announced.

And 21 hours after talks started, Vice President JD Vance, who led the delegation, said negotiations finished without a deal after the Iranians refused to accept American terms to refrain from developing a nuclear weapon.

There was no immediate comment from the Iranian delegation, but Pakistani mediators called on both countries to maintain the ceasefire.

“It is imperative that the parties continue to uphold their commitment to ceasefire,” Pakistan Foreign Minister Ishaq Dar said, adding that his country will try to facilitate a new dialogue between Iran and the U.S. in the coming days.

Vance said he remained in constant communication with President Trump and others in the administration during the negotiations.

“But the simple fact is that we need to see an affirmative commitment that they will not seek a nuclear weapon, and they will not seek the tools that would enable them to quickly achieve a nuclear weapon,” Vance told reporters.  “That is the core goal of the president of the United States.  And that’s what we’ve tried to achieve through these negotiations.”

“We’ve made very clear what our red lines are, what things we’re willing to accommodate them on, and what things we’re not willing to accommodate them on,” Vance added.

“We were constantly in communication with the team [Ed. Trump, Sec. of State Rubio, Treasury Sec. Bessent, and Adm. Brad Cooper, head of U.S. Central Command] because we were negotiating in good faith,” Vance said.  “And we can leave here, and we leave here with a very simple proposal, a method of understanding that is our final and best offer. We’ll see if the Iranians accept it.”

Iran’s state broadcaster then blamed “unreasonable demands” by the U.S. on the nuclear issue and the Strait of Hormuz for the failure of the talks.

President Trump wrote two rather lengthy posts Sunday morning on Truth Social:

“So, there you have it, the meeting went well, most points were agreed to, but the only point that really mattered, NUCLEAR, was not.  Effective immediately, the United States Navy, the Finest in the World, will begin the process of BLOCKADING any and all Ships trying to enter, or leave, the Strait of Hormuz. At some point, we will reach an ‘ALL BEING ALLOWED TO GO IN, ALL BEING ALLOWED TO GO OUT’ basis, but Iran has not allowed that to happen by merely saying, ‘There may be a mine out there somewhere,’ that nobody know about but them.  THIS IS WORLD EXTORTION, and Leaders of Countries, especially the United States of America, will never be extorted.  I have also instructed our Navy to seek and interdict every vessel in International Waters that has paid a toll to Iran.  No one who pays an Illegal toll will have safe passage on the high seas. We will also begin destroying the mines the Iranians laid in the Straits. Any Iranian who fires at us, or at peaceful vessels, will be BLOWN TO HELL!  Iran knows, better than anyone, how to END this situation which has already devastated their Country. Their Navy is gone, their Air Force is gone, their Anti Aircraft and Radar are useless.  Khomeini [Ed. he meant Khamenei], and most of their ‘Leaders,’ are dead, all because of their Nuclear ambition.  The Blockade will begin shortly. Other Countries will be involved with this Blockade.  Iran will not be allowed to profit off this Illegal Act of EXTORTION.  They want money and, more importantly, they want Nuclear.  Additionally, and at the appropriate moment, we are fully ‘LOCKED AND LOADED,’ and our Military will finish up the little that is left of Iran! President DONALD J. TRUMP.”

And…minutes later….

“Iran promised to open the Strait of Hormuz, and they knowingly failed to do so.  This caused anxiety, dislocation, and pain to many people and Countries throughout the World.  They say they put mines in the water, even though all of their Navy, and most of their ‘mine droppers,’ have been completely blown up.  They may have done so, but what ship owner would want to take the chance?  There is great dishonor and permanent harm to the reputation of Iran, and what’s left of their ‘Leaders,’ but was beyond all of that. As they promised, they better begin the process of getting this INTERNATIONAL WATERWAY OPEN AND FAST!  Every Law in the book is being violated by them.  I have been fully debriefed by Vice President JD Vance, Special Envoy Steve Witkoff, and Jared Kushner, on the meeting that took place in Islamabad through the kind and very competent leadership of Field Marshal Asim Munir, and Prime Minister Shehbaz Sharif, of Pakistan. They are very extraordinary men, and continuously thank me for saving 30 to 50 million lives in what would have been a horrendous War with India.  I always appreciate hearing that – The amount of Humanity spoken of is incomprehensible.

“The meeting with Iran began early in the morning, and lasted throughout the night – Close to 20 hours.  I could go into great detail, and talk about much that has been gotten but, there is only one thing that matters –  IRAN IS UNWILLING TO GIVE UP ITS NUCLEAR AMBITIONS!  In many ways, the points that were agreed to are better than us continuing our Military Operations to conclusion, but all of those points don’t matter compared to allowing Nuclear Power to be in the hands of such volatile, difficult, unpredictable people….”

Earlier, Trump played down the importance of the peace talks, which took place against the backdrop of a fragile cease-fire.  “Whether we make a deal or not makes no difference to me,” Trump said.  “And the reason is because we’ve won.”

Iran deployed navy special forces to its southern coast, according to state media, signaling readiness for a potential invasion by the U.S.

Much of the Revolutionary Guard’s fleet of nimble boats designed to control the Strait of Hormuz remains intact, posing a threat even after the U.S. destroyed most of Iran’s navy.

Iran warned Sunday that military vessels approaching the Strait of Hormuz would be a violation of the fragile cease-fire and face a “strong and forceful response” – following Trump’s announcement of a blockade.

The IRGC insisted it has “full control” of the Strait and that the waterway remains open for non-military vessels.

“Contrary to the false claims of certain enemy officials, the Strait of Hormuz is open for the passage of non-military vessels under smart control and management, in accordance with specific regulations,” the naval forces said in a statement.

By Tuesday, we were talking about individual tankers attempting to transit the Strait, including a U.S.-sanctioned tanker linked to China that was testing the blockade.

No vessels with their transponders on have been sailing into the Persian Gulf since the blockade went into effect.

President Trump’s threats and the start of the blockade have sparked alarm among Asian nations that rely heavily on Middle Eastern energy and fuel exports.  China’s Foreign Minister Wang Yi has urged global stakeholders to push for peace talks between Tehran and Washington.

Speaking of which, the U.S. and Iran were weighing further negotiations to extend the ceasefire.  The objective is to hold fresh discussions before the truce announced on April 7 expires next week.

“We’ve been called this morning by the right people, the appropriate people, and they want to work a deal,” Trump said at the White House on Monday, hours after the U.S. Navy began implementing the blockade of the Strait.

Stocks rose and oil fell after Trump’s remarks.

Fighting has largely paused since the truce was agreed to, but the blockade was testing the durability.

“We can’t let a country blackmail or extort the world,” Trump said, warning Iran against charging fees for vessels to transit the Strait.

Saudi Arabia is pushing Washington to halt the blockade, fearing it could prompt Tehran to escalate tensions and disrupt other regional shipping routes, the Wall Street Journal reported.

The U.S. has warned it will intercept or divert vessels leaving Iran, while allowing neutral ships to pass, though they may be searching for contraband.

While the U.S. and Israel have paused strikes on Iran, Israel continued its campaign in Lebanon against Hezbollah.  The conflict remains a key sticking point in broader ceasefire negotiations, with talks slated between Israel and Lebanon set for Tuesday in Washington.

China slammed the blockade on Tuesday, calling it “dangerous and irresponsible,” and calling for an immediate and full ceasefire to the Strait to be reopened.

Foreign ministry spokesman Guo Jiakun told reporters at a daily briefing in Beijing that the U.S. action would only “inflame tensions, escalate the situation and undermine an already fragile ceasefire,” and that would further jeopardize the safety of navigation in the Strait.

“We urge all parties to abide by the ceasefire arrangement, focus on the broader direction of dialogue and negotiations, take concrete actions to de-escalate the regional situation and restore normal navigation in the Strait at an early date,” Guo said.

He added that the situation in the region was “at a critical stage” and said China would continue to work with the international community to promote peace talks and to strive for peace and stability in the Middle East.

President Trump indicated he may be preparing to wind down the war, boosting market optimism and restoring some stability to global energy prices by the close on Tuesday.

Peace talks with the Islamic Republic might restart “over the next two days,” the New York Post cited the president as saying.  In a separate interview with ABC News, he said extending a two-week ceasefire that was clinched last week may not be necessary, hinting at significant near-term progress without elaborating.

