[Posted 4:30 PM ET, Friday]
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Edition 1,409
Tale of the Tape….
Oil / West Texas Intermediate (WTI)
Friday, Feb. 27…$67.30
Friday, Apr. 24…$95.05
The global benchmark for crude, Brent, is $106.05
Nationwide average prices at the Gas Pump [Source: AAA]
Friday, Feb. 27…regular gas $2.98…diesel $3.75
Friday, Apr. 24…regular gas $4.05…diesel $5.46
I get a kick out of how the market reacts to every little headline, such as today, when word came out that Iranian Foreign Minister Abbas Araghchi was heading to Pakistan for talks with the U.S., and West Texas Intermediate fell from $97 to $93 in a flash on this supposedly good news.
The White House said it was sending Jared Kushner and Steve Witkoff to Islamabad to meet with Araghchi, even though Iran has made it clear they don’t want to meet with the two real estate guys anymore.
Nothing will come out of this weekend. If the two sides even meet, it might not be until Monday.
Tomorrow represents eight weeks for the conflict…not “4-6.” President Trump said he’s in no hurry, that he can be patient to make a good deal, but of course he knows this can’t drag out into summer, with persistently high prices at the pump as America hits the road. It’s not looking good for November and Republicans being able to hold onto the House.
[Then again, Democrats don’t have a message! Geezuz, they are pathetic.]
I’ve said all along, now that we’re in it…we gotta win it. We have to gain possession of the enriched uranium, by force or through diplomacy.
And I said at least a month ago, it is beyond me why President Trump doesn’t have a photo-op/press conference with International Atomic Energy Agency Director General Rafael Grossi.
There is no single person who has more knowledge of Iran’s nuclear program than he. Grossi has maximum credibility.
Mr. President, again, I beseech you. If you want to ‘sell’ the mission to the American people, and get your approval ratings up a little, at least, use Grossi. He’s an asset.
—
As it all went down, day by day….
—Editorial / Wall Street Journal, Friday evening:
“President Trump all but declared Friday as V-I Day, for Victory over Iran, but hold off on the parade. ‘IRAN HAS JUST ANNOUNCED THAT THE STRAIT OF IRAN IS FULLY OPEN,’ he wrote Friday on Truth Social. That’s also what the April 8 cease-fire was supposed to allow.
“Re-opening the Strait is good news, if it happens this time, and financial markets behaved as if they think it will. Equities rose and the price of oil dropped sharply on the news, which gives the U.S. policy breathing room.
“Then again, calling Hormuz the ‘Strait of Iran’ reflects Tehran’s view. Iran’s Foreign Minister said Friday the Strait is open ‘in line with the [10-day] ceasefire in Lebanon’ and only ‘on the coordinated route’ through Iranian waters. That would leave Iran in control. The test is whether tankers begin moving in numbers through the normal route without fear of Iranian attack.
“The good news is that Mr. Trump said the U.S. blockade of Iranian ports will persist until a deal is reached. This is critical to the success of negotiations, and it no doubt had something to do with Iran’s concession on the Strait. The blockade is serious U.S. leverage – as was Israel’s war on Hezbollah before Mr. Trump insisted this week that Israel stop it….
“Media for the Islamic Revolutionary Guard Corps are already criticizing Iran’s Foreign Minister and threatening to keep the Strait closed. Some officials said Iran will still charge tolls to transit the Strait.
“There’s also a lively debate inside the Administration about what to do as the cease-fire with Iran expires next Wednesday. Some would extend it by as long as 60 days, but that idea seems to have been dropped. The better idea is no extension, or a very short one, so the regime can’t drag out talks as it always prefers. A long cease-fire helps Iran, which Adm. Brad Cooper says is already digging out missiles and launchers that have been trapped but not destroyed.
“The imperative now is to keep the pressure on. The U.S. blockade, which expanded on Thursday to interdict sanctioned vessels, is critical. The economic cost to Iran is mounting, and, if it is sustained, Tehran will soon have to shut-in wells that it will be costly to restart. The regime also needs to know the U.S. will strike again if it won’t come to terms.
“Mr. Trump is right to insist Iran turn over its enriched uranium, and the regime shouldn’t be allowed to keep some in reserve or give it to an unreliable third-party. This applies to Iran’s 20% enriched uranium in addition to the 60% enriched, as the one become the other.
“Mr. Trump has the right instincts about Iran, and we will be the first to give him credit if the Iranian concessions turn out to be real. But his frequent assertions that a deal is imminent also tell the regime he is desperate to end the war. This makes the regime less likely to make the concessions Mr. Trump needs to claim a legitimate and lasting victory.”
So then Saturday, Iran reversed course on reopening the Strait, reimposing restrictions after the U.S. said the reopening would not end its blockade.
Tehran’s joint military command said that its “control of the Strait of Hormuz has returned to its previous state…under strict management and control of the armed forces.”
It warned it would continue to block transit through the Strait as long as the U.S. blockade of Iranian ports continued.
The Islamic Revolutionary Guard Corps (IRGC) statement accused the U.S. of “piracy,” saying that its “so-called blockade” amounts to maritime robbery.
In a post on X, Friday night, Mohammad Bagher Ghalibaf, Iran’s top negotiator and parliament speaker, wrote:
“1 – The President of the United States made seven claims in one hour, all seven of which were false.
“2 – They did not win the war with these lies, and they will certainly not get anywhere in negotiations either.
“3 – With the continuation of the blockade, the Strait of Hormuz will not remain open.
“4 – Passage through the Strait of Hormuz will be conducted and based on the ‘designated route’ and with ‘Iranian authorization.’
“5 – Whether the Strait is open or closed and the regulations governing it will be determined by the field, not by social media.
“6 – Media warfare and engineering public opinion are an important part of war, and the Iranian nation is not affected by these tricks.”
Ghalibaf then said late Saturday that there had been progress toward a peace deal with the U.S. but that “we are far from a final agreement.” He also warned that Tehran stands ready to resume the fight should the U.S.-Iran cease-fire that was set to lapse in midweek-expire or collapse.
Meanwhile, the Trump administration issued a fresh waiver permitting countries to buy sanctioned Russian oil and petroleum products.
The move is an extension of an earlier sanctions waiver that expired on April 11th.
Saturday, several oil tankers U-turned in the Gulf after appearing to try to transit the Strait, as shipowners and oil traders remain in a state of disarray as they try to figure out what is Iran’s position.
Trump posted on Truth Social, Sunday morning:
“Iran decided to fire bullets yesterday in the Strait of Hormuz – A Total Violation of our Ceasefire Agreement! Many of them were aimed at a French Ship, and a Freighter from the United Kingdom. That wasn’t nice, was it? My Representatives are going to Islamabad, Pakistan – They will be there tomorrow evening, for Negotiations. Iran recently announced that they were closing the Strait, which is strange, because our BLOCKADE has already closed it. They’re helping us without knowing, and they are the ones that lose with the closed passage, $500 Million Dollars a day! The United States loses nothing. In fact, many Ships are headed, right now to the U.S., Texas, Louisiana, and Alaska, to load up, compliments of the IRGC, always wanting to be ‘the tough guy!’ We’re offering a very fair and reasonable DEAL, and I hope they take it because, if they don’t, the United States is going to knock out every single Power Plant, and every single Bridge, in Iran. NO MORE MR. NICE GUY! They’ll come down fast, they’ll come down easy and, if they don’t take the DEAL, it will be my Honor to do what has to be done, which should have been done to Iran, by other Presidents, for the last 47 years. IT’S TIME FOR THE IRAN KILLING MACHINE TO END! President DONALD J. TRUMP”
President Trump then said that the U.S. had seized an Iranian-flagged ship in the Gulf of Oman that attempted to get past the U.S. blockade, the first known episode in which force has been used.
The announcement came hours after he said U.S. negotiators would arrive in Pakistan on Monday for peace talks. Iran hasn’t publicly confirmed the talks and state media suggested officials may skip the discussions.
Commercial traffic through the Strait was at a virtual standstill on Monday after a brief and confused reopening over the weekend.
Pakistan moved ahead with preparations for a new round of talks in the coming days.
President Trump told Bloomberg in an interview Monday that he’s “highly unlikely” to agree to extend the ceasefire with Iran ahead of a possible second round of talks with Tehran.
