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Edition 1,410
Rafael Grossi, director general of the UN’s International Atomic Energy Agency, stressed this week the importance of ensuring Iran loses its supply of highly enriched uranium in an interview with the Associated Press. Grossi was the one who last year said Iran’s stockpile could allow it to build up to 10 nuclear bombs.
Grossi told the AP on Tuesday that the IAEA has obtained satellite images of Isfahan, which show the outcome of this year’s U.S.-Israeli strikes on Iran’s largest atomic research center.
While Grossi said this information-gathering process is still ongoing, he said the agency believes a large amount of the country’s enriched uranium supply remains stored at the nuclear facility.
“We haven’t been able to inspect or to reject that the material is there and that the seals – the IAEA seals – remain there,” he said. “I hope we’ll be able to do that, so what I tell you is our best estimate.”
For weeks, I’ve been calling on the president to work with Grossi as he is an asset in selling the importance of securing the enriched uranium, supposedly the main point of the conflict.
A new Washington Post/ABC News/Ipsos poll released today shows that the war in Iran is as unpopular among Americans as the Iraq War during the year of peak violence in 2006 and the Vietnam War in the early 1970s.
Sixty-one percent of Americans say that using military force against Iran was a mistake, with fewer than 2 in 10 Americans believing that the U.S. actions in Iran have been successful. About 4 in 10 say it has been unsuccessful, while another 4 in 10 says it is “too soon to tell.” The polling numbers indicate a broadly unpopular war effort and growing economic fallout at a time when the White House has been trying to convince Americans that they are better off under Trump than under Democrats.
But support for the war among self-identified Republicans remains high: 79 percent say it was the right decision. Independents who lean toward the Republican Party are roughly split, with 52 percent saying it was the right decision and 46 percent saying it was a mistake.
The administration wasn’t helped this week by Defense Secretary Hegseth’s testimony to House and Senate committees, when he in some instances said that the war was necessary because Iran “hadn’t given up their nuclear ambitions.”
“Ambitions” vs. the ‘imminent threat’ we have been told. Quite a difference.
Tale of the Tape….
Oil / West Texas Intermediate (WTI)
Friday, Feb. 27…$67.30
Friday, May 1…$102.20
The global benchmark for crude, Brent, is $108.50
Nationwide average prices at the Gas Pump [Source: AAA]
Friday, Feb. 27…regular gas $2.98…diesel $3.75
Friday, May 1…regular gas $4.39…diesel $5.57
‘Regular’ is up 34 cents from last Friday. The price at the pump down the street rose from $4.19 to $4.59 over the same period.
As it went down, day by day….
The Wall Street Journal had an extensive piece on the leadership divisions inside Iran.
“Hard-line leaders in Iran are increasingly putting pressure on its representatives not to compromise. They have taken to the domestic press and social media to blast Iran’s top negotiators – parliamentary speaker Mohammad Bagher Ghalibaf and [foreign minister] Araghchi – for engaging in discussions about Iran’s nuclear program in the first round of talks.
“Mahmoud Nabavian, an ultraconservative lawmaker who was part of the Iranian delegation in Pakistan, openly attacked the way Ghalibaf led the talks.
“ ‘In the Pakistan negotiations, we made a strategic mistake,’ he told the Student News Network, an official news agency aligned with the hard-liners. ‘We should not have put the nuclear issue up for negotiation. By doing so, the enemy became bolder.’
“Ahmad Vahidi, who leads the Revolutionary Guard, also has been opposed to compromising too much, people familiar with the matter said.
“Differences within the Iranian government over how much to concede appear to be making it difficult for Iran to negotiate, analysts said….
“Raz Zimmt (sic), director of the Iran research program at Israel’s Institute for National Security Studies, said the highly unpopular regime risks looking vulnerable at home if it lets the perception of divisions persist.
“ ‘The divergences are exacerbated by the absence of a strong, present supreme leader to take the risk of tough decisions and bring factions into line,’ he said.
“Mojtaba Khamenei hasn’t been seen or heard since he took the job after his father was killed at the beginning of the war. There is broad consensus among U.S. and Israeli officials and mediators in the talks that he is secluded, possibly injured, and unable to communicate freely.”
Tehran held firm in its claim that Foreign Minister Abbas Araghchi would not meet with U.S. negotiators for a second round of talks during his Saturday visit to Islamabad – throwing into question the future of the negotiations.
Abbas and the Iranian delegation left for the airport shortly before 6 p.m. local time after holding meetings with primary Pakistani mediators Field Marshal Asim Munir and Prime Minister Shehbaz Sharif.
White House Press Secretary Karoline Leavitt claimed on Friday that Special Envoy Steve Witkoff and Jared Kushner would leave the U.S. for “direct talks” with Tehran in Pakistan on Saturday.
Tehran has consistently said it would only be attending bilateral meetings with the Pakistanis – not the United States, and previously said it would visit Oman and Russia after the discussions in Islamabad.
President Trump posted on Truth Social, Sat., 2:19 PM:
“I just cancelled the trip of my representatives going to Islamabad, Pakistan, to meet with the Iranians. Too much time wasted on traveling, too much work! Besides which, there is tremendous infighting and confusion within their ‘leadership.’ Nobody knows who is in charge, including them. Also, we have all the cards, they have none! If they want to talk, all they have to do is call!!! President DONALD J. TRUMP”
Araghchi said that in his talks with the Pakistani leaders, he shared a framework to “permanently end the war on Iran.”
“Have yet to see if the U.S. is truly serious about diplomacy,” Araghchi wrote on X, shortly after President Trump canceled plans for his top two negotiators.
Araghchi then arrived back in Islamabad on Sunday as the Pakistanis scrambled to reignite ceasefire talks between Tehran and Washington.
Araghchi had been in Oman, but returned to Islamabad before continuing on to Moscow, as scheduled.
But Trump, prior to the White House Correspondents Dinner, told reporters that within 10 minutes of him cancelling Witkoff and Kushner’s trip, Iran sent a “much better” proposal.
He did not elaborate but stressed that one of his conditions is that Iran “will not have a nuclear weapon.” The status of Iran’s enriched uranium has long been at the center of tensions.
William J. Burns, the former CIA chief who played a lead role in the Obama-era negotiations, said in the New York Times last Friday that a good deal would require “tight nuclear inspections, an extended moratorium on the enrichment of uranium and the export or dilution of Tehran’s existing stockpile of enriched uranium in exchange for tangible sanctions relief.”
He also called for the Trump administration to delineate every term. “Unless the lines are clearly drawn and strictly monitored,” Mr. Burns said, “the Iranians will paint outside them.”