“I think you’re going to be watching an amazing two days ahead,” Trump told ABC. “I really do.

In a Fox Business interview, he said he sees the war as “close to over.”

There were signs Tehran is also trying to avoid escalation, with authorities considering a pause in shipments through the Strait to avoid testing the U.S. blockade and jeopardizing fresh negotiations.

But the shift in narratives from Washington – from announcing a total blockade of Hormuz to expectations of a possible breakthrough – has left many questions unanswered, including the fate of Iran’s enriched uranium.  Israel maintains the material must be removed, while Trump said he wasn’t pleased about reports that the U.S. had demanded that Iran agree to a two-decade moratorium on enrichment because it could never be allowed to have nuclear weapons.

Trump didn’t commit to whether the U.S. would remain in negotiations to secure a deal with Iran, or to withdrawing military forces without a peace plan.

“It could end either way, but I think a deal is preferable because then they can rebuild,” he told ABC News.  “They really do have a different regime now.  No matter what, we took out the radicals.”

The U.S. Navy has been impeding traffic outside the Strait in the Gulf of Oman and appears to have forced some carriers, including the U.S.-sanctioned Rich Starry, to make a U-turn back toward the Persian Gulf.  An Iraq-bound supertanker was reportedly sailing through the waterway as of Wednesday morning, a transit that would make it the first crude carrier to head west through the conduit since the blockade began.

But there are a lot of conflicting reports on what, if anything, is getting through.

The U.S. military said the blockade has “completely halted economic trade” to and from Iranian ports by sea, hours after military officials said U.S. warships confronted six merchant vessels departing an Iranian port and forced them all to turn back.

Adm. Brad Cooper, commander of Centcom, said late Tuesday an estimated 90 percent of Iran’s economy is fueled by international sea trade.  “In less than 36 hours since the blockade was implemented, U.S. forces have completely halted economic trade going into and out of Iran by sea,” Cooper said in a post.

To execute the blockade, officials said, American naval assets are not lingering near Iranian ports or in the Strait of Hormuz itself.  Iranian forces mined the Strait, one of several flash points in negotiations, soon after hostilities began more than six weeks ago.

“Our net is the Gulf of Oman,” one official said, who explained that the U.S. warships involved wait for an opportune moment – after observing vessels leave Iranian facilities and clear the Strait – before intercepting the merchant ships and forcing them to turn around.

Wednesday morning, President Trump then posted on Truth Social:

“China is very happy that I am permanently opening the Strait of Hormuz. I am doing it for them, also – And the World.  This situation will never happen again. They have agreed not to send weapons to Iran.  President Xi will give me a big, fat, hug when I get there in a few weeks. We are working together smartly, and very well!  Doesn’t that beat fighting???  But REMEMBER, we are very good at fighting, if we have to – far better than anyone else!!! President DJT”

“Permanently opening the Strait of Hormuz”?  What?  That’s the goal, but hardly the case today.

Wednesday, crude oil was essentially unchanged, amid the ever-changing narratives that nonetheless ignore some basic facts.  In Asia, there are serious supply issues for not just oil but basic commodities and essentials for day-to-day life, which will spread soon to Europe…even if the Strait fully reopened tomorrow.

We have no idea what any deal between the U.S. and Iran will end up looking like, especially in terms of the enriched uranium stockpile deep beneath the surface of the earth in at least two locations.

That said, as Adm. Cooper correctly noted, the impact of the blockade on Iran’s economy is immediate and we’ll see how the Iranian people react…and the whole regime apparatus if no one is being paid.

Editorial / Wall Street Journal…on the blockade….

“Mr. Trump says the Navy will even seize tankers that have paid a toll to make it out of the Gulf, another blow to China if the U.S. can execute it. With the help of allies, the President added, the Navy will also de-mine the Strait – important preparation for the ultimate goal of reopening Hormuz to all.  Iran’s regime will have to take that threat more seriously.

“The regime will also have to consider anew the possibility of U.S. air strikes to destroy its oil-export infrastructure at Kharg Island.  This was unlikely while U.S. policy was to keep Iran’s oil flowing.  Now it seems possible, especially if Mr. Trump finds the blockade too slow-moving a policy tool.  Over weeks and months a blockade would strangle the regime’s revenue, but the President may want results at the negotiating table sooner.

“Any reduction in energy flows, even from the trickle Iran was allowing, will be felt by markets and U.S. allies, especially in Asia.  Oil prices will spike if the blockade is enforced at any length.  The President presumably knows this.  He’s telling Iran’s leaders they nonetheless won’t win by playing the clock.

“ ‘Iran promised to open the Strait of Hormuz, and they knowingly failed to do so,’ Mr. Trump wrote Sunday.  He was played to get the cease-fire, and if oil won’t flow there’s no reason to ease pressure on the regime. Oil exports are a better target than Mr. Trump’s misguided threats last week to destroy Iranian ‘civilization’ or all of its power plants.

“As the President said in his first term, the U.S. shouldn’t start a war it doesn’t intend to win.  His challenge now is to prove to Iran’s regime he meant what he said.”

In a second editorial on the impact of the blockade, the Journal opined in part:

“The best estimates we have are from the Foundation for Defense of Democracies’ Miad Maleki, who led the U.S. Treasury’s sanctions campaign against Iran until last year. He writes that the blockade is expected to wipe out $435 million in Iranian economic activity a day and force oil-field shut-ins within two weeks….

“Mr. Maleki calculates that, without exports, surplus production would fill Iran’s oil storage capacity in about 13 days. Then Iran would have to shut-in wells, which can cause severe damage and cost it billions of dollars in annual revenue.

“His conclusion? ‘Iran’s economic structure, heavily dependent on the Persian Gulf transit routes and energy exports, makes continued resistance economically impossible under the U.S. naval blockade.’  That is, if it lasts.  Iran’s regime could think President Trump won’t sustain the blockade beyond a week or two. He may have to prove it wrong with patience.

“Iran’s entire economy will feel the collapse of oil exports. This includes the Revolutionary Guard, which siphons about half the revenue.  Other export routes appear unable to compensate for the loss.  How will Iran’s banks hold up?

“The loss of imports is expected to deepen supply shortages and exacerbate Iran’s inflation, which exceeded 50% before the war.  Food inflation had reached triple digits.”

Meanwhile, some Gulf Arab and European leaders believe that a U.S.-Iran peace deal will take about six months to be agreed upon and that the warring sides should extend their ceasefire to cover the time frame, according to reporting from Bloomberg.

The leaders want the Strait of Hormuz opened immediately to restore energy flows and are warning in private that a global food crisis could easily develop if that doesn’t happen by May.

Gulf states believe Iran is looking to build a nuclear weapon and that hasn’t changed in the wake of the U.S.-Israeli bombardment of the country, the officials are saying.  Thus, a peace deal with Iran must ban it from enriching uranium or having long-range ballistic missiles.

At the same time, Gulf leaders don’t want a return to fighting and want the U.S. pursuing diplomacy.

According to reports Thursday, Washington and Tehran are weighing a two-week extension of the truce, which ends late next Tuesday U.S. time, to allow for more time for negotiations.

And we’re still getting conflicting reports on how many ships are getting through the blockade…some indeed are, even as U.S. Central Command said in a post on X on Wednesday that no vessels got through.

Regardless if it’s zero, five, 9 or 16….it isn’t last year’s 135-a-day average.

Addressing reporters Thursday, President Trump claimed Iran has made key concessions in negotiations with the U.S. and that a deal to end the war could be announced “fairly soon.”

Trump said it may be unnecessary to renew a two-week ceasefire with the Islamic Republic before it expires next week, defying expectations that an extension will be needed to allow more time for diplomacy.

“Iran wants to make a deal. They are willing to do things today that they weren’t willing to do two months ago,” Trump said. “We have a very successful negotiation going on right now. If it happens, it will be announced fairly soon.”

Trump added: “Iran does not have a nuclear weapon, and they’ve agreed to that.  Iran’s agreed to that, and they’ve agreed to it very powerfully.  They’ve agreed to give us back the nuclear dust that’s way underground because of the attack we made with the B-2 bombers.  So we have a lot of agreement with Iran, and I think something’s going to happen, very positive, very important.”

–On a different topic, though highly related, Secretary of State Marco Rubio hosted Israeli and Lebanese officials in Washington Tuesday to solidify a ceasefire in Iran.