Parliament Speaker Ghalibaf said in a post on X Monday night:
“Trump, by imposing a siege and violating the ceasefire, seeks to turn this negotiating table – in his own imagination – into a table of surrender or to justify renewed warmongering.
“We do not accept negotiations under the shadow of threats, and in the past two weeks, we have prepared to reveal new cards on the battlefield.”
The U.S. Navy has turned back 27 ships trying to enter or exit Iranian ports since the blockade began about a week ago, CENTCOM said Monday.
The military also said a team of Marines was searching and scanning a large number of containers aboard the Touska, an Iranian cargo ship that the Navy disabled and seized on Sunday after it tried to evade the blockade.
Chinese President Xi said the Strait should remain open in a phone call with Crown Prince Mohmmed bin Salman of Saudi Arabia, according to Chinese state television.
“The Strait of Hormuz should remain open for normal passage, which aligns with the common interest of countries in the region and the international community,” Xi said in the call.
It was the first time he urged the reopening of the waterway.
“China advocates for an immediate and comprehensive ceasefire, supports all efforts conducive to restoring peace, and insists on resolving disputes through political and diplomatic channels,” Xi was quoted as saying.
Tuesday, the U.S. was still in the dark on whether Iran would take part in a second round of talks to end the war before a ceasefire expired on Wednesday evening EDT, with the sides deadlocked on issues including access to the Strait of Hormuz.
President Trump said Tehran had “no choice” but to send a delegation to negotiations with Vice President Vance primed to fly to Islamabad Tuesday. Trump told CNBC the U.S. was in a strong negotiating position and is “ready to go” with resumption of bombing if a breakthrough isn’t reached.
Iran told regional mediators that it would send a negotiating team to Pakistan on Tuesday, but there was still confusion, according to reports, with Iranian Foreign Ministry representative Esmaeil Bagaei [Ed. also spelled Baqaei] saying there was no plan for a second round of negotiations.
“As of now, we have no plans for the next round of negotiations,” Bagaei said. “We don’t believe in deadlines or ultimatums to secure Iran’s national interests.”
We then learned Tuesday afternoon that Vice President Vance was still in Washington, not on his way to Islamabad. The Iranians also were not in Pakistan.
There were also reports Iran only wanted Vance, and that Tehran was finished with Steve Witkoff and Jared Kushner.
Then at 4:09 PM, Tuesday, President Trump posted on Truth Social:
“Based on the fact that the Government of Iran is seriously fractured, not unexpectedly so and, upon the request of Field Marshal Asim Munir, and Prime Minister Shehbaz Sharif, of Pakistan, we have been asked to hold our Attack on the Country of Iran until such time as their leaders and representatives can come up with a unified proposal. I have therefore directed our Military to continue the Blockade and, in all other respects, remain ready and able, and will therefore extend the Ceasefire until such time as their proposal is submitted, and discussions are concluded, one way or the other.”
And at 8:36 PM, Tuesday:
“Iran doesn’t want the Strait of Hormuz closed, they want it open so they can make $500 Million Dollars a day (which is, therefore, what they are losing if it is closed!). They only say they want it closed because I have it totally BLOCKADED (CLOSED!), so they merely want to ‘save face.’ People approached me four days ago, saying, ‘Sir, Iran wants to open up the Strait, immediately.’ But if we do that, there can never be a Deal with Iran, unless we blow up the rest of their Country, their leaders included!”
It was a total 180 from what the president had said earlier in the day, befitting his day-to-day ever-changing pronouncements on the war, and going into Wednesday, talks remained in limbo.
Pakistan Prime Minster Sharif in a statement thanked Trump for extending the ceasefire “to allow ongoing diplomatic efforts to take their course.”
Iranian Foreign Ministry spokesman Baghaei said Wednesday that Iran stood ready to defend itself militarily while remaining open to the prospect of further talks.
At least two fully laden Iranian tankers have sailed out of the Persian Gulf and past a U.S. blockade this week, according to Vortexa. Figures from the data intelligence firm suggest that Iran is still able to export its oil, with at least 34 Iran-linked tankers and gas carriers making their way through the Strait and past the warships.
Wednesday, the IRGC then said it had seized two container ships in the area of the Strait, Iranian news media reported, hours after President Trump announced he was extending a cease-fire.
Earlier Wednesday, UK Maritime Trade Operations, a shipping monitor run by the British Navy, reported that two ships had been attacked near the Strait, one by a gunboat belonging to the Revolutionary Guards. Iranian news media reported that the Guards had targeted two cargo vessels, the MSC Francesca and Epaminondas, and the force’s Navy later claimed to have seized the ships after they attempted to navigate “without the necessary permits.”
Thursday morning, Trump posted on Truth Social at 8:45 AM:
“I have ordered the United States Navy to shoot and kill any boat, small boats, though they may be (Their naval ships are ALL, 159 of them, at the bottom of the sea!), that is putting mines in the waters of the Strait of Hormuz. There is to be no hesitation. Additionally, our mine ‘sweepers’ are clearing the Strait right now.* I am hereby ordering that activity to continue, but at a tripled up level! Thank you for your attention to this matter.”
*The Pentagon informed Congress on Tuesday during a classified briefing for the House Armed Services Committee that it could take six months to fully clear the Strait of mines, according to officials familiar with the discussion. A Pentagon spokesman said the preceding was “inaccurate.” [Washington Post]
And then at 9:14 AM, Trump posted:
“Iran is having a very hard time figuring out who their leader is! They just don’t know! The infighting is between the ‘Hardliners,’ who have been losing BADLY on the battlefield, and the ‘Moderates,’ who are not very moderate at all (but gaining respect!), is CRAZY! We have total control over the Strait of Hormuz. No ship can enter or leave without the approval of the United States Navy. It is ‘Sealed up Tight,’ until such time as Iran is able to make a DEAL!!!”
We then had a report Thursday afternoon from Israeli media that the IRGC had pushed Iranian parliament speaker Ghalibaf off the negotiating team.
President Trump then announced that Israel and Lebanon had agreed to extend their ceasefire a further three weeks, following talks between the two countries’ envoys in Washington.
Israel retains its “right to take all necessary measures in self-defense, at any time, against planned, imminent, or ongoing attacks,” while Lebanon must take “meaningful steps” to prevent Hezbollah and all other “rogue non-state armed groups” from carrying out attacks against Israeli target.
—Hezbollah was blamed for the killing of a French soldier who was struck down when a UN peacekeeping force came under fire in southern Lebanon on Saturday.
Lebanon raised the toll from six weeks of war between Israel and Hezbollah to 2,454 dead as a fragile 10-day ceasefire holds.
—Iran has arrested more than 3,600 people on charges related to the war ranging from sharing videos with media outlets based overseas to possessing Starlink internet terminals, an NGO said on Tuesday.
Norway-based Iran Human Rights (IHR) said the figure, based on state media reports and its own research, represented a minimum given the current internet restrictions in the Islamic Republic, and that the actual number of arrests was “likely much higher.”
—
Wall Street and the Economy
There is a tremendous disconnect between the markets and the crisis in the Middle East. Europe is at risk of running out of jet fuel within six weeks. Fertilizer prices have spiked so high that they could force food prices up into next year. There are shortages of key ingredients, like for all plastics – meaning the cost of any product with plastic packaging could be going up. Factories in countries such as Vietnam and Bangladesh that U.S. corporations rely on to make products are getting crushed by soaring energy prices and they are at risk of shutting down.
“Some countries may be richer than the others,” Fatih Birol, executive director of the International Energy Agency, told the Associated Press this week. “Some countries may have more energy than the others, but no country, no country is immune to this crisis.”
Here in the U.S., though, earnings season has been strong, no doubt. And so has consumer spending, witness American Express’ earnings report where they talked about the resiliency of the card giant’s business.
“I think the impressive statistic…I would focus on is 18% growth in retail luxury spend, 12% growth in premium cabins on airlines, and global travel bookings being at a record high,” Amex CEO Stephen Squeri told reporters. “That tells you they [our cardholders] don’t care about gas prices.”
But Squeri admitted “we’re not representative of the economy,” it’s just that “premium consumer is still spending…still spending in restaurants, they’re spending in lodging, they’re spending on travel.”