This is what happened when Trump pulled out of the Obama agreement in 2018 and replaced it with nothing. At the time, Iran did not have a single bomb’s worth of uranium. Then it started enriching with a vengeance. [For the record, personally, I was against Trump pulling out of the agreement in 2018.]
Monday, Axios reported that Iran had given the U.S. a new proposal to reopen the Strait of Hormuz and end the war that includes postponing nuclear negotiations, citing a U.S. official and two people with knowledge of the matter.
The plan, conveyed through mediators in Pakistan, calls for extending the ceasefire so the parties can work toward a permanent end to the fighting, Axios said. Nuclear talks would come later, only after a U.S. blockade of the Strait is lifted.
Pakistani mediators have given the proposal to the White House but it’s unclear whether the U.S. wants to explore it, Axios said.
An interim deal would echo what many Middle East analysts have said for weeks – that the U.S. and Iran should reopen the Strait as soon as possible to lower fuel prices and ease pressure on the global economy, while leaving issues such as Iran’s nuclear program for later talks. Some Persian Gulf Arab and European leaders believe that such negotiations will take at least six months, Bloomberg has reported.
President Trump, however, has indicated that Iran’s atomic program must be resolved as part of any agreement and that the blockade will stay in place until then.
Foreign Minister Araghchi arrived in Moscow on Monday for a meeting with Vladimir Putin.
German Chancellor Friedrich Merz said the U.S. is being “humiliated” by Iranian leaders as President Trump struggles to negotiate an end to the war, comments that risk driving a further wedge in transatlantic relations.
In unusually candid terms, Merz said he didn’t see “what strategic exit the Americans are now choosing,” adding that Tehran’s negotiators are proceeding “very skillfully – or indeed very skillfully not negotiating.”
The result is that an “entire nation is being humiliated by the Iranian leadership, particularly by these so-called Revolutionary Guards,” Merz told a group of students at a secondary school in western Germany on Monday.
The comments underscore several European leaders’ reassessment of their relations with Trump. A tendency to smooth ties by currying favor has given way to a more sober perspective of a U.S. president who has repeatedly called into question NATO, bolstered European far-right forces and threatened to seize Greenland, a territory of Denmark.
Italian Prime Minister Giorgia Meloni, who had cultivated close ties with Trump, has navigated a falling out with the American leader, who attacked her verbally after she defended Pope Leo XIV against Trump’s broadsides. At a European Union summit in Cyprus on Friday, Meloni said she’s had no recent contact with Trump, though relations with the U.S. are “still solid.”
Tuesday, President Trump posted on Truth Social, in part: “The Chancellor of Germany, Friedrich Merz, thinks it’s OK for Iran to have a Nuclear Weapon. He doesn’t know what he’s talking about! …I am doing something with Iran, right now, that other Nations, or Presidents, should have done long ago. No wonder Germany is doing so poorly, both Economically, and otherwise!”
We then learned late Monday that President Trump was unhappy with the latest Iranian proposal on resolving the war, dampening hopes for a resolution to the conflict.
Iran’s proposal to set aside discussion of the nuclear program until the war is ended is unlikely to satisfy the U.S., which has insisted nuclear issues must be dealt with from the outset and that is Trump’s red line.
The aforementioned Raz Zimmt posted on X, “It is clear to all that whatever is not resolved by the end of the war is highly unlikely to be resolved afterward.”
Tuesday morning, Trump posted on Truth Social:
“Iran has just informed us that they are in a ‘State of Collapse.’ They want us to ‘Open the Hormuz Strait,’ as soon as possible, as they try to figure out their leadership situation (Which I believe they will be able to do!).”
Shortly after, we had the bombshell announcement that the UAE was leaving OPEC as of May 1, in a move it says will help it meet changing demand, but which analysts see as a heavy blow to the organization.
“This decision follows a comprehensive review of the UAE’s production policy and its current and future capacity and is based on our national interest and our commitment to contributing effectively to meeting the market’s pressing needs,” the Gulf state said in a statement.
“While near-term volatility, including disruptions in the Arabian Gulf and the Strait of Hormuz, continues to affect supply dynamics, underlying trends point to sustained growth in global energy demand over the medium to long term,” it said.
The country will also exit OPEC+, a group of major oil-producers, and gradually increase production afterward, it added.
OPEC’s influence was already weakening as U.S. oil production soared. And the Emirates plans to accelerate investment in energy production, according to the state news agency.
Before the war, the Emirates was producing about 3.6 million barrels of oil per day, according to the International Energy Agency – roughly 12 percent of OPEC’s overall production.
“The UAE will continue to act responsibly, bringing additional production to market in a gradual and measured manner, aligned with demand and market conditions,” the statement said.
The announcement came amid festering tensions between the Emirates and Saudi Arabia – the de facto leader of the cartel. Once close allies, the two Gulf countries have diverged in recent years, and the Emirates has increasingly gone its own way in the region, pursuing closer ties to Israel and backing an armed separatist group in southern Yemen.
The war with Iran appears to have hardened that rift, as Saudi Arabia and the Emirates weigh differing strategies of how to respond to Iran. The Emirates – which hosts a major U.S. military base – has faced thousands of Iranian missile and drone attacks. Emirati officials have spoken of their dissatisfaction with the response of multilateral organizations, including the Gulf Cooperation Council and the Arab League, hinting that they would have preferred a harsher unified stance against Iran.
Meanwhile, around six to eight supertankers laden with Iranian oil were idling in waters near the port of Chabahar in the Gulf of Oman late last week, according to satellite images and analyses from United Against Nuclear Iran and maritime intelligence firm Windward, with more smaller tankers nearby. It’s the same area where the U.S. Navy said it had redirected two very large crude carriers that it intercepted last week.
The buildup of tankers at Chabahar is more evidence that Iran is continuing to load oil onto ships, and also that the U.S. blockade appears to be working as an effective barrier to stop the crude getting to customers. Traffic through the Strait remains near-zero, and Tehran could soon have to start shutting-in production as storage space runs out.
Some 155 million barrels of Iranian crude are either in transit or floating storage all over the world, according to an estimate from Vortexa Ltd. The U.S. has been increasing its pressure on Tehran by boarding tankers in the Indian Ocean and also sanctioning a major Chinese refiner that it said was a buyer of Iranian oil.
As for Foreign Minister Araghchi’s trip to Moscow, it was reported President Putin praised Iran’s resistance amid the U.S. and Israeli military campaign, and pledged Moscow’s help in resolving the conflict.
Secretary of State Marco Rubio said he believes Iran is serious about making a deal with the U.S., but added the U.S. won’t allow Tehran to control the Strait.