These were the first talks between Israel and Lebanon since 1993.

And then around noon on Thursday, Trump posted on Truth Social:

“I just had excellent conversations with the Highly Respected President Joseph Aoun, of Lebanon, and Prime Minister Bibi Netanyahu, of Isarel.  These two leaders have agreed that in order to achieve PEACE between their Countries, they will formally begin a 10 Day CEASEFIRE at 5 p.m. EST… It has been my Honor to solve 9 Wars across the World, and this will be my 10th, so let’s, GET IT DONE! President DONALD J. TRUMP”

However, Hezbollah was not party to the talks or the agreement, casting doubt on how long it might hold.

Wednesday, Netanyahu said he had instructed the Israeli military to continue widening its ground invasion into southern Lebanon.  Israeli authorities have begun destroying homes in Lebanese villages near Israel’s northern border.

Trump said Netanyahu and Aoun would meet in Washington in the next week or two.

—

Wall Street and the Economy

On the economic data front this week, we had an important report on producer prices for March, and they came in less than expected…0.5% on headline, 4.0% year-over-year, and on core, ex-food and energy, 0.1% and 3.8% Y/Y.

Granted, these year-over-year numbers are high, and we’ll see what happens with the April figures when the full impact of the war on prices is better reflected in the data.

Existing home sales declined sharply in March, a sign that the 6% mortgage rates of earlier this year did little to bring buyers back into the market.

And homebuying conditions are arguably worse now: Rates are higher, inflation is up, and general uncertainty is weighing on the economy.

Home sales dropped 3.6% month over month in March to a seasonally adjusted annual rate of 3.98 million, the lowest such figure in nine months, and they are down 1% from a year ago, according to the National Association of Realtors. Economists had expected a smaller monthly decline.

The median home price rose 1.4% to a record $408,800, because inventory remains limited, NAR chief economist Lawrence Yun said.

Freddie Mac’s 30-year fixed-rate mortgage fell to 6.30% this week, down from 6.46% two weeks ago.

One more…March industrial production was down a far more than expected 0.5%, when a slight gain was forecast.

The Atlanta Fed’s GDPNow barometer for first-quarter growth is 1.3%.

Next week is light on the data front, with March retail sales out Tuesday.

The IMF projected in its latest World Economic Outlook that in its base case scenario, if the Iran conflict was resolved promptly, it will still place a drag on the global economy.  In that outcome, oil would average about $80 a barrel this year, and global output might grow 3.1% year-over-year, down from the 3.4% growth recorded last year, and lower than the 3.3% the IMF projected in January.

With the apparent reopening of the Strait of Hormuz today, I think Brent settling around $80 is realistic, for now.

But, the IMF emphasized that even if the war is short-lived, as we may be seeing, the damage to the global economy has been done.

“What is a little strange is that there is a tendency by some to assume that it’s business as usual,” Christine Lagarde, the president of the European Central Bank, said on Tuesday when asked about the seeming exuberance of markets.

Meanwhile, President Trump talked of firing Federal Reserve Chair Jerome Powell if he opted to stay on at the Fed after his term as chair ends, May 15, but  both the law and past precedent suggest that he can serve on a temporary basis until Trump’s pick to replace him, Kevin Warsh, is confirmed by the Senate.

Warsh’s confirmation hearing in the Senate is slated for this coming Tuesday.

Editorial / Wall Street Journal

“There he goes again.  President Trump on Wednesday renewed his threat to fire Jerome Powell if the Federal Reserve Chair doesn’t sail into the sunset when his term as Chairman ends next month. His threat may be bluster, but it’s also self-destructive.  Readers may have noticed this is becoming a presidential habit.

“Mr. Trump is frustrated that his Administration’s criminal investigation into Mr. Powell over a cost overrun on a Fed building renovation is backfiring in a big way. Perhaps that’s what prompted his outburst in a Fox Business interview on Wednesday in which he doubled-down on his earlier threats to sack Mr. Powell.

“If Mr. Powell doesn’t leave when his term as Chair ends on May 15, ‘I’ll have to fire him,’ the President said, adding ‘I’ve wanted to fire him, but I hate to be controversial.’  Who knew?  His Administration manufactured the criminal probe with no evidence of criminal wrongdoing over the Fed renovation to bully Mr. Powell into stepping down.

“Instead, Mr. Powell has dug in and promised not to step down from the Fed board until the probe is concluded. His term as a governor (unlike his four-year term as Chair) doesn’t end until January 2028.  That means he can stay on the board for another two years if he wants. Mr. Trump knows this, which may be why he’s threatening to fire Mr. Powell.

“This would inevitably set up a legal clash a la his attempt last year to remove Fed governor Lisa Cook, a Joe Biden appointee.  Mr. Trump might claim that the building cost overruns give him ‘cause’ under the Federal Reserve statute to fire Mr. Powell.  He seemed to tee up that argument on Wednesday by saying the overruns demonstrate ‘incompetence.’

“But judges are likely to raise an eyebrow, especially given that Mr. Powell wasn’t directly in charge of overseeing the project. By the way, Mr. Trump’s new East Wing ballroom is exceeding its initial projections.  Is that a sign of Presidential incompetence?….

“Firing Mr. Powell would invite a drawn-out legal fight that he might lose and would delay Kevin Warsh’s confirmation as the next Fed Chair.  Though he says Mr. Warsh is a worthy nominee, North Carolina GOP Sen. Thom Tillis is refusing to vote for Mr. Warsh unless the Administration drops its probe of Mr. Powell….

“Mr. Trump might consider how his vendetta against Mr. Powell is complicating Mr. Warsh’s reform efforts at the Fed.  The President is angry that Mr. Powell hasn’t cut interest rates more. But Mr. Powell alone doesn’t set rates, so firing him won’t necessarily get the President what he wants.

“The best way to replace Mr. Powell is to drop the pretextual Justice investigation and get Mr. Warsh confirmed.  Why is this so hard for the President to understand?”

Europe and Asia

We had a report on March inflation for the euro area, 2.6%, up from 1.9% in February, owing to the impact of the Iran war.  Ex-food and energy, however, it was 2.2% vs. 2.3% in February.

Headline inflation….

Germany 2.8%, France 2.0%, Italy 1.6%, Spain 3.4%, Netherlands 2.6%, Ireland 3.6%.

February industrial production in the EA21 was a stronger than expected 0.4% vs. January, but down 0.6% year-over-year.

Big numbers from China this week, with the National Bureau of Statistics reporting a first-quarter growth rate of 5%, better than expected and compared with 4.5% in the fourth quarter of 2025.  This was largely due to strong exports, though they rose only 2.5% in March, far less than forecast, and the Chinese economy is expected to weaken the bulk of the year.

March industrial production was up 5.7% from a year ago, retail sales in the month rose a disappointing 1.7% Y/Y, and fixed asset investment, year-to-date, is up only 1.7%.  Back in the boom days, this last one was consistently in double figures as the country was rushing to build new airports, train lines, and roads.

The March unemployment rate was 5.4%.

Back to exports, they plunged 26.5% to the U.S., resuming a downward trend after February’s brief pause in double-digit declines.  Overall, total exports still grew 14.7% year-on-year, per the General Administration of Customs.

Imports surged in March, 27.8%, largely due to higher commodity prices, including for fertilizer and copper.

In Japan, just a report on February industrial production, up 0.4% year-over-year.

Street Bytes

–What a spectacular three-week rally we’ve seen.  For starters, the Nasdaq is now up 13 sessions in a row, the longest such streak since 1992.  And since Friday, March 27, Nasdaq is up a stupendous 16.8%, the S&P 500 rising 11.9%.

For the week, the Dow Jones rose 3.2% to 49447, while the S&P 500, up 4.5%, and Nasdaq, 6.8%, are at new all-time closing highs of 7126 and 24468, respectively.

—U.S. Treasury Yields

6-mo. 3.67%  2-yr. 3.70%  10-yr. 4.24%  30-yr. 4.88%

Bonds rallied on the ceasefire (including Israel-Lebanon), Strait reopening trade.

The 10-year was at 3.96% on Feb. 27, hours before the war started.

Going back to the release last Friday afternoon of the federal budget deficit for March, $164 billion in the month, and $1.168 trillion for the first six months of the fiscal year, net interest on the debt was $519 billion for the period October through March, exceeding the $481 billion spent on national defense, and on its way to topping $1 trillion for the year ending Sept. 30.