Yes, this is all part of our K-shaped economy…the haves and the have nots.
Some have described the disconnect between the markets and the ongoing crisis as similar to the way markets reacted during the pandemic. After initially plunging, they bounced back quickly – ignoring the lasting damage that had been done to the supply chains that drive world economies, and the steep inflationary risks those disruptions caused. Then came the hangover, and the pain manifested itself in financially punishing aftershocks that swept the globe.
“People are fooling themselves into thinking this will all be resolved very quickly,” said Emma Ashford, a senior fellow at the Stimson Center, a foreign policy think tank, and the author of a book titled “Oil, the State, and War: The Foreign Policies of Petrostates.” “It is not true. At some point this reality has to snap back together.”
We had Kevin Warsh’s Senate Banking Committee confirmation hearing on Tuesday, and North Carolina Republican Sen. Thom Tillis said Warsh would be getting confirmed and Chair Jerome Powell would likely be leaving the Fed board if it wasn’t for the Department of Justice launching a “bogus investigation.”
Tillis then essentially argued the Fed’s case for it in talking about why the building project went over the original budget. The majority of the inflation “seems to be legitimate,” he said.
Tillis has vowed to vote against confirmation, even while he supports Warsh, because of the DOJ investigation into the Fed building and Chair Powell’s comments during his own testimony concerning the project.
Prior to the hearing, however, President Trump ranted and raved about how he could have done the Fed project for far less and how the investigation needed to continue.
Then today, Friday, the Justice Department said it would end its criminal investigation of Chair Powell, seemingly clearing the obstacle that has stalled Warsh’s confirmation as his successor.
U.S. Attorney Jeanine Pirro announced the move, saying her office is closing an inquiry into Powell’s testimony to Congress. A federal judge had already ruled the grand jury subpoenas served on the Fed in January were improper and found “essentially zero evidence” of criminal wrongdoing.
Pirro said in a post on X that she closed the probe after asking the Fed’s inspector general to scrutinize the matter.
“I expect a comprehensive report in short order and am confident the outcome will assist in resolving, once and for all, the questions that led this office to issue subpoenas,” Pirro said.
But Pirro also said that the government could reopen the matter if conditions warranted it, and it wasn’t known if this would satisfy Sen. Tillis. As I go to post, he has yet to comment.
On the economic data front, just a reading on March retail sales, up a stronger than expected 1.7%, the number driven largely by a record 15.5% surge in gasoline station receipts as fuel prices spiked amid the Iran war. Ex-autos the figure handily beat consensus as well, 1.9%.
The Atlanta Fed’s GDPNow barometer for first quarter growth is 1.2%.
Freddie Mac’s 30-year fixed-rate mortgage is 6.23%.
Next week is a busy one, with some major earnings reports and the Fed’s preferred inflation barometer, the personal consumption expenditures index, as well as a first look at first-quarter GDP.
Plus, we have what might be Chair Powell’s last Fed meeting and press conference, Wednesday afternoon. His term ends May 15, though he can stick around until 2028 as a governor should he so choose. The Fed’s Open Market Committee won’t convene again until June 16-17.
Europe and Asia
We had flash PMI readings for the month of April in the eurozone and the composite reading of 48.6 is a 17-month low (50 the dividing line between growth and contraction). Manufacturing 52.2, services 47.4. [S&P Global]
Germany: manufacturing 51.7, services 46.9
France: mfg. 52.9, services 46.5
UK: mfg. 51.8, services 52.0
Chris Williamson, Chief Economist at S&P Global Market Intelligence:
“The eurozone is facing deepening economic woes from the war in the Middle East, presenting a major headache for policymakers. The conflict has pushed the economy into decline in April, while driving inflation sharply higher. Increasingly widespread supply shortages meanwhile threaten to dampen growth further while adding more upward pressure to prices in the coming weeks.
“April’s flash PMI has moved into contraction territory for the first time since late 2024, signaling a 0.1% quarterly rate of GDP decline after a 0.2% gain had been signaled for the first quarter. The war is currently hitting the service sector hardest, where business activity is falling at a rate not seen since the pandemic lockdowns of early 2021*. However, the sustained growth of manufacturing seen in April comes with something of a sting in the tail, as demand for goods is being buoyed by stock building as companies scramble to secure purchases ahead of further price hikes or supply shortages. Manufacturers have increased their buying of inputs to a degree not witnessed since early 2022 as supply chain delays have also risen to the most widespread since the pandemic.”
*I believe Mr. Williamson meant to write ‘early 2020.’
Nothing out of China this week after last week’s data dump.
Japan’s April flash PMIs had manufacturing at 54.9, much better than expected, and services 51.2.
March inflation came in at 1.5% vs. 1.3% prior, with the figure ex-food and energy at 2.4%.
Separately, Japan is very concerned that the closure of the Strait of Hormuz and the further disruption to energy shipments, combined with an unusually early spell of hot weather, could leave the country facing power shortages at the worst possible moment.
In the bleakest scenario, that could force the government to introduce planned power outages, ask offices, schools and shops to shorten their hours, and cut some train and flight services.
The concern for Japan is not simply oil. While Tokyo says it has ample crude reserves, analysts warn the more immediate vulnerability is liquefied natural gas, which is used to generate electricity in Japan’s major cities and is harder to store in large volumes.
Street Bytes
—Stocks finished mixed on the week, with the Dow Jones falling a bit, 0.4%, while the S&P 500 and Nasdaq closed today at new all-time highs, up 0.6% and 1.5%, respectively.
Huge week for earnings coming up. Alphabet, Amazon, Meta and Microsoft on Wednesday; Apple on Thursday.
—U.S. Treasury Yields
6-mo. 3.69% 2-yr. 3.77% 10-yr. 4.30% 30-yr. 4.91%
Bond yields rose some as oil rebounded after last Friday’s swoon in crude.
—Kuwait declared a further force majeure on shipments of crude oil and refined products, taking into account that it would not be immediately able to meet its full obligations to customers even when the Strait of Hormuz reopens.
State-run Kuwait Petroleum Corp. issued the notice to customers on Friday. The company previously declared force majeure – a legal clause allowing a company not to fulfill contractual obligations because of circumstances outside its control – on sales of oil and refinery products, in early March.
Kuwait has suffered multiple hits to oil infrastructure, and output is now at levels last seen in the early 1990s after the Iraqi invasion. The latest notice takes into account that full operations will take time to recover once hostilities ease.
—President Trump has been saying a lot concerning U.S. oil production and our potential to export, so just wanted to lay out some facts.
According to energy research firm Kpler, U.S. crude exports are on pace for a record 5 million barrels a day this month, with May likely to set another record based on current tanker traffic.
The U.S. exported 4 million barrels of crude a day on average last year, down from its prior record of about 4.6 million in February 2024, according to the Energy Information Administration. The U.S. also ships roughly 3 million barrels of gasoline, jet fuel and diesel each day.
Although it is the world’s largest crude producer, it still imports oil – mostly from Canada and Mexico – for refineries designed to process heavier crude. It imported 6.2 million barrels a day on average last year, according to the EIA.
Does the U.S. have the capacity to send more oil overseas?
It’s complicated. The U.S. produces about 13.5 million barrels of oil a day, but most of that supply is already spoken for.
The nation’s four major oil-export facilities in Texas and Louisiana have a little wiggle room each month to fill up more tankers – but not much. Unlike the LNG market, which is underpinned largely by 20-year contracts, oil shipments are arranged mostly on the spot market. And the upper limit of U.S. oil exports is determined by the physical limitations of the nation’s ports, which for years have been running close to their top capacity.
Companies like Enbridge are working to add more capacity, and the Port of Corpus Christi, the main oil-export hub in the country, just finished a $625 million expansion last year to deepen and widen its ship channel.
And a new LNG terminal recently came online on the Gulf Coast.
But some of the political rhetoric makes it sound like every nation in the world, particularly Asia during the current crisis, can rely on the United States. LNG, sort of…crude oil…not quite.
–Over the weekend in an interview with CNN, Energy Secretary Chris Wright said that gas prices may not drop below $3 per gallon until next year.
President Trump wanted none of that, telling The Hill that Wright is “totally wrong” and predicted that gas prices will drop “as soon as this thing ends,” referring to the war.