Wednesday, the Wall Street Journal reported that President Trump has told his aides to prepare for an extended blockade and that it carries less of a risk for the U.S. then resuming hostilities or walking away from the conflict without a deal that curbs Iran’s nuclear activities, the Journal citing unnamed American officials.
It’s unclear how much storage and time Iran has left before it would need to close down wells, which may damage them permanently. Analytics firm Kpler estimates it has another 12 to 22 days.
The Journal also reported the war has imposed a heavy cost on Iran’s economy: more than a million people out of work, soaring food prices and a prolonged internet shutdown that has slammed online businesses.
The question is how much pain Iran’s leaders are willing to tolerate as they try to negotiate a favorable end to the war.
“It is an authoritarian regime, and it can claim that resisting economic pressure is a question of national pride,” said Alex Vatanka, a senior fellow and Iran expert at the Middle East Institute. At the same time, “As the money dries up because of the blockade, we may find that more and more folks have no choice but to mobilize politically,” he said.
President Trump posted on Truth Social at 4:05 AM, Wednesday morning:
“Iran can’t get their act together. They don’t know how to sign a nonnuclear deal. They better get smart soon! President DJT”
The post was accompanied by an AI-generated photo of him in a Rambo pose. Again, this was at 4:05 AM.
Later Wednesday:
“The United States is studying and reviewing the possible reduction of Troops in Germany, with a determination to be made over the next short period of time. Thank you for your attention to this matter!”
This morning, Friday, crude oil fell some on word that Iran had sent an updated peace proposal, apparently through Pakistan, which was delivered to the U.S. government.
President Trump faced a War Powers deadline over military action in Iran. Under the 1973 law, troops must be withdrawn within 60 days unless Congress authorizes the deployment, which it has not done. The administration says a ceasefire reached three weeks ago has “terminated” hostilities.
Speaking to reporters outside the White House this afternoon, the president said Tehran wants to make a deal, but he’s not “satisfied.” Trump noted Iran is “asking for things that I can’t agree with” while adding that he would “prefer not” to strike the country.
—The aircraft carrier USS Gerald R. Ford will depart the Middle East and begin the sail for home in coming days, multiple U.S. officials said, an expected relief for roughly 4,500 sailors who have been deployed for 10 months – but a loss of significant firepower as peace talks between the United States and Iran stagnate.
The Ford is one of three aircraft carriers in the region – the others are the USS George H.W. Bush and the USS Abraham Lincoln – amid hostilities with Iran. While the Ford is in the Red Sea, the Lincoln and Bush are operating in the Arabian Sea to enforce the blockade.
As of Wednesday, the Ford had been deployed 309 days – the record for the longest time any modern U.S. aircraft carrier has been at sea, which has worn on the ship. It’s undergone some repairs after sustaining damage in a laundry room fire that injured some sailors, and the ship has had repeated issues with its toilets. Once the ship is back in port, it is expected to undergo extensive repairs and maintenance.
Keeping the Ford at sea for so long will affect not only its future availability but also the readiness of other warships because the yards that perform their maintenance have limited capacity.
—Lebanon said Israeli strikes killed 14 people on Sunday, with Lebanon’s health ministry saying the strikes were on the country’s south, the deadliest day since a ceasefire between Israel and Hezbollah went into effect. Israel said one of its soldiers was also killed.
The ceasefire, originally for ten days, was extended to mid-May, and while it has brought a significant reduction in hostilities, both sides have continued to fire at each other, trading blame over breaches.
Hezbollah said it would not cease its attacks on Israeli troops inside Lebanon and on towns in northern Israel as long as Israel continued its “ceasefire violations.”
Israeli troops are operating inside what they have labeled a “yellow line,” which demarcates a ribbon of Lebanese territory around 10km deep along the length of the border, where residents have been warned not to return.
More than 2,500 people have been killed in Israeli strikes in Lebanon since March 2nd, when Hezbollah drew Lebanon into the Middle East war by firing rockets at Israel to avenge the death of Iran’s supreme leader Ali Khamenei in U.S.-Israeli strikes.
—
Wall Street and the Economy
As the Federal Reserve’s Open Market Committee prepared to meet this week, the Senate was set to proceed with Kevin Warsh’s nomination to lead the Fed, after Republican Sen. Thom Tillis of North Carolina said on Sunday that he was prepared to lift his blockade and lend his support toward confirmation.
For weeks, Tillis refused to advance Warsh or any other Fed nominee while the Trump administration investigated Chairman Jerome Powell, in a clearly politically motivated investigation.
But Jeanine Pirro, the U.S. attorney for the District of Columbia, said last Friday the Justice Department would drop the matter, which focused on cost overruns in a renovation of the Fed’s headquarters.
Pirro, however, also said she would “not hesitate” to reopen the criminal investigation, but her move to stand aside was sufficient for Sen. Tillis, who said on “Meet the Press” that he was ready to move forward with a key, first committee vote on Warsh.
“They have made it very clear that the current investigation is completely and fully ended,” Tillis said of his conversations with the D.O.J.
The senator said those discussions gave him the assurances he needed “to feel like they were not using the D.O.J. as a weapon to threaten the independence of the Fed.”
The Senate Banking Committee then voted 13-11 to send Warsh’s nomination to the full Senate.
And Wednesday, the Fed left interest rates unchanged, as expected, but revealed a deepening division over the outlook for policy amid increased uncertainty caused by the Iran war.
Four officials voted against the decision – Cleveland Fed President Beth Hammack, Minneapolis Fed President Neel Kashkari and Dallas Fed President Lorie Logan – who “supported maintaining the target range for the federal funds rate but did not support inclusion of an easing bias in the statement at this time.”
Governor Stephen Miran dissented in favor of a quarter-point reduction in rates.
The 8-4 vote marked the first time since Oct. 1992 that four officials dissented against an FOMC decision.
Fed officials have indicated that a sharp deterioration in the labor market would prompt them to consider cutting rates again. They also need to have more tangible evidence in hand that inflation is headed back down to the Fed’s target.
And then as he began his press conference, Chair Powell said that while he welcomes the imminent arrival of Kevin Warsh, and that Warsh will be approved as the new chair by the full committee, he, Powell, will stay on as a Fed governor for as long as it takes until he is certain the series of legal attacks on the Fed and its ability to conduct monetary policy, ceases.
“After my term as chair ends on May 15, I will continue to serve as a governor for a period of time to be determined,” Powell said, adding, “I plan to keep a low profile as a governor. There is only ever one chair of the Federal Reserve Board. When Kevin Warsh is confirmed and sworn in, he will be that chair.”