Custom duties were down to $22 billion in March, and $166 billion for the first six months of FY 2026, vs. a budget projection of $406 billion for the full year.  You do the math.

I only bring up the customs number because Treasury Secretary Bessent has been a bit aggressive with the projections, echoing his boss.

—President Trump on Truth Social, Sat. AM:

“Massive numbers of completely empty oil tankers, some of the largest anywhere in the World, are heading, right now, to the United States to load up with the best and ‘sweetest’ oil (and gas!) anywhere in the World.  We have more oil than the next two largest oil economies combined – and higher quality. We are waiting for you.  Quick turnaround!”

Editorial / Wall Street Journal…last Friday night, after Trump blasted an earlier Journal editorial:

“(The situation in the Strait of Hormuz is) even worse than (Trump) suggests.  Iran is allowing fewer ships through the Strait than it did before the cease-fire.  On Wednesday only four or five ships were allowed to pass, none of them oil tankers.  On Thursday eight dry bulk and container ships moved cargo to Iran, and three Iran-linked tankers crossed. Friday saw even less traffic, with only one oil tanker making it across the Strait, per CNN.

“In peacetime some 135 ships transit Hormuz each day, and until tankers again do so in significant numbers, producers won’t restart shut-in wells.  A bottleneck of more than 400 tankers persists.

“The Journal reports that the regime told mediators it will limit total crossings to about a dozen a day. So what exactly is the U.S. getting for the cease-fire?”

So that was last Friday night.

While oil prices hovered around $100 a barrel, the cost of crude was still around 50% more expensive than it was before the Iran war began on Feb. 28, and according to the International Energy Agency, it could get worse.

IEA executive director Fatih Birol suggested that current prices to not reflect the severity of what is going on in the Middle East.

“April may well be even worse than March, because during the month of March, we have already received cargoes which were loaded well before the crisis started… and during the month of April, nothing is being loaded,” he says.

“The longer the disruption is, the more severe the problem becomes.”

Last month, all 32 members of the IEA agreed to release 400 million barrels of their oil stocks to ease supply constraints and Birol signaled that the agency would be prepared to act again.

“400m barrels is only 20% of our resource,” he says.  “We have still 80% in our pocket.  We are assessing the decision. If and when we decide it is the time, we are ready to act and act immediately.

Separately, the IEA warned the conflict could erase global oil demand growth this year, marking the first annual decline since the pandemic, even as prices remain high.  The war has damaged energy infrastructure and severely restricted traffic through the Strait, with an OPEC+ report showing output fell by 7.9 million barrels per day in March.

On the good news side, Saudi Arabia said it has restored the full pumping capacity of its East-West pipeline to 7 million barrels a day, rehabilitating a vital link for oil exports via the Red Sea.

An Iranian strike hours after the ceasefire was declared, damaged one of 11 pumping stations along the 746-mile conduit, reducing throughput, but now its back to normal.

It’s also now about the safety of the Bab el-Mandeb strait, which is threatened by the Houthis.

But now we have Friday’s announcements on the region…developing….

—Big Bank week on the earning front, starting off with Goldman Sachs, which reported profits rose 19% in the first quarter, fueled by jumps in M&A dealmaking and record equity trading.

Net earnings rose 19% to $5.6 billion, or $17.55 per share, exceeding the $16.34 per share that analysts forecast.

Goldman said revenue in its equity trading division rose 27% to a record $5.3 billion, surpassing its previously held record for Wall Street stock trading by $1 billion set in the previous quarter.

Deal making fees jumped 48% to $2.8 billion over the same period, driven by the bank’s M&A advisory unit.

“Goldman Sachs delivered very strong performance for our shareholders this quarter, even as market conditions became more volatile,” Goldman CEO David Solomon said in an earnings release statement.

“The geopolitical landscape remains very complex – so disciplined risk management must remain core to how we operate,” Solomon added.

Total net revenue increased 14% to $17.22 billion over the period.  Analysts expected $16.95 billion.

But revenue in its fixed income, currencies, and commodities intermediation business, also known as FICC, fell 13% from the first quarter of 2025 to $4 billion.

—JPMorgan Chase said profits rose 13% year-over-year in Q1 to $16.5 billion, or $5.94 per share, up from $14.6 billion, exceeding the $5.45 per share that analysts’ forecast.

Net revenue rose 10% to $49.8 billion compared to $45.3 billion in the first quarter of last year and also above expectations. Investment banking fees jumped 28% while trading revenue rose 20% to $11.6 billion.

JPMorgan’s card services and auto lending division reported a 13% jump in revenue, largely thanks to customers carrying higher balances on credit cards.  In total, consumer spending on JPMorgan credit cards rose 9% from a year ago.

JPM CEO Jamie Dimon said with “consumers still earning and spending and businesses still healthy,” the U.S. economy has several tailwinds at its back, including “increased fiscal stimulus, the benefits of deregulation, AI-driven capital investment and the Fed’s asset purchases.”

Dimon, longtime CEO of the country’s biggest bank also named “an increasingly complex set of risks,” including “geopolitical tensions and wars, energy price volatility, trade uncertainty, large global fiscal deficits and elevated asset prices.”

“We cannot predict how these risks and uncertainties will ultimately play out,” Dimon added.

—Wells Fargo reported first-quarter profit of $5.25 billion.  Adjusted earnings per share of $1.56 missed the Street’s $1.58.

The biggest U.S. mortgage lender posted revenue of $31.8 billion in the period.  Its revenue net of interest expense was $21.45 billion, also falling short of Street forecasts.

Wall Street banks face fresh challenges as the Middle East conflict pushes oil prices higher, raising fears of inflation that could keep interest rates elevated and weigh on growth.  For Wells, which earns over 40% of its revenue from consumer banking, higher energy prices also mean consumers are paying more for gas on their credit cards.

“It’s likely energy prices will have some impact on the economy,” CEO Charlie Scharf told analysts, adding that consumers remained strong.

CFO Mike Santomassimo said consumers were probably spending 25% to 30% more on gas than they did before the conflict.

Net interest income – the difference between earnings on loans and payments on deposits – is a key focus for investors assessing the bank’s progress in increasing its interest income after the Federal Reserve lifted WFC’s asset cap.

NII was $12.1 billion in the quarter, a bit below analysts’ expectations.

The bank has aggressively increased its loan book by focusing on credit cards and auto loans, after the Fed lifted the $1.95 trillion asset cap last year, allowing it to expand its balance sheet and pursue stronger growth across businesses.

—Citigroup beat estimates for first-quarter profit on Tuesday, as geopolitical tensions fueled market volatility and boosted trading revenue, while strong dealmaking buoyed investment banking fees.

Shares of the bank hit their highest since Nov. 2008 on Tuesday.

Profit increased to $3.06 per share in the quarter, compared with estimates of $2.65 per share.

Citi also reported its highest quarterly revenue in a decade, $24.6 billion, boosted by market volatility during the quarter, which increased its total markets revenue by 19% from a year ago to $7.2bn.

Fees from equity markets rose 39% in the quarter, helped by growth across derivatives, prime services and cash equities.

Revenue in fixed income trading was up 13% over a year earlier.

—Bank of America, the country’s second-largest bank, reported profits rose to $8.6 billion, or $1.11 per share, exceeding the $1.01 per share that analysts forecast. Net revenue rose 7% to $30.3 billion compared to $28.2bn in the first quarter of 2025.

Investment banking and trading revenue rose 21% and 13%, respectively.

BofA CEO Brian Moynihan said in a statement that during the quarter, his bank “saw healthy client activity, including solid consumer spending and stable asset quality, indicating a resilient American economy.”

“We remain watchful of evolving risks,” he added.

The Charlotte-based bank’s results underscore how the country’s biggest banks saw earnings growth in the first quarter amid significant Wall Street activity and a sturdy U.S. economy, despite the period’s volatile markets bouts, which benefit trading desks.  Bank of America reported a record in quarterly equity trading revenue.

And fees from the investment banking unit rose to $1.8 billion, driven by a 45% jump in M&A advisory fees.

BofA’s rate of credit card delinquencies over 90 days, a leading indicator of future consumer credit quality, declined to 1.30% compared with 1.34% in Q1 2025.

“While we’re navigating many dynamics now from geopolitics to rates to credit, our data continues to tell us that the American consumer and American industry remain resilient,” CFO Alastair Borthwick said in the earnings call.