—Apple said that John Ternus will take over as CEO from Tim Cook, who will transition to executive chairman in September.
Ternus, 50, is known to be an affable mechanical engineer and 25-year veteran of the company’s hardware division.
Ternus takes the lead of the iPhone maker as it works to rekindle its creative fire and chart a hardware-heavy future in the AI era. He follows Steve Jobs, who led the invention of the most popular consumer product in history, and Tim Cook, who squeezed so much profit from the device that Apple became the world’s most valuable company.
Cook will be remembered for creating immense value. During his tenure, Apple’s market value grew by nearly $3.7 trillion ($350 billion to about $4 trillion), surpassing the value created by any other American CEO in total dollars, save Nvidia’s Jensen Huang.
Ternus, as a top hardware executive, worked on the iPad, then later the Mac and AirPods before taking over responsibility for all of Apple’s products, including its most important, the iPhone.
A leading question for Ternus is whether he can spark Apple’s innovative fire, which some critics feel has been lost under Cook. The company’s most successful products since the iPhone are AirPods earbuds and the Apple Watch, which are big businesses on their own, yet pale next to the iPhone. Other efforts have been less successful. The Vision Pro headset has been a sales dud. A project to build a self-driving car was killed after the company spent billions on development.
Ternus has little experience on artificial intelligence. Although Apple has fallen behind rivals in developing and releasing frontier AI models, the company has avoided the massive capital spending of peers and has reaped significant AI revenue from its App store.
The company is expected to release an overhauled version of its Siri assistant later this year, one produced in partnership with Google.
–With everything that happened on Friday, while I wrote about Spirit Airlines and its ongoing serious financial issues, especially with Jet fuel costs soaring, I didn’t have a chance to write more, concerning how the government was responsible in not allowing the airline to merge with JetBlue years ago.
And then the following came out, which encapsulated the issue perfectly.
Editorial / Washington Post
“The rising price of jet fuel might be the final nail in the coffin for Spirit Airlines, but its final resting place was built by the U.S. government three years ago when it sued to block the budget carrier from being acquired by JetBlue. In the name of protecting competition, the Biden administration ensured there will be less of it.
“Spirit is engaged in discussions with creditors about a potential liquidation of its assets after an earlier plan to escape Chapter 11 bankruptcy unraveled amid the war in Iran. The airline has slashed routes, shrunk its fleet and raised fares. It’s annoying to fly because the company nickels and dimes passengers, and most people cannot stand that experience, yet it has opened up travel to many who otherwise might not have been able to afford it.
“The fight against JetBlue buying Spirit was a solution in search of a problem. The cost of air travel has plummeted since the industry was deregulated in the 1970s. The average airfare cost for domestic travel was 38 percent lower in 2024 than in 2000.
This sad ending could have been averted if the Justice Department hadn’t moved to stop JetBlue from buying Spirit for $3.8 billion. Spirit was losing money but not on the brink of collapse. The deal was a lifeline, and the combined carrier would have been better positioned to compete with the majors.
“Instead, a federal judge sided with the government in January 2024. Then-Attorney General Merrick Garland called it ‘yet another victory for the Justice Department’s work on behalf of American consumers.’ But consumers cannot choose to fly an airline that does not exist.
“This is a common consequence of antitrust enforcement. The government winds up picking winners and losers by pursuing companies for primarily political purposes. Politicians figure they win populist points, but the people they claim to represent end up suffering in the end.”
There were then reports Monday that Spirit had approached the administration for a lifeline, proposing offering an equity stake in the company.
President Trump said in an interview Tuesday that he would “love somebody to buy Spirit” to save jobs.
Wednesday, we learned Spirit was in advanced talks to secure a loan of as much as $500 million from the Trump administration as part of last-minute efforts to avoid shutting down, as first reported by the New York Times.
The government would receive the right to purchase a significant ownership stake in Spirit through warrants, the Times’ sources said.
The goal of the agreement is to give Spirit enough money to establish a sustainable business plan.
–Meanwhile, major Asian airlines have reported surging demand on European routes as travelers shun disrupted Middle Eastern hubs, in a shift analysts suggest could persist for some time even after the Iran conflict ends.
Hong Kong’s Cathay Pacific Airways, Singapore Airlines, Korean Air Lines and Australia’s Qantas Airways last week disclosed robust performance on European routes in March, even as they grappled with a doubling in the price of jet fuel.
Singapore Airlines said the percentage of seats filled on its European flights jumped to 93.5% in March, up from 79.7% a year earlier, due in part to spillover European-bound traffic as capacity through Middle East hubs fell.
Before the conflict, Emirates, Qatar Airways and Etihad Airways together accounted for about one-third of passenger traffic between Europe and Asia and carried more than half of all passengers flying from Europe to Australia, New Zealand and Pacific Islands.
The major Gulf carriers have been gradually restoring capacity, with all three reaching at least 60% of pre-conflict flight numbers, Flightradar24 data shows. But they have to contend with other challenges such as Australia warning citizens not to travel to or even change planes in the Gulf, meaning they are not covered by travel insurance.
Qantas said it had adjusted its operations to capture the shift, redeploying capacity from U.S. and domestic routes to expand flights to Paris and Rome.
“Qantas continues to see strong demand for international travel to Europe as customers seek alternative routes,” the airline said.
But jet fuel is still a paramount issue and on Tuesday, Lufthansa Group, the German airline, said it would cut 20,000 flights over the next six months to save jet fuel as the pressure builds on companies to address surging prices and declining supplies of energy caused by the war in Iran.
Europe is the largest consumer of jet fuel shipped through the Strait. Those shipments account for about 41 percent of the region’s jet fuel imports. Global prices of jet fuel have risen more than 70 percent since the start of the war, according to the Platts Jet Fuel Price Index.
Last week, Fatih Birol, the head of the International Energy Agency, said that Europe had about six weeks of jet fuel supplies remaining.
Ryanair, the giant low-cost European airline, said last week that its suppliers could guarantee it enough jet fuel only through most of May.
—United Airlines posted better-than-expected first-quarter results but lowered full-year guidance as the air carrier braces for rising fuel costs brought on by the war with Iran.
The carrier reported Q1 earnings of $1.19 a share, compared with 91 cents a year ago. Revenue grew 11% to $14.61 billion. Wall Street had expected a first-quarter profit of $1.08 a share with sales totaling $14.39 billion.
United said that the average fuel cost in the first quarter was $2.78 per gallon and that it experienced a $340 million increase in fuel expenses compared with the first quarter of 2025.
With United already developing a plan to curb flights, the air carrier said it has begun adjusting its schedule for the rest of 2026 to account for higher fuel prices.
As a result, United expects capacity in the third and fourth quarters to be flat to up approximately 2% year over year. By contrast, capacity increased 3.4% in the first quarter from a year ago.
For the second quarter, United forecasts adjusted earnings between $1 and $2 a share. For the full year, United changed its profit guidance range of $7-$11 a share, compared with tis previous earnings guidance of $12 to $14 a share.
Wall Street had been looking for earnings of $2.15 a share in Q2.
United’s guidance assumes revenue recovers 40% to 50% of the fuel price increases in the second quarter, 70% to 80% of the fuel price increases in the third quarter and 85% to 100% of the fuel price increases in the fourth quarter of 2026.
As in UAL will be bumping up fares 15% to 20% this summer.
The carrier added that if jet fuel prices remain on a downward trend, it expects to be in the upper half of the earnings ranges, for both the second quarter and the full year. However, if fuel prices “re-escalate,” United predicts profit will be in the lower half of its range.
Earlier, Alaska Airlines suspended its full-year guidance and posted a wider-than-expected first-quarter loss late Monday, also due to rising fuel expenses.
Delta also decided against issuing a full-year forecast with its earnings earlier this month.
As for United CEO’s Scott Kirby’s pitch to President Trump of a merger with American Airlines, Trump said in an interview Tuesday, “I don’t like having them merge.”
—Southwest Airlines reported a first-quarter profit of $227 million, or $0.45 per share, compared with a loss of $0.26 per share a year earlier. Operating revenue rose 12.8% to $7.25 billion, a first-quarter record for the Dallas-based carrier.