“My decisions on these matters will continue to be guided entirely by what I believe is in the best interest of the institution and the people we serve.”
Powell can serve as a board member until January 2028, though in normal times he would have stepped down May 15.
Treasury Secretary Scott Bessent criticized Powell for his decision to stay on the board.
“It’s highly unusual for someone who says he’s an institutionalist and cares about norms at the Fed,” Bessent said Wednesday. “This is a violation of all Federal Reserve norms.”
On the economic data front, we had key inflation data…the personal consumption expenditures index (PCE) for March, the Fed’s preferred inflation barometer, and the headline numbers were 0.7%, 3.5% year-over-year, and on core, ex-food and energy, 0.3% and 3.2%. But these were all in line with expectations so, while high, they didn’t move the bond market. Continually rising oil prices, however, did, though crude fell back some Thursday/Friday.
Personal income for the month came in better than forecast, 0.6%, and consumption was a strong 0.9%.
March durable goods were up 0.8%, 0.9% ex-autos.
The Chicago PMI for April came in at 49.2, much lower than forecast (50 the dividing line between growth and contraction).
And then today, the ISM manufacturing reading for the month was 52.7, in line with expectations.
On the housing front, March housing starts were much better than forecast, an annualized pace of 1.502 million, while February’s figure was well below estimates, 1.352 million.
The S&P Case-Shiller 20-City Home Price Index rose just 0.9% year-over-year in February, down from 1.2% in January and below market forecasts of 1.1%. This marks the slowest annual growth since July 2023, highlighting the ongoing cooldown in the U.S. housing market.
For the ninth straight month, inflation outpaced home price appreciation, prolonging the streak of negative real home price returns.
Mortgage rates over 6% aren’t helping…and this week, Freddie Mac’s 30-year fixed-rate mortgage came in at 6.30%. [This is a weekly release, Thursdays.]
Lastly, we had our first look at first-quarter GDP, 2.0%, below forecasts. The Atlanta Fed’s GDPNow barometer’s final look at Q1 was 1.2%. The official figure will be revised twice in the coming months.
Spending on AI data centers represented as much as half of the 2% figure, with the four big tech companies – Microsoft, Meta, Amazon and Alphabet – collectively spending $131 billion on them in the first quarter, a 71% increase from last year. AI is spurring business spending on computer chips and servers, as well as downstream for electric power generating and cooling equipment.
Overall business investment increased at a 10.4% annual rate in the quarter, the strongest growth in nearly three years.
The Atlanta Fed’s initial look at Q2 GDP is 3.5%.
Europe and Asia
A flash estimate of April inflation in the eurozone came in at 3.0%, according to Eurostat. Ex-food and energy it was 2.1%. The energy component was up 10.9%.
Both the European Central Bank and Bank of England, like the Federal Reserve, held interest rates steady at their meetings this week, even as inflation rises and growth slows.
The ECB said incoming data had largely confirmed its previous inflation outlook, but that risks were shifting – with price pressures building on the upside and growth weakening on the downside.
The Bank of England signaled that interest rates are likely to rise this year as it attempts to curb inflation following a “significant energy price shock” from the war.
While the majority of the BOE’s rate-setters voted to keep borrowing costs at current levels, they signaled they would act “forcefully” should oil prices reach and remain at the $130 a barrel level for a number of months, referring to Brent crude, which hit $126 on Thursday.
Both central banks, like the Fed, say the job is to get inflation back to the 2% level.
The euro area unemployment rate for March was 6.2%. [Eurostat]
But late today, President Trump said he would raise tariffs on European Union-made cars and trucks entering the U.S. to 25% from 15%, claiming the EU hadn’t complied with the trade deal.
China’s National Bureau of Statistics reported the April manufacturing PMI was 50.3, non-manufacturing 49.4. The private RatingDog manufacturing reading was 52.2.
Japan’s April manufacturing PMI was a strong 55.1
March retail sales rose 1.3% month-over month.
The March unemployment rate was 2.7%.
The Bank of Japan also left interest rates unchanged this week, though the short-term policy rate at 0.75% is still the highest level since Sept. 1995. The vote was 6-3, the three dissenters calling for a hike to 1.0%.
In its quarterly outlook, the BOJ raised its FY2026 growth forecast to 2.8% from 1.9%, citing higher energy costs, while the growth forecast was trimmed from 1.0% to 0.5%.
Japan’s 10-year bond hit a 30-year high in yield, finishing the week at 2.49% (after hitting 2.52%).
Street Bytes
—The S&P 500 gained 10.4% in April, the best monthly performance since November 2020, when a pandemic-stricken market got news of a Covid-19 vaccine.
The S&P has gained 10% or more in a month 30 times since 1928 – with just four cases since 1992 – and on average gained just 1.6% the following month, which isn’t chopped liver.
For the week, the market riding very strong earnings over the energy crisis in the Middle East, the Dow Jones rose 0.6% to 49499, while the S&P, up 0.9%, and Nasdaq, 1.1%, finished at new closing highs.
—U.S. Treasury Yields
6-mo. 3.69% 2-yr. 3.89% 10-yr. 4.38% 30-yr. 4.97%
The yield on the most inflation sensitive 2-year rose 12 basis points on the week.
The U.S. national debt now exceeds 100% of gross domestic product, crossing a once-unthinkable threshold, on the way toward breaking the record set in the wake of World War II.
As of March 31, the country’s publicly held debt was $31.265 trillion, while GDP over the preceding year was $31.216 trillion, according to the above-noted GDP data from this week. That puts the ratio at 100.2%. It will likely climb from there.
—From the Wall Street Journal:
“It took a few days to close thousands of Middle East oil wells early in the Iran war. The prolonged closure of the Persian Gulf means it will take months or even years for energy flows to recover.”
With traffic in the Strait remaining close to a standstill:
“Analysts and oil industry executives say prospects for a speedy resumption of Gulf crude supplies are worsening. Even if the Strait opens tomorrow, the damage to the global economy will be long lasting.
“Reanimating the world’s most productive oil patch will require overcoming substantial engineering and logistical challenges….
“Fuel amassed in storage tanks has to get to market to clear space for more oil. Workers who left the region when war broke out must return.”
It takes time to put all the infrastructure back in place, and one of the biggest hurdles will be restarting oil wells. Also, it will be hard to assess the state of some fields.
“Closing fields hurriedly, as many were in the early days of the war, can damage wells in addition to equipment such as submersible pumps that lift oil from fields where natural pressure isn’t strong enough.