—Morgan Stanley posted first-quarter results that topped analyst estimates as the firm’s trading operations generated almost $1 billion more in revenue than expected.

Earnings per share came in at $3.44 vs. consensus of $3.00, with profit jumping 29% to $5.57 billion.  Revenue of $20.58 billion beat expectations of $19.72 billion, up 16%.

Equities trading revenue jumped 25% to a record $5.15 billion, or about $450 million above estimates.

Fixed income revenue rose 29% to $3.36 billion, or about $540 million more than expected.

Morgan Stanley’s investment banking revenue surged 36% to $2.12 billion, essentially matching analysts’ forecasts.

And the wealth management division reported revenue climbed 16% to a record $8.52bn as the firm cited rising asset values and fee-generating transactions.

—BlackRock Inc. reported first-quarter earnings of $2.21 billion. Adjusted earnings came out to $12.53 per share with the Street at $11.46 per share.

The investment firm posted revenue of $6.7 billion in the period, also topping consensus of $6.6 billion.

BlackRock ended the first quarter with $13.895 trillion in assets under management, up 19.9% year-over-year but down 1.0% sequentially.  The first benefited from strong flows into its exchange-traded fund offerings, offset by market losses during the quarter.

Net long-term inflows of $136 billion during Q1 represented an annualized organic assets under management growth rate of 4.2%.

–Reuters reported Tuesday that United Airlines CEO Scott Kirby pitched the potential for merging with American Airlines in a meeting with President Trump in late February, according to sources, raising the prospect of an industry-reshaping deal likely to face significant regulatory hurdles.

A combination of two of the largest U.S. network carriers would mark the biggest consolidation move in more than a decade, further tightening a domestic market already dominated by four similarly sized players.

Including international flights, United and America were already the world’s two largest airlines by available capacity in 2025, according to OAG data.

The meeting took place just three days before the start of the U.S.-Israeli war with Iran that sent jet fuel prices soaring.

The United CEO said at a forum in September that two-thirds of long-haul seats to and from the United States are on foreign carriers, but 60% of passengers are U.S. citizens.

Industry officials have said the chances of the deal’s approval would be slim, citing likely opposition from unions, rival airlines, lawmakers and airports, as well as concerns about route overlap and job losses.

One person close to the White House told Reuters there was skepticism about such a tie-up, given its potential impact on competition and ticket prices at a time when the administration is already focused on rising costs for consumers ahead of midterm elections in November.

The big four airlines, including Delta and Southwest, control the bulk of domestic traffic, each with a share of roughly 17%, according to Department of Transportation data.

Transportation Secretary Sean Duffy said in a recent interview that there was room for consolidation in the U.S. airline industry, but warned any deal would face close scrutiny for its impact on consumers.

American has been under pressure to improve profitability and close the gap with Delta and United, the airline burdened with $25 billion in long-term debt, more than its larger rivals.

–Meanwhile, airfares are surging, up 15% in March from a year ago, according to the latest CPI date.  Fares rose 2.7% over the month in March, after a 1.4% increase in February.  Delta, American, Southwest, and United have all raised their first checked bag fee by $10 to offset surging jet fuel costs.

—Spirit Airlines is facing a steeper climb out of bankruptcy due to rising fuel prices.

Spirit is engaged in discussions with creditors, who are exploring options including a potential liquidation of the airline.

The airline had reached an agreement with a group of creditors just days before the start of the Iran war.

Spirit returned to bankruptcy court in August, less than a year after a previous chapter 11 restructuring failed to solve financial challenges presented by its no-frills business model.

—TSA checkpoint numbers vs. 2025

4/16…116 percent of 2025 levels
4/15…106
4/14…80
4/13…95
4/12…124
4/11…83
4/10…99
4/9…117

—Taipei, Taiwan-based TSMC raised its annual revenue forecast on Thursday and said it was stepping up capital spending this year as the world’s biggest contract manufacturer of advanced AI chips scrambles to meet relentless hunger for its products.

The bullish outlook comes after the company, a major supplier to Nvidia, said first-quarter profit leapt 58% to a record $18.2 billion, comfortably beating expectations and marking its eight straight quarter of double-digit growth.

CEO C.C. Wei told analysts on a call that TSMC was being prudent in planning due to macroeconomic uncertainties from the Middle East conflict and also said that AI-related demand continued to be “extremely robust” – remarks likely to ease investor concerns about the impact of the war.

Full-year revenue in U.S. dollar terms would grow more than 30%, compared with a previous forecast of close to 30%, while capital expenditure would be at the high end of its earlier guidance of $52 billion to $56 billion, he added.

—Netflix Chairman and co-founder Reed Hastings is stepping down from the company’s board after his term expires in June, the streaming giant announced Thursday as part of its earnings call.  Hastings had a nearly three-decade run at the direct-to-consumer pioneer.

Netflix said Hastings wants to focus on philanthropy and other pursuits.  He has been active in politics as a major Democratic donor.

It’s the end of an era for the company, which under his leadership transformed from a DVD-by-mail business to a leader in subscription streaming that disrupted Hollywood by changing how people consume and make entertainment.

The shares fell 10% initially on the news, which came after the close.  It didn’t help that the company reported disappointing guidance, as operating margins would be lower year-over-year.

Hastings co-founded Netflix in 1997 and served as its CEO for 25 years.  He became CEO in 1999 and remained in the post until eventually ceding the role to co-CEOs Ted Sarandos and Greg Peters.

The company posted revenue of $12.25 billion for the quarter, up 16.2% from the same year-earlier period.  Net income was $5.28 billion, up nearly 83%.  Netflix said its results were driven by subscriber growth, increased pricing and higher advertising revenue.

This was the first earnings report since Netflix pulled out of its bid for Warner Bros. Discovery’s film and TV studios and HBO Max streaming.

Paramount, the winner for WBD, footed the bill for the $2.8 billion breakup fee Warner owed Netflix as a result of accepting Paramount’s offer, which helped push Netflix’s earnings per share to $1.23 for the first quarter, up 86% from the same quarter a year ago.

—Johnson & Johnson reported first-quarter earnings that beat Wall Street expectations on Tuesday and raised its full-year forecast, as strong demand for cancer drug Darzalex and psoriasis treatment Tremfya more than offset a steep falloff in sales of its blockbuster autoimmune drug Stelara.

The drug and device maker reported first-quarter revenue of $24.1 billion, up nearly 10% from a year earlier, exceeding estimates of $23.6 billion.  Adjusted earnings of $2.70 per share were above consensus of $2.66.

Stelara, which topped $10 billion in annual sales at its peak, is facing biosimilar competition after losing patent protection last year.  Sales of the drug fell around 60% from a year ago to $656 million.

CFO Joseph Wolk said in an interview that instead of switching to the biosimilars, many patients have chosen other treatments like Tremfya.

Tremfya, which treats psoriasis as well as inflammatory bowel diseases, brought in $1.6 billion for the quarter, above analysts’ forecasts of $1.2bn.

Sales of Darzalex, a blood cancer therapy launched in 2015, were $4.0 billion, also above the Street’s forecasts.

Quarterly sales for the medical technology business rose 7.7% to $8.6 billion, in line with consensus.  And JNJ raised its full-year 2026 revenue forecasts to a new midpoint of about $100.8 billion, while lifting adjusted earnings to $11.55 per share, both basically in line with current expectations.

—PepsiCo’s price cuts for salty snacks in the U.S. and resilient demand for diet sodas helped it top Wall Street estimates in the first quarter, providing a buffer against growing macroeconomic uncertainty and the threat of higher costs due to the Iran war.

With affordability taking center stage, PepsiCo cut prices by up to 15% on brands such as Lay’s and Doritos in February to address concerns over multiple hikes and win back shelf space at retailers, driving the first rise in volumes in the North America foods category in at least a year.  The division has struggled over the last few years as budget-strained consumers traded down to cheaper brands or switched to healthier alternatives.

CEO Ramon Laguarta has also launched a cost-cutting effort that includes trimming its product lines and shutting some production centers to simplify its North America supply chain amid pressure from activist investor Elliott Management.

PepsiCo expects organic revenue to increase between 2% and 4% and core constant currency earnings per share to grow 4% to 6%, reaffirming its annual targets for a second time this year.