The Q2 adjusted earnings outlook Southwest put forward – a range of $0.35 to $0.65 per share – fell short of the $0.55 consensus estimate. The full-year adjusted earnings target of $4.00 per share was left unchanged, though Southwest cautioned that hitting that figure hinges on a combination of easing fuel costs and continued outperformance on the revenue side.
Fuel costs are the central pressure point. Southwest paid $2.73 per gallon in the first quarter, above its prior guidance of about $2.40 – a $164 million increase that represented roughly a $0.22 headwind to earnings per share.
CEO Bob Jordan, speaking with reporters after the earnings release, struck an upbeat tone on bookings. “Demand is really strong…strong in every sector,” he said.
—American Airlines first quarter earnings topped expectations, but it sees big fuel charges looming as the conflict in the Middle East continues.
American, a la United and Southwest, said its fuel charges rose 10% in the quarter and that it expects fuel costs to jump by $4 billion for the year.
American said based on the forward fuel curve and the current revenue outlook, the midpoint of the company’s full-year earnings adjusted EPS guidance is essentially flat, within a range of ($0.40) to $1.10.
For Q1, American reported revenue of $13.92 billion vs. $13.85bn expected, up 10% from a year ago. American posted an adjusted loss per share of $0.40 vs. $0.46, narrower than analysts’ forecast, translating to an adjusted net loss of $267 million, a decrease of 31% compared to last year.
—TSA checkpoint numbers vs. 2025
4/23…117 percent of 2025 levels
4/22…102
4/21…74
4/20…99
4/19…130
4/18…78
4/17…96
4/16…116
—Tesla reported better revenue and earnings in the first quarter – and surprised Wall Street with positive free cash – when compared with last year’s period.
The company reported $22.4 billion in revenue for the first quarter, up 16% from the first quarter of last year. Revenue from its automotive business, increased 16% from the year prior, and the company said the recent run-up in gasoline prices has helped sales slightly.
Energy business revenue, which comes from selling industrial and residential battery storage, was previously a bright spot for the company, but it fell 12% in the first quarter. Even so, Tesla’s net income grew 17%. And despite analysts’ consensus that the company could have negative free cash flow for the first time in two years, Tesla reported positive free cash flow of $1.4 billion.
CFO Vaibhav Taneja said Tesla will have negative free cash flow for the rest of the year as it prepares to spend $25 billion on capital expenditures in 2026.
“We believe this is the right strategy to position the company for the next era,” Taneja said.
While first-quarter results showed a rebound over last year, they marked a steady decline in revenue and earnings since the third-quarter peak last year when Tesla’s sales were spurred by an expiring federal tax credit of $7,500 per vehicle.
The company spent $2.5 billion on capital expenditures in the quarter as it expanded its capacity for artificial intelligence computing and worked on new production lines including for the Cybercab robotaxi.
In a slide deck presented to investors, the company showed off a large plot of land near its Giga Texas factory where it is preparing for construction on a new facility it says will house the production line for the second generation of Optimus humanoid robots.
The facility is designed to manufacture 10 million robots a year.
Tesla sold 358,023 EVs globally in the first quarter, which was up 6.3% from the year before. Despite the growth from last year, it was Tesla’s second-worst sales quarter since 2022.
Tesla is expanding its Robotaxi ride-hailing service. On Saturday, the company said it started offering fully autonomous rides in small areas of Dallas and Houston, Texas, in addition to Austin, where it started offering a small number of fully autonomous rides in January. The company also has a ride-hailing service in California with safety drivers behind the wheel.
The company is preparing to expand the service to other major cities, including Phoenix, Miami and Las Vegas.
The shares were initially up in after-market trading Wednesday, but fell after CEO Elon Musk’s call with investors and analysts ended.
Musk said he expected capital expenses would rise “substantially in the future.”
“We’re going to be substantially increasing our expenses in the future, so you should expect to see a significant increase in capital expenditures,” Musk said on the call. Spending was “well justified for a substantially increased future revenue stream,” noting big capex plans at top tech companies.
CFO Taneja boosted the company’s capex forecast to $25 billion from $9 billion in 2025. In January, the company said it would spend more than $20 billion in 2026.
Musk also said the company plans to use Intel’s advanced 14A manufacturing process to make chips at its Terafab project, with SpaceX and Tesla to make processors to fuel the billionaire’s robotics and data center ambitions.
Intel shares got a boost.
—Blue Origin’s newest rocket was grounded after the Federal Aviation Administration ordered an investigation into a “mishap” involving the failed launch of a satellite over the weekend.
The company, founded by Jeff Bezos, attempted to place a satellite from AST SpaceMobile using its New Glenn rocket but was unable to get it as far into orbit as intended.
Blue Origin’s chief executive Dave Limp said the failure was caused by a lack of “sufficient thrust” in an engine.
AST share price fell by more than 6% on Monday. Limp said: “We clearly didn’t deliver the mission our customer wanted, and our team expects.”
—Boeing reported a much smaller first-quarter loss than analysts expected, a sign of continued operational recovery at the planemaker after the pandemic and years of crises that dented its reputation and left it with a mountain of debt.
The company posted a $7 million net loss for the quarter, smaller than a $31 million loss during the same period 12 months ago. The core loss per share of 20 cents was far lower than the 83 cents per share average loss expected by analysts.
“We’re off to a good start and continue building on our momentum with stronger performance across our business,” Boeing CEO Kelly Ortberg said in a memo to employees after the results were released.
“Worker together, we’re making strides to strengthen our culture and restore trust with our customers while growing our record backlog to nearly $700 billion,” he said.
Boeing burned through $1.5 billion of cash in the quarter, due in large part to significant spending to expand capabilities for 787 production in South Carolina and military jet production in the St. Louis area, as well as opening a 737 MAX production line in Everett, Washington.
The company produces around 42 of its best-selling single-aisle jets a month and expects an increase to 47 a month by the end of the year.
Ongoing efforts to certify the 737-7 and -10, the smallest and largest MAX variants, respectively, and the 777X also contributed to the cash burn.
The company began test-flying a new anti-icing system for the 737 MAX engine, a major impediment to certification, industry publication the Air Current reported on Tuesday.
Boeing expects U.S. regulators to certify the MAX 7 and 10 this year, followed by first deliveries in 2027.
Revenue at Boeing’s commercial jet divisions rose 13% to $9.2 billion, buoyed by its highest first-quarter deliveries since 2019. However, it still lost $563 million in the quarter.
Its defense and space division’s earnings rose 50% to $233 million in the first quarter, during which the Space Launch System rocket, a joint venture with Northrop Grumman, successfully launched NASA’s Artemis II mission around the moon.
—GE Aerospace posted higher first-quarter revenue on surging orders amid strong air travel and military demand.
The company reported net income from continuing operations of $1.93 billion, or $1.83 a share, compared with $1.97 billion, or $1.83 a share, the year prior.
Adjusted earnings of $1.86 a share exceeded the Street’s $1.69 a share.
Revenue rose 25% to $12.39 billion. Orders increased 87% to $23 billion. Commercial engines and services adjusted revenue was up 34%.
The company maintained its prior guidance, but said that it was trending toward the high end of its range. It expects fiscal-year adjusted earnings of $7.10 to $7.40 a share. Analysts see $7.49 a share.
GE CEO Larry Culp said in January that robust air travel demand is providing strong tailwinds for the company’s commercial business. Since then, plane fuel costs have surged due to the war in the Middle East, leading airlines to raise prices and reduce capacity.
But the airlines are saying demand remains strong from consumers across all geographies for both business and leisure travel.
Meanwhile, the war in Iran as well as other geopolitical conflicts continue to increase demand for military technology.
—Intel shares soared over 20% Friday after the company issued second-quarter revenue guidance above Wall Street expectations, underscoring booming demand for the company’s server processors used for AI in data centers.
The company expects revenue of between $13.8 billion and $14.8 billion, compared with an estimate of $13.07bn. Intel’s second-quarter adjusted per-share profit guidance of 20 cents handily beat expectations of 9 cents a share.
First-quarter revenue came in at $13.58 billion, beating estimates of $12.42 billion.
Revenue in the company’s data center and AI segment came in at $5.1 billion, compared with estimates of $4.41bn.