“Restarting the fields is costly, so the looming plunge in oil revenue could complicate the restart, the Iraqi officials said.” [Iraq also doesn’t have a state tanker fleet, like Saudi Arabia has, meaning it relies on international traders and shipping companies.]
Meanwhile, as noted above, the United Arab Emirates announced it is leaving OPEC, and the energy minister said Tuesday it is aiming to achieve 5 million barrels of oil output capacity by 2027, and it would like more freedom in pursuing that goal. OPEC – whose members collaborate to restrict supply and drive prices higher – likely would have stood in the way.
Editorial / Wall Street Journal, part II….
“What do you know? U.S. shale fracking has achieved Washington’s longtime strategic goal of curbing the Organization of the Petroleum Exporting Countries’ control over oil prices. The cartel is fracturing, with the United Arab Emirates announcing its exit on Tuesday. This is another foreign policy victory for American fossil-fuel energy.
“The U.A.E. has chafed for years at OPEC’s per-country production quotas that are intended to limit global supply and push up oil prices. Saudi Arabia and the U.A.E. are the cartel’s two swing producers that have excess capacity to ramp up output, with Abu Dhabi capable of producing 1.4 million barrels a day more than OPEC’s quota….
“The U.S. produced 13.2 million barrels a day in January, up from 5.4 million in January 2010. Production over the last two decades has also climbed in Canada, Guyana and Brazil. U.S. fracking pioneer Harold Hamm is making a big bet that Argentina’s Vaca Muerta shale deposit could become as productive as the Permian basin in Texas.
“The result is that OPEC’s ability to fix global supply and prices has waned. In 2014 OPEC tried to flood the market in an effort to drive down prices and squash America’s fracking boom. The gambit boomeranged. Some over-leveraged wildcatters did fail. Others were acquired by large producers that caught the fracking wave late.
“But plunging prices ultimately forced U.S. producers to become more efficient and competitive. Now U.S. producers can turn a profit at lower oil prices (about $50 a barrel) than what most OPEC countries need to balance their budgets ($80 to $120 a barrel).
“While OPEC’s control over prices has waned, its quotas have hurt the U.A.E., which has a lower break-even price than other OPEC members. Abu Dhabi has also sometimes clashed with the Saudis because the U.A.E. has been forced to bear a disproportionate share of the cartel’s production cuts. To add insult to injury, Iran’s production has increased thanks to its quota exemption.”
As noted above, once the Strait reopens, it will take time for countries to ramp up production, and the world will need the U.A.E.’s spare capacity.
And as the Journal concludes: “If the U.A.E. exit is a portent, the OPEC cartel may eventually break up its own under the weight of competition.”
One more item…U.S. inventory data showed sharp declines in crude and fuel stockpiles, while exports surged to record highs above 6 million barrels per day, underscoring tightening global supply. Gasoline and refined fuel prices have also spiked, amplifying inflation concerns worldwide as energy markets remain on edge.
—Exxon Mobil beat estimates for first-quarter adjusted earnings on Friday, though unadjusted profit dropped to its lowest level in five years due to disrupted shipments as a result of the Iran war and paper losses from hedging activity.
Adjusted earnings for the first three months of the year were $1.16 per share, above the consensus of $1.00. The adjusted figure excluded a $700 million loss from cargoes that could not be delivered as a result of the unprecedented energy market disruption caused by the Middle Eastern conflict that began at the end of February.
Revenue of $85.14 billion was up 2% and beat forecasts for $81.1 billion.
Exxon benefited from higher oil prices and increased production from its primary assets in the Permian Basin and Guyana, which helped to offset production disruptions in the Middle East.
In a statement, Exxon CEO Darren Woods said the company was stronger than it was a few years ago, but “events in the Middle East tested that strength.”
Exxon uses financial derivatives to mitigate the risk of price changes during the time it takes to deliver cargoes to customers. The value of the physical shipment is not reflected in earnings until the transaction is complete, creating a timing impact, the company said.
“In general, it takes a few months for that to unwind,” Exxon CFO Neil Hansen said in an interview.
About 20% of Exxon’s oil and gas production is located in the Middle East, meaning it has one of the highest exposure rates among its rivals. Chevron, the No. 2 U.S. oil producer, said on Friday that less than 5% of its production comes from the region.
Exxon said that if the Strait of Hormuz is closed for the entire second quarter, that will result in 750,000 barrels per day of reduced production from the Middle East compared to last year.
Chevron delivered adjusted earnings of $1.41 per share, down sharply from $2.18 a year ago, but well above analysts’ expectations. Revenue rose 2% to $48.61 billion, below the $51.8 billion consensus view.
—Two of Big Tech’s leaders faced off in court in Oakland, Calif., Monday, in an ongoing dispute over the structure of the company that created the AI model ChatGPT.
Elon Musk founded OpenAI in 2015 before leaving and launching his own AI company. He sued his co-founder, and current OpenAI CEO, Sam Altman, in 2024, alleging that he manipulated Musk into co-founding and financially backing the company before abandoning its original nonprofit mission.
Jury selection in the case began Monday.
Musk invested about $38 million in OpenAI from late 2015 through May 2017 to support the nonprofit. OpenAI said the founders realized by late 2017 that more capital would be needed to develop its AI tools in the ways they hoped, leading them to create a for-profit entity in 2019.
Musk protested the move before stepping down from OpenAI’s board, citing potential conflicts of interest in working for Tesla. He has since launched his own rival company, xAI.
OpenAI altered its corporate structure last year to convert it into a public benefit corporation under control of the nonprofit. Musk offered to buy the nonprofit for nearly $100 billion last year, but OpenAI rejected the offer.
Musk and Altman have since then repeatedly clashed online, leading up to the opening of the case between them. Both are expected to testify during the four-week trial.
Meanwhile, on Tuesday, shares in OpenAI partners such as SoftBank Group Corp. and Oracle Corp. fell after the Wall Street Journal reported that the AI startup recently failed to meet targets for sales and new users, reviving worries about spending ahead of tech earnings.
SoftBank tumbled as much as 11% in Tokyo, while CoreWeave Inc., Oracle and Advanced Micro Devices Inc. fell by about 3% in U.S. premarket trading. While OpenAI has struck deals with dozens of firms, markets tend to focus on a smaller subset of major partners including Nvidia, SoftBank, Oracle, Microsoft, CoreWeave and AMD as investment proxies for the creator of ChatGPT.
Investors are on high alert for evidence that tech companies are staying committed to previously-announced plans for huge capital expenditure to build out AI infrastructure.