–A federal jury on Wednesday found that Live Nation, the concert giant that owns Ticketmaster, has operated as a monopoly in violation of federal and state antitrust laws, ending a closely watched trial in New York that could have far-reaching consequences in the music industry.

The judge overseeing the case, Aun Subramanian, will determine remedies in a separate proceeding. That could include significant divestment by Live Nation, or even a breakup of Live Nation and Ticketmaster – an outcome that the federal government had called for when filing its case almost two years ago, though it is sure to be vigorously contested by Live Nation.

Last year, Live Nation put on 55,000 events and sold 646 million tickets around the world.  According to testimony, Ticketmaster sells about 10 times as many tickets as its closest rival, AEG.

The government, among many other issues, argued that Live Nation tried to prevent outside promoters from putting on shows in their amphitheaters. The government said the company had violated antitrust laws by effectively forcing artists to work with it if they wanted to participate in the amphitheater market, where Live Nation controls 42 of the top 50 venues.

Overall, the government selected a group of 257 amphitheaters and arenas it defined as “major concert venues,” of which it said 70 percent were controlled by Live Nation, and that Ticketmaster handled 86 percent of the ticketing for concerts in those venues.

Live Nation argues that Ticketmaster wins business because it is the best ticketing service, not because venues are threatened.  But at one point, jurors were shown internal data that indicated fan satisfaction with Ticketmaster had dropped from 18 percent in 2021 to 1 percent in 2023.

–Finally, we note the passing of a Wall Street giant, Mark Mobius, a pioneer in emerging markets investing.  He was 89, working essentially right up to the end.

Known as the “Indiana Jones of emerging markets” for his willingness to unlock new, sometimes hazardous jurisdictions, Mobius relished the challenge.  “Volatility,” he wrote in “Passport to Profits,” one of his many books, “is not an enemy to fear but a sign that opportunity is close a hand.”

Just this January, Mobius wrote of the new situation in Venezuela, “with (President Nicolas) Maduro’s exit, we may see a new political and economic order and the country could be reopening to investors.”

Mobius was executive chairman of Templeton Emerging Markets Group, which he worked for over 30 years, traveling relentlessly in search of undervalued businesses and underappreciated economies.  He claimed to have visited at least 112 countries.

Mobius was born to Puerto Rican and German parents in Hempstead, New York.  He received a PhD in economics from MIT.

As one who spent a good portion of his career in the mutual fund industry, I had tremendous admiration for Mobius and the Templeton Group, led by the legendary Sir John Templeton.

I just looked it up…Sir John died 18 years ago this coming July.  Geezuz, time flies.

Foreign Affairs

Russia / Ukraine: Russia hammered civilian areas of Ukraine with hundreds of missiles and drones overnight Wednesday, killing at least 18 people and injuring more than 80 others in its biggest aerial barrage in almost two weeks, officials said Thursday.

Russia launched nearly 700 drones and dozens of ballistic and cruise missiles, primarily targeting civilians, Ukraine’s Foreign Minister Andrii Sybiha said Thursday on X.

At least four people were killed in Kyiv, including a 12-year-old, with more than 50 others injured, Sybiha said.

Nine people were killed and 23 injured in the southern port city of Odesa, four were killed in the central Dnipro region, and one person was killed in Zaporizhzhia in the south.

Critical port and infrastructure was damaged in addition to residential buildings in Odesa.

“Such attacks cannot be normalized. These are war crimes that must be stopped and their perpetrators held to account,” Sybiha said on X.

Ukraine’s air force said air defenses shot down or disabled 667 out of 703 incoming targets, including 636 Shahed-type drones and other uncrewed aerial vehicles.

It said 20 strike drones and 12 missiles hit 26 locations.

Ukrainian President Volodymyr Zelensky posted on X: “Russia is betting on war,” saying he had instructed Ukraine’s air force commander to contact the country’s arms suppliers to speed up the supply of Patriots and other critical missile-defense systems.

Last Saturday, Russian drone strikes killed another two people in Odesa.

President Vladimir Putin declared a 32-hour ceasefire over the Orthodox Easter weekend, ordering Russian forces to halt hostilities from 4 p.m. Saturday until the end of Sunday. [The Odesa strike was late Friday night into Saturday.]

Russia and Ukraine accused each other Sunday of violating the ceasefire.

The General Staff of Ukraine’s Armed Forces said in a statement Sunday that it had recorded 2,299 ceasefire violations by 7 a.m. local time, including assaults, shelling and small drone launches.  It said that the use of long-range drones, missiles, or guided bombs had not been reported.

Russia’s Defense Ministry claimed it had recorded 1,971 ceasefire violations by Ukrainian forces, including drone strikes on Russia’s Kursk and Belgorod regions that injured civilians.

—Russian oil revenues nearly doubled in March, the International Energy Agency said in a report on Tuesday, as higher oil prices driven by the war in Iran provided a lifeline for the Kremlin while its budget ran record deficits.

Revenues from Russian exports of crude and refined products rose to $19 billion in March from $9.7 billion in February, the report said.

The windfall arrived at a time of great need for the Kremlin.  Last week, the Russian Finance Ministry reported that the national budget deficit exceeded $60 billion in the first three months of the year, surpassing the deficit number projected for all of 2026.

The March export surge was not yet reflected in Russia’s deficit figures.

—President Trump posted on Truth Social, Wednesday:

“NATO wasn’t there for us, and they won’t be there for us in the future!”

China: President Trump threatened “big problems” for China last Saturday if they deliver air defense systems to Tehran while the U.S. is locked in a war with Iran.

“If China does that, China is gonna have big problems, OK?” Trump told reporters outside the White House.

U.S. intelligence sources have said that the People’s Republic was planning to send shoulder-fired anti-air missile systems known as MANPADS to Tehran through third parties over the next few weeks in an attempt to hide the shady weapons transfer, according to CNN.

The munitions use heat-seeking guidance to lock onto an aircraft’s engine or exhaust, and were a major obstacle in Iran – with one nearly taking out an F/A-18 Super Hornet last week.

The American F-15 fighter jet shot down by Iran on April 3 was hit by a “handheld shoulder missiles, [a] heat-seeking missile,” according to Trump.

Trump then said on Wednesday that he exchanged letters with President Xi about Beijing’s potential role in the war, according to an interview on Fox Business.

“He is somebody I get along with very well. He just wrote me a beautiful letter.  He responded to a letter that I wrote because I had heard that China is giving weapons to [Iran],” Trump said in the interview.

Trump didn’t elaborate when the letter exchange took place.

Beijing has denied reports that China was planning to provide weapons and military technology to Iran.

Xi, however, railed against the breaking of the international rule of law Tuesday during a reception with Spanish Prime Minister Pedro Sanchez, an outspoken critic of the war himself, saying their two countries should work together to “oppose the world’s retrogression to the law of the jungle.”

“Maintaining the authority of international rule of law means not using it when it suits us and abandoning it when hit doesn’t,” Xi said during a meeting with the crown prince of Abu Dhabi, also on Tuesday.

Yet Wednesday, Trump issued his glowing Truth Social post noted up top absolving China of an intent to send weapons to Tehran.

—President Xi Jinping said Wednesday that the stability and certainty of China-Russia relations are particularly “precious” in the face of an international landscape intertwined with change and chaos.

During a meeting with Russian Foreign Minister Sergey Lavrov in Beijing, Xi said the strong vitality and exemplary significance of the friendship treaty between the two countries stand out even more under such a backdrop.

Xi said China and Russia need to use closer and stronger strategic collaboration to defend the legitimate interests of both nations and safeguard the unity of Global South countries, the state broadcaster CCTV reported.  He also called for the two countries to showcase the responsibility and commitment of major powers and permanent members of the UN Security Council, the report said.

Xi touted the value of the two nations’ ties, but he did not specify what he referred to as chaos and changes in the international context.  His remarks came as uncertainty lingered on how long the Iran war would last.

—American views on China have softened ahead of the high-stakes Trump-Xi summit May 14-15, with positive sentiment nearly doubling since 2023, a survey by the Pew Research Center had found.

While a significant majority of Americans still regard China as a competitor to the U.S. rather than a partner, fewer call the world’s second largest economy an adversary than in 2025, according to the survey, which was released on Tuesday.

“Today, 27 percent of Americans have a positive opinion of China.  That has risen 6 percentage points since last year and nearly doubled since 2023,” Pew reported.