After years of management blunders left the former icon of chipmaking without a meaningful foothold in the booming artificial intelligence industry, CEO Lip-Bu Tan put a revival plan in place to shore up Intel’s balance sheet through asset sales and layoffs.
Tan also secured large investments and struck deals with the U.S. government, SoftBank and Nvidia, giving Intel much-needed fuel to put into its manufacturing operations and inspire strong investor confidence in the firm’s longer-term growth.
While Intel missed out on the early years of the AI boom, a new opportunity in the form of advanced central processing units (CPUs) has emerged as cloud providers shift from training models to deploying them.
And as noted above, Intel landed a win for its manufacturing business in securing Tesla as its first major customer for the next-generation 14A process to make chips at its Terafab project in Austin.
—IBM’s revenue growth slowed in the first quarter on sluggishness in its software business, fanning fears of disruption from artificial intelligence tools and sending its shares down 6% after hours on Wednesday.
Concerns that AI tools will eat into the software business have grown with the launch of AI tools that can automate routine corporate functions.
IBM has especially been hit after Anthropic said in February one of its tools could help modernize COBOL, a language widely used on IBM mainframes.
Big Blue’s revenue increased 9% in the first quarter to $15.92 billion, slower than the 12.2% growth in the previous quarter, even as it surpassed analysts’ average estimate of $15.62bn.
IBM’s software segment anchored by its high-margin hybrid cloud unit Red Hat, and a suite of AI tools under the Watsonx brand, also posted slower revenue growth of 11.3%.
Growth in the company’s infrastructure segment remained strong, helped by continued adoption of its latest mainframe systems. Revenue in the segment, which includes mainframe computers, grew 15.2% to $3.33 billion in the quarter.
For the first quarter, IBM’s adjusted profit came in at $1.91 per share, compared with estimates of $1.81 apiece.
–According to reports, Meta’s first wave of sweeping layoffs planned for this year is coming on May 20.
The Facebook and Instagram owner will lay off about 10% of its global workforce, or close to 8,000 employees, in the initial round.
The company is planning further layoffs in the second half of the year, according to the reporting, citing sources, but details were not yet settled. Executives may adjust their plans as they observe developments in artificial intelligence capabilities, the sources added.
CEO Mark Zuckerberg is pumping hundreds of billions of dollars into AI as he seeks to dramatically reshape his company’s inner workings around the technology, reflecting a broader pattern among major U.S. companies this year, particularly in the tech sector.
Amazon.com has similarly trimmed 30,000 corporate employees in recent months, representing nearly 10% of its white-collar workers, while in February the fintech company Block chopped nearly half of its staff.
And Microsoft issued a memo this week offering voluntary buyouts to thousands of its U.S. employees. About 7% of the U.S. workforce will be eligible for the buyouts, according to reports. The company has never previously done buyouts of this scale.
Microsoft had 125,000 employees in the U.S. as of June 2025. That would mean about 8,700 workers are eligible for the program.
—UnitedHealth on Tuesday raised its annual profit forecast and beat Wall Street expectations for the first quarter as the healthcare conglomerate kept costs in check and received improved government payments for its health insurance business.
The shares rose 7% on the news.
The company now expects 2026 adjusted profit per share to be greater than $18.25, an increase of 50 cents from its prior forecast, with analysts at $17.86 per share for the year.
Adjusted earnings of $7.23 per share in the first quarter compared with the Street’s $6.57 per share.
In January, the healthcare giant said 2026 revenue would decline for the first time in decades, in a blow to CEO Stephen Hemsley’s efforts to rebuild investor confidence after a difficult period for UnitedHealth that included the killing of a top executive, an unexpected surge in medical costs, a federal probe and Americans’ anger at insurance industry practices.
The industry has been grappling with increased costs since mid-2023 due to a surge in demand for healthcare services under government-backed Medicare plans for older adults or individuals with disabilities.
Changes in enrollment for Medicaid plans for lower-income Americans have also left insurers with those who require more medical care, adding to costs for insurers.
UNH reported a first-quarter medical cost ratio – the percentage of premiums spent on medical care – of 83.9%, compared with analysts’ estimates of 85.7%.
—Nike told its employees worldwide that it is cutting more jobs as part of the final stretch of its Win Now action plan.
The changes will result in the reduction of about 1,400 roles in global operations, the majority of which are in technology, the company said.
—Warner Bros. Discovery said on Thursday that its investors had voted to combine with Paramount, another step toward a deal that has been met with significant opposition in Hollywood.
Foreign Affairs
Russia/Ukraine: At least six people were killed and more than a dozen hurt in a mass shooting in Kyiv last weekend, with Ukrainian authorities killing the suspect – who had barricaded himself inside a supermarket. Fourteen people were injured.
“He took hostages and, tragically, killed one of them. He shot dead four more people right on the street, and one more woman passed away in a hospital due to sustained injuries,” President Zelensky wrote on X.
Special forces stormed the store and killed the shooter, who was identified as a Russian living in the contested Donetsk region of Ukraine. He was previously convicted of crimes, Zelensky announced.
Before the attack, the suspect set fire to an apartment, he reported.
—Tuesday, Moscow’s top general said that Russian forces have taken 1,700 square km (656 square miles) of territory in Ukraine this year and are advancing on its so-called fortress belt in Donbas.
Kyiv has also reported some gains, Ukrainian commander Oleksandr Syrskyi said in mid-April that Kyiv’s forces had regained control of nearly 50 square km of its territory in March.
But Valery Gersimov, Chief of the General Staff of the Russian Armed Forces, said in footage released by the Defense Ministry on Tuesday, “Since the beginning of this year, a total of 80 settlements and more than 1,700 square kilometers of territory have come under our control.”
A spokesman for Ukraine’s General Staff said he would not comment on the claim. Pro-Ukrainian maps indicate Russia has taken around 600 square km this year.
Gerasimov said Russia’s Southern Grouping of forces was attacking the Donetsk fortress belt comprising the cities of Sloviansk, Kramatorsk and Kostiantynivka, and that Russian forces were about 7 to 12 km (4.3 to 7.5 miles) from Sloviansk and Kramatorsk.
Kyiv’s military said on Tuesday that its forces had stopped two Russian attempts to advance around villages near Sloviansk over the past 24 hours, and that Moscow had carried out 19 attacks near Kostiantynivka and eight nearby villages.
According to Russian estimates, Russia controls about 90% of Donbas, about 75% of the Zaporizhzhia and Kherson regions, and slivers of the Kharkiv, Sumy, Mykolaiv and Dnipropetrovsk regions in Ukraine.
Pro-Ukrainian maps show Russia controls 19.35% of Ukraine, but that Russia’s advance has slowed this year.
—Ukraine is poised to receive a European Union lifeline of more than $100 billion after Hungary dropped its veto on financing vital for Kyiv to sustain its fight against Russia.
EU ambassadors agreed to a 90-billion-euro two-year loan on Wednesday, which was then formalized on Thursday. The move came after Ukraine said it had fixed a damaged oil pipeline that was at the center of a monthslong standoff with Hungary’s departing prime minister, Viktor Orban.
Earlier, President Zelensky condemned a U.S. decision to extend the period during which Russia is allowed to sell oil despite Western sanctions.
The move means countries can purchase Russian oil and petroleum products already loaded on vessels at sea until May 16.
The U.S. argues that the waiver is meant to ease the energy supply crunch sparked by the U.S.-Israel war with Iran.
But in his remarks on Sunday, Zelensky said “every dollar paid for Russian oil is money for the war” in Ukraine.
Zelensky said Russia had more than 110 tankers from its “shadow fleet” – vessels with obscured ownership designed to help it bypass sanctions – with “over 12 million tons” of oil.
Their sale, he added, would bring $10 billion to Moscow’s coffers as “a resource that is directly converted into new strikes against Ukraine.”
The Ukrainian leader did not explain what those figures were based on.
But he added that just over the past week, Russia has launched “over 2,360 attack drones, more than 1,320 guided aerial bombs, and nearly 60 missiles of various types at our cities and communities.”
That included the deadliest attack against Ukraine in months on April 15 during which more than 700 drones and missiles were used in multiple waves in one night, killing at least 18 people.