Separately, Microsoft announced an amended long-term agreement with OpenAI that will see the company no longer have exclusive access to the AI startup’s intellectual property and AI models, while also altering its revenue-sharing deal with OpenAI.
The news comes ahead of Microsoft’s earnings report on Wednesday, and just six months after the two companies formalized an agreement that allowed OpenAI to transform into a for-profit business.
Under the terms of that deal, Microsoft was given exclusive access to OpenAI’s IP and models until the company achieved artificial general intelligence (AGI), or AI that’s as smart or smarter than humans. The new agreement, however, eliminates that clause, allowing OpenAI to provide its models to Microsoft’s competitors.
Microsoft’s Azure will continue to serve as OpenAI’s primary cloud platform and get access to its latest products first, but the new agreement means OpenAI can now offer all of its services through competing cloud providers, such as Amazon Web Services.
Microsoft then reported earnings after the close, Wednesday, beating financial estimates for its fiscal third quarter.
The company posted adjusted earnings of $4.27 a share on revenue of $82.9 billion, which is higher than earnings estimate of $4.05 a share on revenue of $81.4 billion.
Microsoft said that revenue for Azure – its cloud computing segment – grew 40% from the prior year, outpacing the estimated 37.9% growth analysts expected.
Microsoft is among a group of the world’s largest tech companies that are spending billions of dollars to build out the infrastructure needed to power artificial intelligence. Wall Street initially celebrated plans to invest big in the evolving tech, but that sentiment has shifted as investors want to see more of a return on this spending that has impacted free cash flows.
Capital expenditures for the quarter were $31.9 billion, up 49%. Free cash flow, meanwhile, dropped 22% to $15.8 billion, due to higher investments that Microsoft is making as cloud demand rises.
Microsoft said on its earnings call that it expects second-quarter capex spend to increase to over $40 billion. For the year, Microsoft said it expects to invest about $190 billion in capex. That’s well ahead of Wall Street’s current 2026 estimate of $160 billion.
“We are focused on delivering cloud and AI infrastructure and solutions that empower every business to eval-max their outcomes in the agentic computing era,” CEO Satya Nadella said in the earnings release.
The company said it expects fiscal fourth-quarter Azure revenue to grow between 39% and 40%, which is ahead of Wall Street estimates for 36.8% growth.
Microsoft also said it expects total fourth-quarter revenue to be between $86.7 billion and $87.8 billion, compared with analyst estimates of $87.6 billion.
—Alphabet reported strong first-quarter results Wednesday. Earnings per share were $5.11, well ahead of the Street’s $2.63, and up from $2.81 last year. Revenue for the quarter reached $110 billion, more than expectations of $107 billion, and up 22% on the year.
The most closely watched line in Google’s reporting is its cloud unit which will spend up to $190 billion on AI data centers this year, to support its customers that rent AI servers over the internet. Quarterly cloud sales hit $20 billion, up 63% with a 33% operating profit margin. Despite mounting depreciation expenses, Google Cloud’s margin is rising quickly.
Google Cloud’s backlog nearly doubled from a quarter ago, hitting $462 billion at the end of the period.
Google Cloud sales are important to justify the company’s huge capital costs. Alphabet’s capex is on pace for its 2026 guidance, hitting almost $36 billion in the first quarter, doubling last year’s spend.
“We are seeing unprecedented internal and external demand for AI compute resources,” CFO Anat Ashkenazi said on the earnings call. “The investment we are making in AI is delivering strong growth, as evidenced by the record revenue and backlog growth in Google Cloud and strong performance in Google service.”
“Our cloud revenue would have been higher if we were able to meet the demand,” said CEO Sundar Pichai.
Advertising remains Google’s core business, at 70% of revenue. Sales were up 16% here with the search franchise leading the way at 19% growth.
—Amazon.com shares rose following an earnings and revenue beat, as well as positive commentary from the e-commerce giant regarding its AI chips.
Amazon posted adjusted first-quarter earnings of $2.78 a share on revenue of $181.5 billion. The Street was at $1.63 a share on revenue of $177.3 billion.
Amazon said that revenue from its Amazon Web Services cloud unit rose 28% from the prior year to $37.6 billion. That was above Wall Street estimates of $36.9 billion and an acceleration of last quarter’s 24% year-over-year revenue growth.
CEO Andy Jassy noted in the earnings release that it was AWS’s fastest growth in 15 quarters.
Amazon also said it expects second-quarter sales to be between $194 billion to $199 billion, above current consensus of $189 billion. But second quarter operating income is expected to be between $20 billion and $24 billion. The midpoint of that guidance – $22 billion – is lower than Wall Street estimates of $22.7 billion.
Amazon’s hefty AI investments have worried investors. The company said on Wednesday that first-quarter purchases of property and equipment, one metric to gauge the company’s capital spending, was $44.2 billion. That was higher than the $43.6 billion analysts expected.
Andy Jassy said on the earnings call that the company now has over $225 billion in revenue commitments for Trainium, AWS’s AI chip. That demand signal excited investors and the stock rose.
—Meta Platforms shares fell even after beating expectations for first-quarter earnings.
The stock reaction is largely driven by the company’s announcement that it would be raising capital expenditures for the year. The forecasted range for capex is now $135 billion at the midpoint versus $125 billion previously.
“This reflects our expectations for higher component pricing this year,” Meta said in the earnings release.
Adjusted earnings per share were $10.44, well ahead of Wall Street’s consensus estimate of $6.67, and up from $6.43 last year. The big beat was driven by a large tax benefit, though excluding its effect on earnings, Meta still had EPS of $7.31. Revenue for the quarter reached $56.3 billion, more than expectations of $55.6 billion, and up 33% on the year.
Though users only rose by 4% from last year to 3.6 billion, Meta showed them 19% more ads and were able to keep ad prices rising at the same time, by 12%. The success Meta is recently having with soaring impressions coupled with higher prices may indicate its artificial-intelligence initiatives in engagement and ad targeting are already reaping benefits.
“If we end up misspending a couple of hundred billion dollars, I think that that is going to be very unfortunate, obviously,” Zuckerberg said in a 2025 podcast. “But what I’d say is I actually think the risk is higher on the other side.”
–Last up in Big Tech earnings week was Apple, which reported after the bell, Thursday. And the company topped analyst estimates on the top and bottom lines on strong iPhone sales.
For the quarter, Apple reported earnings of $2.01 per share on revenue of $111.2 billion, with the Street at $1.96 and revenue of $109.66bn.
That’s up from the EPS of $1.65 and $95.35 billion in the year ago quarter.
Apple’s iPhone revenue came in at $56.99 billion, just ahead of consensus. This marks the second consecutive quarter of more than 20% revenue growth in the segment.