I’d like to see who these 27 percent are.

Hungary: Prime Minister Viktor Orban conceded defeat on Sunday (before counting had really even got going) after what he called a “painful” election result, ending 16 years in power for a powerful figure in the far-right movement allied with President Trump and Russian President Putin.

Opposition leader Peter Magyar’s party dominated, in a bombshell election result with repercussions around Europe and beyond.

“Thank you, Hungary!” Magyar posted on X, as thousands of his supporters thronged the banks of the Danube in Budapest.  Hungarians have said “yes to Europe” with this vote, Magyar told the huge crowd, and called on them to celebrate peacefully, before beginning the “healing” of the country tomorrow.  He told supporters he will restore Hungarian democracy.

As he spoke, the crowd chanted “Europe” and “Russians go home.”

Magyar’s Tisza party secured two-thirds of all the seats in parliament – the type of landslide victory that means they will be able to make sweeping changes to the country.

Ukrainian President Zelensky sent his congratulations to Magyar and his party “on their resounding victory,” writing on X that a “constructive approach” had prevailed.

Polish Prime Minister Donald Tusk exclaimed on social media: “Back together!  Glorious victory, dear friends!”

Congratulations flowed in from all over Europe.

French President Emmanuel Macron: “France welcomes the victory of democratic participation, the Hungarian people’s commitment to the values of the European Union, and Hungary’s commitment to Europe.”

German Chancellor Friedrich Merz: “Let’s join forces for a strong, secure, and, above all, united Europe.”

Orban’s Hungary has been the most pro-Russia country in the EU – regularly blocking EU loans and aid to Kyiv, as well as sanctions on Moscow.

Editorial / Wall Street Journal

“Maybe Viktor Orban’s Hungary isn’t the model for American conservatism.  On Sunday Hungarians voted in a landslide to oust the Prime Minister and his Fidesz party after 16 years in power, which carries lessons for the GOP.

“As we write this, center-right opposition leader Peter Magyar’s Tisza party is on track to win 138 or so of the 199 seats in Hungary’s Parliament. That super-majority would allow for the repeal of Mr. Orban’s anti-democratic revisions to Hungarian institutions, and it shows how much Fidesz had outlived its welcome.  Turnout by all accounts was high….

“The Magyar victory will be a disappointment for both Vladimir Putin and President Trump if you can believe it.  Mr. Orban is a Kremlin favorite and routinely tried to frustrate EU support for Ukraine.  Mr. Magyar wants to move Hungary away from Russia and toward Europe, a shift that would serve U.S. interest.  His first step may be ending Mr. Orban’s obstruction of a $105 million EU loan to Kyiv as it holds out against Russia’s brutal invasion.

“The Trump Administration would be wise to put its Orban romance in the past and engage with Mr. Magyar to help him succeed. The election is also a warning to those on the American right who think redistribution and industrial policy are the path to a durable conservative majority.”

Magyar told journalists that he would not be phoning Donald Trump (or JD Vance, after the vice president’s two-day campaign visit last week for Orban), but if Trump phoned him, he would say he was glad as they were “strong allies in NATO,” and he would invite him to attend the 70th anniversary of the Hungarian uprising against Soviet occupation next October.

Understand, Orban’s control over the media was so complete, Magyar appeared on public radio and TV this week for the first time in 18 months!  Magyar said he and his party faced 300 lies every day, not allowing him a single appearance on state TV.

But Wednesday, he appeared on a half-hour broadcast on state-run radio followed by an appearance on M1 TV, in which he confirmed his aim to suspend their news coverage and form a new broadcast authority to ensure press freedom.

Random Musings

–Presidential approval ratings….

Rasmussen: 43% approve of President Trump’s job performance, 54% disapprove (Apr. 17).

–Two members of Congress – Democratic Rep. Eric Swalwell of California and Republican Rep. Tony Gonzales of Texas – announced on Monday that they planned to exit Congress.

Both faced expulsion in the wake of sexual-misconduct allegations.

House leaders had been facing loud demands to hold votes to kick out Swalwell and Gonzales.

The San Francisco Chronicle and CNN last week published accounts from women accusing Swalwell of sexual misconduct, including an unnamed former staff member who said he had sexually assaulted her. The Manhattan district attorney’s office is investigating the allegations, one of which concerns an alleged incident in New York City.

Swalwell announced he was suspending his campaign for California governor, where he was a frontrunner.

Gonzales admitted last month to having an affair with a staffer who later died after setting herself on fire but denied being the cause of her death.

Some in Congress have also been calling for the expulsion of two other embattled lawmakers, Dem. Rep. Sheila Cherfilus-McCormick and Republican Rep. Cory Mills, both of Florida, who have been under scrutiny from House investigators for months.

Rep. Nancy Mace (R-S.C.) said: “The House needs to be cleaned out, and it starts with these four.”

House Republicans gained one additional seat in the lower chamber Tuesday as Rep. Clay Fuller (R-Ga.) was sworn in to his seat after winning a special election to succeed former Rep. Marjorie Taylor Greene last week.

With Fuller in office, Republicans now hold a 217-213 edge in the House over Democrats.  Rep. Kevin Kiley (Calif.) left the Republican Party to become an independent last month but still caucuses with the GOP.

But then in New Jersey, a special election Thursday to fill the seat vacated by Gov. Mikie Sherrill (D) was won by a Democrat, uber progressive Analilia Mejia, former top aide to Bernie Sanders.

This is the district that literally starts a block from me.  My district has Republican Tom Kean Jr. as our representative, but he’s on thin ice this November.

When Mejia is sworn in, the GOP edge in the House will be 217-214, with Kiley essentially making it 218.

—Pope Leo vs. Donald Trump and JD Vance….

Sunday night, President Trump slammed Pope Leo XIV on Truth Social, 9:03 PM:

“Pope Leo is WEAK on Crime, and terrible for Foreign Policy. He talks about ‘fear’ of the Trump Administration, but doesn’t mention the FEAR that the Catholic Church, and all other Christian organizations, had during COVID when they were arresting priests, ministers, and everybody else, for holding Church Services, even when going outside, and being ten and even twenty feet apart.  I like his brother Louis much better than I like him, because Louis is all MAGA.  He gets it, and Leo doesn’t!  I don’t want a Pope who thinks it’s OK for Iran to have a Nuclear Weapon. I don’t want a Pope who thinks it’s terrible that America attacked Venezuela, a Country that was sending massive amounts of Drugs into the United States and, even worse, emptying their prisons, including murderers, drug dealers, and killers, into our Country.  And I don’t want a Pope who criticizes the President of the United States because I’m doing exactly what I was elected, IN A LANDSLIDE, to do, setting Record Low Numbers in Crime, and creating the Greatest Stock Market in History.  Leo should be thankful because, as everyone knows he was a shocking surprise. He wasn’t on any list to be Pope, and was only put there by the Church because he was an American, and they thought that would be the best way to deal with President Donald J. Trump.  If I wasn’t in the White House, Leo wouldn’t be in the Vatican.  Unfortunately, Leo’s Weak on Crime, Weak on Nuclear Weapons does not sit well with me, nor does the fact that he meets with Obama Sympathizers like David Axelrod, a LOSER from the Left, who is one of those who wanted churchgoers and clerics to be arrested. Leo should get his act together as Pope, use Common sense, stop catering to the Radical Left, and focus on being a Great Pope, not a Politician.  It’s hurting him very badly and, more importantly, it’s hurting the Catholic Church!  President DONALD J. TRUMP”

Pope Leo said on Monday that he had “no fear of the Trump administration,” following the president’s scalding attack.

Speaking to reporters on a flight to Algeria, Leo said he was not afraid of “speaking out loudly of the message of the Gospel, which is what I believe I am here to do.”  Asked directly about Trump’s comments on Truth Social, Leo said: “It’s ironic – the name of the site itself.  Say no more.”

Trump then posted an AI-generated image depicting himself as a Christ-like figure which sparked an uproar among some religious conservatives, including criticism that the image was blasphemous.

Less than a day later, the image of a man wearing a white robe draped with a red shawl was removed from Truth Social in what was a rare concession to critics.

The president then admitted he posted it and said the image was misconstrued, and that he was depicted as a doctor not Jesus.

“You had the Red Cross right there, you had, you know, medical people surrounding me, and I was like the doctor, you know, as a little fun playing the doctor and making people better,” he said in an interview. “So that’s what it was viewed as.”