—Pope Leo XIV, posting on X, Sunday, April 19:
“I am deeply saddened by the recent escalation of attacks against Ukraine, which continue to afflict civilians. I express my solidarity with those who are suffering and assure all the Ukrainian people of my prayers. I renew my appeal for weapons to fall silent and for the path of dialogue to be pursued.”
–Lastly, the veteran leader of Russia’s Communist Party, Gennady Zyuganov, 81, issued a warning to parliament that the country’s faltering economy risks stoking a 1917-style revolution and that the government needs to take urgent measures to correct its course.
Zyuganov issued his warning to a plenary session of the State Duma, the lower house of parliament, ahead of a parliamentary election due in September, according to a recording of his speech posted on the Duma’s website.
“We’re doing everything we can to support Putin and his strategy and policies, but you (the government) are not listening,” he said, in comments made on Tuesday. They drew some applause and were carefully listened to by Vyacheslav Volodin, the Duma speaker, and a close Putin ally.
“If you (the government) do not urgently adopt financial, economic and other measures, by autumn a repeat of what happened in 1917 awaits us. We don’t have the right to repeat that. Let’s take some decisions.”
Despite his warning, there is currently no sign of serious social unrest in Russia, amid tight wartime censorship, protest bans, long jail sentences for dissidents and the growth in influence of the Federal Security Service, the main successor agency to the Soviet-era KGB. [Reuters]
China: Last Friday night, President Trump said he was looking forward to his meeting with Chinese President Xi Jinping next month and predicted it would be “special.”
Hours after Iran declared the Strait of Hormuz had reopened, Trump posted on Truth Social:
“China’s President Xi is very happy that Strait of Hormuz is open and/or rapidly opening; I look forward to meeting Xi… Our meeting in China will be a special one and, potentially, Historic. I look forward to being with President Xi – Much will be accomplished!”
President Trump is naïve…the little summit is going to be all about Taiwan, Xi pressing him hard to stop sending arms to Taipei, while warning the president that the U.S. military needs to stay away…Taiwan is Beijing’s.
Separately, the White House on Thursday accused China of stealing U.S. artificial intelligence labs’ intellectual property on an industrial scale in a memo that threatens to strain relations ahead of the summit.
“The U.S. government has information indicating that foreign entities, principally based in China, are engaged in deliberate, industrial-scale campaigns to distill U.S. frontier AI systems,” Michael Kratsios, director of the White House Office of Science and Technology Policy, wrote in a memo shared on social media.
“Leveraging tens of thousands of proxy accounts to evade detection and using jailbreaking techniques to expose proprietary information, these coordinated campaigns systematically extract capabilities from American AI models, exploiting American expertise and innovation,” he added.
The Chinese Embassy in Washington said it opposes “the baseless allegations,” adding that Beijing “attaches great importance to the protection of intellectual property rights.”
You can stop laughing.
North Korea: North Korea launched multiple short-range ballistic missiles toward the sea on Sunday, its neighbors said, days after a warning from the International Atomic Energy Agency.
In an emergency meeting of the National Security Council, senior South Korea officials expressed concerns about North Korea’s repeated ballistic missile tests and urged it to stop them immediately. Sunday’s launches came hours before South Korean President Lee Jae Myung left the country to visit India and Vietnam.
North Korea had launched multiple short-range ballistic missiles back on April 8 as well.
Timothy W. Martin / Wall Street Journal
“With Iran’s uranium enrichment firmly in President Trump’s crosshairs, North Korea is quickly advancing its ability to expand its nuclear arsenal, upping activity at its main nuclear site, including work on a suspected new enrichment site.
“Pyongyang’s recent advances drew a stern warning from Rafael Grossi, the United Nations’ atomic chief. He noted the swift uptick in activity at North Korea’s central Yongbyon nuclear complex, including at a 5-megawatt reactor, a reprocessing unit and a light-water reactor.
“ ‘All of them point to a very serious increase in the capabilities,’ Grossi, head of the UN’s Internation Atomic Energy Agency, told reporters during a visit to Seoul.
“North Korea also appears to have completed construction of a suspected uranium enrichment plant at Yongbyon, according to new satellite imagery analysis by the Center for Strategic and International Studies, a Washington, D.C.-based think tank. The existence of the facility has previously been flagged by the IAEA and South Korean officials.
“Internal construction appears ongoing, according to CSIS, and once finished, the extra capacity would ‘significantly increase’ the number of nuclear weapons available to North Korea.
“North Korean leader Kim Jong Un has emerged confident and defiant in recent years as his nuclear arsenal has expanded. Last month, Kim boasted of how North Korea’s ability to resist outside pressure and fend off any enemy attacks was at a higher level than other regions of the world – and expressed no regret over the breakdown in nuclear disarmament talks with Trump more than seven years ago.
“ ‘The present situation clearly proves,’ Kim said, ‘how just the strategic option and decision of our state were in rejecting the enemy’s cajolery and perpetuating our nuclear possession.’….
“Pyongyang is now estimated to possess up to 50 nuclear warheads and enough fissile material to produce up to 40 more, according to the Stockholm International Peace Research Institute, a think tank.
“The war in Iran, plus Washington’s stated goal of halting Tehran’s nuclear program, have bolstered Kim’s view that such weapons are critical for the survival of his regime. In recent months, the U.S. has targeted nonnuclear states such as Venezuela and Cuba. American and Israeli strikes have killed many of Iran’s top leadership and pummeled the country.
“In contrast, Trump has repeatedly affirmed his good ties with Kim and says he hopes to meet the North Korean leader again.
“But the Iranian conflict could harden Kim’s longstanding rejection of any U.S. overtures to engage in disarmament talks. Some U.S. analysts and political leaders point to North Korea in arguing that the U.S. must stop Iran before it develops nuclear weapons.”
Random Musings
–Presidential approval ratings….
Rasmussen: 44% approve of President Trump’s job performance, 54% disapprove (Apr. 24).
A new Reuters/Ipsos poll gives Trump a 36% approval rating, 62% disapproval, holding at the lowest of his term as in recent days many Americans question his temperament amid the Iran war and the feud with Pope Leo.
Some 51% of Americans – including 14% of Republicans, 54% of independents and 85% of Democrats – said Trump’s mental sharpness has gotten “worse” over the past year.
A new NBC News Decision Desk survey has Trump’s approval rating at 37% (63% disapprove), a new low for this survey amidst growing concerns about rising costs and the war.
In the new poll, 83% of Republicans gave Trump a positive approval rating, down 4 points from earlier this year. And the share of Republicans who strongly approve of Trump’s job performance has dropped 6 points, from 58% to 52%.
And broadly, one-third of Americans believe the country is on the right track while two-thirds believe it is on the wrong track – the most pessimistic outlook in Decision Desk polling since Trump retook office last year.
An Associated Press-NORC Center for Public Affairs Research poll had Trump’s approval rating on the economy dropping to 30% in April from 38% in March. A similarly low share of U.S. adults, 32%, approve of the president’s leadership on Iran, unchanged since last month.
Only 33% approve of Trump’s overall job performance, down from 38% last month.
—Rep. Sheila Cherfilus-McCormick, a Florida Democrat charged with stealing $5 million in federal disaster funds for her campaign, announced on Tuesday that she would resign.
Ms. Cherfilus-McCormick was indicted in November on charges of stealing Federal Emergency Management Agency money and funneling some of it to her 2021 congressional campaign. The case could carry a prison term of up to 53 years. She has denied any wrongdoing.
The House Ethics Committee has been investigating the congresswoman for years and on Tuesday had been preparing to move toward expelling her. She resigned about 20 minutes before the panel was to vote.
And then U.S. Rep. David Scott, a Georgia Democrat seeking his 13th term in Congress despite challenges from within his party, died Wednesday. He was 80. Scott had voted just the day before.
So, the Democrats lost two seats temporarily.
Meanwhile, Republican Rep. Cory Mills of Florida is battling to avoid expulsion a la Cherfilus-McCormick. He has vowed to fight to save his seat, but it doesn’t look good, as he faces allegations of sexual misconduct and campaign finance violations.
And my own congressman, Republican Tom Kean Jr., has been mysteriously missing from Capitol Hill for nearly two months – and his team is blaming unspecified “health issues.”
Kean was extremely vulnerable come November as it is, but he last voted on March 5.