Apple CEO Tim Cook cited “extraordinary” demand for the iPhone 17 lineup for the earnings beat.
The company’s second-largest business, Services, generated revenue of $30.97 billion versus an expected $30.37 billion.
Mac revenue hit $8.39 billion.
The company’s Greater China revenue improved to $20.49 billion, with the Street at $18.9 billion.
This is Apple’s first quarterly report since it announced Cook will step down as CEO in September and be succeeded by senior vice president of hardware John Ternus.
—A trade group representing low-cost airlines said Monday that it was asking the Trump administration for $2.5 billion to offset some of the cost of fuel, which has surged because of the war with Iran.
“Since February, jet fuel prices have increased by nearly 100 percent and are placing significant financial pressure on value airlines,” the trade group, the Association of Value Airlines, said in a statement. The group added that the $2.5 billion “liquidity pool” it was seeking would be “used exclusively to offset incremental fuel costs, as a necessary and targeted measure to stabilize operations and keep airfares affordable during this period of volatility.”
Separately, one of the trade group’s members, Spirit Airlines, had been hoping to finalize a $500 million lifeline from the government before running out of cash.
But the Wall Street Journal reported late this morning that the airline was preparing to cease operations. I feel sorry for those who have flights booked, or may be in transit, with connections, when the plug is pulled. But the other airlines step up in one form or another at times like these, smelling an opportunity.
—TSA checkpoint numbers vs. 2025
4/30…119 percent of 2025 levels
4/29…110
4/28…78
4/27…90
4/26…126
4/25…76
4/24…98
4/23…117
—The Chinese government said on Monday that it would require Meta’s acquisition of Manus, a Singapore-based artificial intelligence company with Chinese founders, to be unwound, in a move that could chill other Chinese entrepreneurs from seeking tie-ups with foreign partners.
Chinese officials had said in January they were investigating whether Meta’s acquisition of Manus last December violated the country’s rules on foreign investment. They were also assessing whether the deal violated China’s requirements that companies obtain approval for the export of certain technologies.
The National Development and Reform Commission, a high-level ministry that oversees economic planning and plays a central role in setting China’s A.I. policy, said on Monday that it had decided to prohibit foreign investment in Manus, and instructed the parties involved to withdraw the acquisition.
But Meta has described the two teams as “deeply integrated,” so it’s not clear how such a transaction would be unwound.
The Chinese government’s decision comes just weeks before the planned meeting between President Trump and Xi Jinping.
—General Motors on Tuesday reported first-quarter profits that topped estimates and raised its full-year forecast as the company’s tariff exposure decreased more than expected.
GM posted Q1 revenue of $43.62 billion, against an estimated $43.68bn, down slightly from the $44 billion reported a year ago. The company reported Q1 adjusted earnings per share of $3.70 against $2.62 expected and $2.78 a year ago. Adjusted profit came in at $4.253 billion, up 22% compared to a year ago.
GM also raised its full-year 2026 guidance due to a favorable adjustment of approximately $500 million resulting from the Supreme Court decision nullifying some of President Trump’s tariffs.
Gross tariff costs for the year are expected to fall in a range of $2.5 billion-$3.5 billion, down from a prior $3 billion-$4 billion forecast. GM reported $3.1 billion in tariff expense last year.
GM previously said it plans to invest $10 billion-$12 billion annually in 2026 and 2027, including roughly $5 billion to expand U.S. manufacturing capacity, in order to lift domestic production to 2 million units a year.
Earlier this month, GM said Q1 U.S. sales fell 9.75 from a year ago to 626,429 vehicles, though the automaker held onto its U.S. sales crown thanks to a strong March, which helped claw back ground lost during a winter-storm-disrupted January and February.
GM grew its share in full-size pickups in the quarter, with the Chevrolet Silverado accounting for more than 128,000 deliveries – over 20% of GM’s total U.S. volume, while full-size SUV sales for the Tahoe, Suburban, and GMC Yukon remained strong.
GM’s EV sales continued to decline, falling 19% in the quarter. GM reported it remained the No. 2 electric vehicle seller in the U.S. despite the declines.
GM took $6.6 billion in EV-related charges in the back half of 2025 as it reset its expectations for the segment.
Higher gas prices have put consumers under pressure, making affordability a key concern for automakers. GM and rival Ford pushed deeper into higher-priced trucks and SUVs in recent years, which may be a concern should U.S. consumers seek more fuel-efficient and cheaper vehicles.
—Ford Motor reported a quarterly operating profit of $3.5 billion from sales of $43.3 billion. Wall Street is looking for an operating profit of $1.3 billion from sales of $42.7 billion. A year ago, Ford reported an operating profit of $1 billion from sales of $40.7 billion. [The operating profit included a $1.3 billion tariff benefit. Backing that out, operating profit was still much better than expected.]
Looking ahead, Ford expects 2026 operating profit of $8.5 billion to $10.5 billion, up from a prior range of $8 billion to $10 billion.
The news release did note: “Guidance does not include potential impacts of a sustained conflict in the Middle East or a significant downturn in the U.S. economy.”
Better product mix helped offset persistent tariff, commodity, and supplier cost headwinds. Ford has been dealing with aluminum supply issues since a September fire at Novelis’ Oswego plant in New York disrupted aluminum production.
Aluminum is only one issue. General Motors highlighted rising memory chip costs during its first-quarter earnings call.
Ford is focused on improving quality, with JD Power recently ranking the company No. 4 in its 2026 U.S. customer service index, Ford’s best showing in nearly 30 years.
Personally, all I see most Fridays (‘bad news dump day’) is a new ‘recall’ announcement.
—Caterpillar shares soared Thursday after the company reported first-quarter earnings per share of $5.54 from sales of $17.4 billion. Wall Street was looking for EPS of $4.65 from sales of $16.5 billion.
“Solid sales and…growth, combined with robust order activity, demonstrate the strength of our business and our focus on solving our customers’ toughest challenges,” said CEO Joe Creed in a news release. “A record backlog provides a strong foundation for continued positive momentum.”
Backlog ended the quarter at $63 billion, a record and up 79% year-over-year.
Sales in CAT’s Power and Energy business, which serves power demand for AI data centers, rose 22% Y/Y. Profit margins in the business were lower, however, due to tariff impacts, according to the company.
Sales in the construction and mining segments were also up from a year ago.
CAT raised guidance, now expecting low double-digit sales growth this year.
The shares are up a whopping 165% over the past 12 months, boosted by optimism around the company’s power generation business.