Roughly 1 in 5 Americans identify as Catholic, and this single act can definitely impact some House races this fall.

Archbishop Paul S. Coakley, president of the U.S. Conference of Catholic Bishops, issued a statement defending the pope after Trump’s criticism.

Pope Leo posted on X, 9:00 AM ET, Tuesday:

“God’s heart is torn apart by wars, violence, injustice and lies.  But our Father’s heart is not with the wicked, the arrogant, or the proud. God’s heart is with the little ones and the humble, and with them He builds up His Kingdom of love and peace day by day.  Wherever there is love and service, God is there.”

Italian Prime Minister Giorgia Meloni slammed Trump’s criticism of Leo as “unacceptable.”

“The Pope is the head of the Catholic Church, and it is right and normal that he calls for peace and condemns every form of war,” she said.

Trump on Tuesday, 11:34 PM, on Truth Social:

“Will someone please tell Pope Leo that Iran has killed at least 42,000 innocent, completely unarmed, protesters in the last two months, and that for Iran to have a Nuclear Bomb is absolutely unacceptable.  Thank you for your attention to this matter. AMERICA IS BACK!!! President DONALD J. TRUMP”

Earlier Tuesday, Vice President JD Vance, at a Turning Point USA rally in Georgia, said the pope should be careful when talking about theology.

Vance, who converted to Catholicism and calls himself deeply religious said he welcomed the pope commenting on immigration and abortion.

But Vance said the pontiff was wrong to say that political figures should never wield the sword because that would have opposed the U.S. liberation of France and the Holocaust concentration camps during World War II.

“I think it’s very, very important for the Pope to be careful when he talks about matters of theology,” Vance said.

Pope Leo had said in a social media post on April 10 that anyone who is a disciple of Christ “is never on the side of those who once wielded the sword and today drop bombs.”

Vance said the pontiff should be as careful talking about theology as the vice president is when talking about public policy.

“I like that the pope is an advocate for peace.  I think that’s certainly one of his roles,” Vance said.  “On the other hand, how do you say that God is never on the side of those who wield the sword?”

“When the Pope says that God is never on the side of people who wield the sword, there is more than a 1,000-year tradition of just war theory,” Vance continued. “We can, of course, have disagreements about whether this or that conflict is just.”

“If you’re going to opine on matters of theology, you’ve got to be careful, you’ve got to be sure it’s anchored in the truth and that’s one of the things that I try to do and that’s certainly something I would expect from the clergy,” Vance added.

Leo praised the ceasefire Trump announced, but over the weekend, as peace negotiations failed in Pakistan, Pope Leo said in a prayer service, “Enough of the idolatry of self and money! Enough of the display of power! Enough of war! True strength is shown in serving life.”

Bishop James Massa, chairman of the U.S. Catholic bishops’ doctrine committee, pushed back against JD Vance’s suggestion that Pope Leo be more “careful when he talks about matters of theology.”

“For over a thousand years, the Catholic Church has taught just war theory and it is that long tradition the Holy Father carefully references in his comments on war,” Bishop Massa said in a statement.  To be a just war, he said, “It must be a defense against another who actively wages war, which is what the Holy Father actually said: ‘He does not listen to the prayers of those who wage war.’”

He added, “When Pope Leo XIV speaks as supreme pastor of the universal Church, he is not merely offering opinions on theology, he is preaching the Gospel.”

—Canadian Prime Minister Mark Carney gained a majority in the House of Commons after special parliamentary elections this week, solidifying his Liberal Party’s hold on power.

Since last year, five members of opposition partners joined the Liberals, bringing Carney to within one vote of the 172 needed for a majority, and then he was projected to win all three elections on Monday, giving the prime minister an outright majority.

—The U.S. military said it had struck a boat in the eastern Pacific Ocean on Wednesday, killing three people that it accused of smuggling drugs.

It was the third such strike in three days, and the 51st attack against boats in the Caribbean and eastern Pacific that the U.S. said were engaged in the narcotics trade.

At least 177 people have been killed in the attacks.

—Hampshire College, a small liberal arts school in Western Massachusetts, has succumbed to years of financial struggle and will close permanently after the fall semester.

This is a problem faced by countless small colleges and universities across the country…more than 300 have closed from 2008 to 2024, according to an analysis by The Hechinger Report.

Filmmaker Ken Burns made his first documentary movie as a student at Hampshire, graduating in 1975.

The school, known for experimentation in classes and methods, offered “sort of medieval guild-like tutors and apprenticeships,” Burns said.

—New Jersey Transit plans to raise prices to an eye-popping $150 for riders traveling from New York Penn Station to MetLife Stadium for the eight FIFA World Cup games being held in the Garden State in June and July, including the Final.

Normally, the 18-mile trip, with a stop at Secaucus station, typically runs $12.90.

You can imagine the outrage in my area.  Commuters are being told to work from home on select days.  Not everyone can do that.

–The strongest tropical cyclone of 2026, Super Typhoon Sinlaku, intensified rapidly on Sunday to become one of the strongest storms on the planet this year, packing sustained winds of 180 mph and gusts as high as 220 mph as it tracked toward the U.S.-held Marianna islands in the Western Pacific.  For the roughly 50,000 people living on Rota, Tinian and Saipan, there was major cause for concern.

The eye then ended up passing over Saipan and Tinian Tuesday night, packing maximum sustained winds of 150 mph, or a CAT 4, according to the National Weather Service.

The people who live on these islands are American citizens. Nearby Guam, where the U.S. has a massive military presence, avoided the worst, but still had downed power lines and a foot of water.  Flooding was several feet deep in Saipan, as the two picked up as much as 16 inches of rain.

It was worrisome that Sinlaku and the now dissipated Cyclone Maila, were such intense storms so early in the season, when Northwest Pacific typhoons are typically strongest from July through November.

But Sinlaku and Maila will likely help intensify this year’s expected El Nino, which as I wrote last week has the potential to reshape global weather patterns, affecting everything from hurricane seasons to droughts worldwide.

Speaking of typhoons/hurricanes, The Weather Company (Weather Channel) and Atmosphere G2 released their hurricane forecast for the 2026 season, less than normal due to the coming El Nino, 12 named storms with six becoming hurricanes, and only two reaching CAT 3 or stronger.

The average is 14 named storms, seven hurricanes and three major ones.

Back to Saipan, damage was extensive to the island, but it seems there were no casualties.

I spent a memorable day there a long time ago with Father Gary of the Jesuit Mission Bureau.  I got to talk to survivors of the horrific World War II Battle of Saipan and saw where many of the natives threw themselves off cliffs to avoid capture by the Americans, owing to Japanese propaganda.

On the way to Saipan, via Guam, you fly over Tinian, which was where the Enola Gay was launched.

[Father Gary would drop dead a year later while serving Mass…heart attack.]

—President Trump on Truth Social, last Friday PM:

“Congratulations to the Great and Very Talented Crew of Artemis II. The entire trip was spectacular, the landing was perfect and, as President of the United States, I could not be more proud!  I look forward to seeing you all at the White House soon. We’ll be doing it again and then, next step, Mars!”

Well, not quite.  But it was indeed a spectacular mission and a huge, much-needed shot in the arm for NASA.  All Americans are very proud.

And kudos to NASA administrator Jared Isaacman, whose nomination Trump initially pulled during his spat with Elon Musk, because this was Musk’s recommendation, and we’ve now seen it was the right pick.  He’s perfect for this critical role of both competence and as a public spokesman for the space program.

—

Pray for the men and women of our armed forces…and all the fallen.

Slava Ukraini.

God bless America.

—

Gold $4880…Silver $81.25
Oil $84.50

Bitcoin: $77,448 [4:00 PM ET, Friday]

Regular Gas: $4.07; Diesel: $5.59 [$3.16 – $3.58 yr. ago]

Returns for the week 4/13-4/17

Dow Jones  +3.2%  [49447]
S&P 500  +4.5%  [7126]
S&P MidCap  +3.5%
Russell 2000  +5.6%
Nasdaq  +6.8%  [24468]

Returns for the period 1/1/26-4/17/26

Dow Jones  +2.9%
S&P 500  +4.1%
S&P MidCap  +10.3%
Russell 2000  +11.9%
Nasdaq  +5.3%

Hang in there.

Brian Trumbore