On Wednesday, Kean posted on social media about how two of his bills advanced past committee, yet he wasn’t actually on Capitol Hill that day for votes.
Fellow New Jersey House members say they haven’t heard from the 57-year-old.
The House is currently at 217 Republicans, 212 Democrats and the independent, Rep. Kevin Kiley (Calif.) who caucuses with the GOP. Five seats are vacant, four of which became open in the past 10 days.
—Virginia voters approved a mid-decade redistricting plan Tuesday that could boost Democrats’ chances of winning four additional U.S. House seats in November’s midterm elections that could prove decisive in deciding control of the Congress.
The constitutional amendment backed by voters (51.5% to 48.5%) bypasses a bipartisan redistricting commission to allow the use of new districts drawn by Virginia’s Democratic-led General Assembly.
But the state Supreme Court is considering whether the plan is illegal in a case that could make the referendum results meaningless.
President Trump claimed, without evidence, that the vote to redraw the congressional map had been “rigged,” and blamed mail-in ballots for the outcome…a stark preview of his behavior come November.
A county judge moved to block the measure, ruling lawmakers had not followed the rules for the constitutional amendment that the map redrawing required.
—A Cook Political Report poll found Democrats holding a 6-point advantage in a survey of the 36 House districts most likely to determine which party wins a majority in the lower chamber. That was up from a steady 3-to-5-point lead for Democrats in a generic ballot.
—Navy Secretary John Phelan was fired on Wednesday after months of infighting with senior Pentagon leaders and disagreements over how to revive the Navy’s struggling shipbuilding program.
Phelan is leaving the Pentagon and the Trump administration effective immediately, wrote Sean Parnell, the Pentagon’s chief spokesman, in a terse statement.
In his role leading the Navy, Phelan had championed the “Golden Fleet,” a major investment in new ships including a “Trump-class” battleship. But Phelan’s leadership was marred by feuds with senior leaders in the Pentagon, including Defense Secretary Pete Hegseth and Deputy Defense Secretary Stephen Feinberg, Pentagon and congressional officials said.
Hegseth has also butted heads with Army Secretary Daniel P. Driscoll over promotions and a host of other issues. Hegseth fired the Army’s chief of staff, Gen. Randy George, earlier this month.
The Navy secretary has no role overseeing deployed forces, and Phelan’s firing is not likely to have significant implications for the conduct of the Iran war or U.S. Navy operations to blockade Iranian ports or open the Strait of Hormuz. As the Navy’s top civilian leader, his main responsibility is to oversee the building of the future naval and Marine Corps force.
But aside from a negative impact on moral, the internal chaos could make it harder for the Navy to replenish its stock of Tomahawk missiles and high-end air defense systems, which have been in heavy use in Iran.
—Labor Secretary Lori Chavez-DeRemer is leaving amid misconduct allegations.
Chave-DeRemer faced multiple allegations of abusing the power of her position, including having an affair with a subordinate and drinking alcohol on the job.
She is the third Trump Cabinet member to leave her post after Trump fired his embattled Homeland Security Secretary Kristi Noem in March and ousted Attorney General Pam Bondi earlier this month.
—The Senate took the first steps in a new effort to reopen the Department of Homeland Security early Thursday, voting to adopt a budget plan that would fund ICE and Border Patrol over Democratic objections and sending it to the House.
The entire department has been shut down since mid-February as Democrats have demanded policy changes in the wake of fatal shooting of two protesters by federal agents. Republicans are now trying to fund the two agencies through the complicated, time-consuming process called budget reconciliation, a maneuver that they also used to pass President Donald Trump’s package of tax and spending cuts last year with no Democratic votes.
The budget process only requires a simple majority in the Senate, bypassing filibuster rules that require Republicans to find 60 votes on most bills when they only hold 53 seats.
House Speaker Mike Johnson was noncommittal on taking up the bill.
—New Jersey Gov. Mikie Sherrill hit the 100 days in office milestone and a Rutgers-Eagleton poll showed that 44% of residents had a favorable impression of Sherrill, while 29% had an unfavorable one. A quarter (24%) still have no opinion on her, and 3% say they don’t know who she is.
Actually, had I been polled, I would have said I have no opinion.
–Over days and nearly 20 hours of testimony, under harsh questioning from Democrats, and some Republicans, Health Secretary Robert F. Kennedy Jr. repeatedly backed away from his longstanding criticism of the measles, mumps and rubella vaccine. On Wednesday, he made his strongest statement yet – albeit on behalf of his department and not himself.
“We promote the M.M.R.,” Kennedy told the Senate Finance Committee on Wednesday morning. “We have advised every child to the M.M.R. That’s what we do.”
The comment stands in stark contrast to RFK Jr.’s past advice, and senators wondered aloud why he hasn’t told the public what he said on Capitol Hill this week. Last week, he conceded the measles vaccine is “safe and effective” for most people.
When measles broke out in Texas last year, Kennedy did not recommend vaccinations; he said it should be “a personal choice.” Last year, asked if he would advise parents to vaccinate newborns, he said it was not up to him to provide medical advice. His advice, he said, was: “Do your own research.”
—Two U.S. Embassy officials that were killed in a car crash in Mexico following a daring raid on a secret drug lab were working for the CIA at the time, according to security officials.
The pair, who haven’t been named, were killed along with two Mexican officials when their car plunged 600 feet off a cliff and burst into flames early on Sunday morning, the Washington Post reported, citing sources familiar with the incident.
Their vehicle was part of a convoy of six navigating the narrow mountainous roads in northern Mexico’s Chihuahua state as they returned from an operation to shut down a clandestine drug laboratory.
It skidded off the road and plunged down a ravine before exploding, according to Mexican officials.
The two CIA officials were working alongside Mexican authorities as part of the agency’s expanded and more aggressive role in counternarcotics under President Trump.
They supervised but did not participate directly in the Mexican raid on the lab, described as “perhaps one of the largest ever located” by Chihuahua’s attorney general.
The CIA has been sharing more intelligence with Mexican anti-drug units and increased training for local forces, according to officials.
—Federal authorities on Thursday charged a Special Forces soldier involved in the capture of Venezuelan president Nicolas Maduro with using inside information about the raid to win roughly $400,000 through bets placed on online prediction markets.
Prosecutors accused Gannon Ken Van Dyke, an active-duty U.S. Army soldier involved in the planning and execution of the operation, of using his access to classified information to place a series of wagers on Maduro’s future and whether U.S. forces would enter Venezuela through Polymarket, one of a number of sites offering users the opportunity to place bets on real world events.
–Last week I wrote about Typhoon Sinlaku and how there were no casualties on the island of Saipan, despite extensive damage, but then the U.S. Coast Guard said it was searching for six people after losing contact with their disabled boat off the coast of Guam.
The crew of the 145-foot dry cargo vessel notified the Coast Guard on April 15 that the boat had lost its starboard engine and needed assistance, the Coast Guard announced last Saturday.
But the Coast Guard lost contact the afternoon of April 16. A Coast Guard HC-130 Hercules aircraft was launched to search for the six people on board, but it had to return to Guam because of heavy winds.
Debris was then spotted, and a partially submerged life raft that was partly inflated was seen 95 nautical miles from the vessel. No sign of the six.
—Wildfires in Georgia and Florida have consumed tens of thousands of acres, destroyed at least 90 homes, and led to unhealthy air quality in much of the area.
Now we await the forecasted Super El Nino this summer and what impacts that will have on the nation’s weather, though the good news is we should see fewer hurricanes.
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Pray for the men and women of our armed forces…and all the fallen.
Slava Ukraini.
God bless America.
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Gold $4716…Silver $76.00
Oil $95.05
Bitcoin: $77,650 [4:00 PM ET, Friday]
Regular Gas: $4.05; Diesel: $5.46 [$3.17 – $3.56 yr. ago]
Returns for the week 4/13-4/17
Dow Jones -0.4% [49230]
S&P 500 +0.6% [7165]
S&P MidCap -0.1%
Russell 2000 +0.4%
Nasdaq +1.5% [24836]
Returns for the period 1/1/26-4/24/26
Dow Jones +2.4%
S&P 500 +4.7%
S&P MidCap +10.2%
Russell 2000 +12.3%
Nasdaq +6.9%
Hang in there.
Brian Trumbore