—United Parcel Service reported better-than-expected first-quarter numbers. Investors still look nervous. They don’t like waiting for improvement in quarters to come. They want to see it now. The shares fell 4%.
The shipping company reported first-quarter earnings per share of $1.07 and operating profit of $1.3 billion from sales of $21.2 billion. Wall Street was looking for earnings per share of $1.01 and operating profit of $1.3 billion from sales of $21 billion.
A year ago, UPS reported earnings per share of $1.49 and operating profit of $1.8 billion from sales of $21.5 billion.
The company maintained its full-year outlook, despite rising fuel costs. In January, UPS projected 2026 sales of $89.7 billion and operating profit of $8.6 billion.
Volume in the company’s U.S. domestic segment declined, as expected. The company is leaving some low-profit Amazon.com business.
—Starbucks shares rose after the company said its sales rebound is picking up steam and raised growth forecasts for the year despite consumers’ jitters over gas prices and other costs.
CEO Brian Niccol said that Starbucks is winning customers’ morning business and building strength in the afternoon, signs of progress in his effort to turn around the world’s largest coffee chain.
The Seattle-based company has over the last year and a half invested hundreds of millions of dollars to improve its cafes and service, including increasing training for baristas and upgrading interiors, to lure back customers that Starbucks had lost because of high prices and lengthy lines. Niccol said Tuesday the efforts are paying off.
“Customers now believe their Starbucks purchase is worth it compared to a year ago,” he said on an earnings call. “Clearly we have more work to do but I believe we have seen a turn in our turnaround.”
Starbucks reported a 6.2% increase in same-store sales across its regions for the three months ended March 29, outpacing analysts’ expectations.
In the U.S., same-store sales jumped 7.1%.
Revenue increased 9% to $9.5 billion, a bigger jump than forecast. Adjusted earnings were 50 cents a share, above analysts’ forecasts of 43 cents. Profit in the quarter increased 33% to $510.9 million.
The company said its sales momentum has continued in April.
—Domino’s Pizza stock closed down more than 8% on Monday after it reported weaker-than-expected U.S. same-store sales growth.
The chain’s domestic same-store sales rose just 0.9%, lower than the 2.3% bump the Street expected.
“We’re not happy with it,” CEO Russell Weiner told CNBC.
The pizza chain also lowered its full-year U.S. same-store sales forecast to low-single digit growth, down from its prior projection that U.S. same-store sales will increase 3%.
During the quarter, Domino’s faced stiffer competition from rival pizza chains. Papa John’s and Pizza Hut both matched Domino’s $9.99 “Best Deal Ever” with promotions at the same price point. And Little Caesars undercut Domino’s $6.99 Mix & Match deal with a $5.99 version.
Weiner expressed confidence that Domino’s will prove itself in the long run.
Both Pizza Hut and Papa John’s have announced plans to close hundreds of restaurants this year, which could further boost Domino’s dominant position in the pizza category.
Personally, I went to my local Domino’s for the first time in at least two years last weekend, taking advantage of a special offer, and my ‘New York Style’ sausage pie was pretty good. Or as Ronald Reagan would have mused, ‘Not bad…not bad at all.’
—Editorial / Wall Street Journal
“Progressives are testing how much ruin there is in California. On Sunday they said they’ve gathered enough signatures to place a wealth tax referendum on the November ballot, even as a new study shows it is likely to result in less state revenue.
“The proposed ballot measure would impose a (supposedly) one-time 5% tax on individuals with more than $1 billion in wealth. The tax would hit nearly all of a billionaire’s assets including trusts, as well as voting interests in a company if that exceeds his equity stake. It applies to billionaires who were California ‘residents’ as of Jan. 1 this year.
“Billionaires are already leaving the state. California Tax Foundation visiting fellow Jared Walczak estimates in a new paper that ‘reported departures already total $777 billion,’ and more ‘quiet departures’ that do not draw media coverage’ are likely this year since ‘there are solid legal reasons to believe that the initiative’s residency date and approach could be challenged successfully in court.’
“By his estimate, the wealth tax exodus could total $1.23 trillion and reduce annual state tax revenue by $3.53 billion to $4.49 billion, mainly from lower income-tax collections… That means the tax will over time cost the state more revenue than it raises because of out-migration and slower economic growth….
“If voters approve the tax, expect progressives to push soon to extend it or reduce the wealth threshold at which it hits. That’s the history of income tax hikes. The referendum also lets the Legislature and Governor amend the tax, so Democrats won’t even need voter approval. The wealth tax would be the biggest act of economic self-sabotage in U.S. history.”
—Jimmy Kimmel doubled down on his criticism of President Trump during his show on Tuesday, one day after the president called for his firing.
In his “Jimmy Kimmel Live!” monologue, the late-night host showed a clip of Trump apologizing to the first lady for likely not being able to match his parents’ 63-year marriage.
“Wait a minute, did he just make a joke about his death?” Kimmel said. “Only Donald Trump would demand I be fired for making a joke about his old age and then, a day later, go out and make a joke about his own old age.”
Kimmel’s rebuke came the same day Federal Communications Commission Chairman Brendan Carr launched an early review of Disney’s broadcast television licenses.
The early license review is an outgrowth of an FCC probe launched last March into Disney’s diversity, equity and inclusion initiatives. The timing of correspondence so close to Kimmel’s latest fight with the administration is “coincidental,” a person familiar with the FCC’s plans said.
Trump on Monday called for Kimmel to be fired for a joke he made at the expense of the first lady last week on “Jimmy Kimmel Live!” which is broadcast by Disney’s ABC television network. On his April 23 show, Kimmel presented a mock White House Correspondents’ Dinner speech where he joked that the first lady had “a glow like an expectant widow.”
Of course two days later we had the serious incident at the WHCD.
—Lionsgate’s Michael, a two-hour biopic about how Michael Jackson became the King of Pop, took in an estimated $97 million of tickets at the domestic box office, and another $120.4 million of tickets overseas, for projected $217.4 million in worldwide sales through Sunday, including $24.4 million in IMAX screens. It’s the highest-grossing domestic biopic opening of all time.
Super Mario Galaxy sold another $21.2 million domestically, bringing its worldwide total to $831.5 million since opening April 1.
So far this year, domestic ticket sales of $2.57 billion are 14.2% above this point in 2025, Comscore said.
Foreign Affairs
Russia/Ukraine: At least eight people were killed and 49 injured in Russian strikes across Ukraine last Friday night, including five in the central city of Dnipro, where officials said an apartment building was hit.
President Volodymyr Zelensky said the latest attack lasted “practically all night,” while rescue workers were still searching for survivors under rubble in Dnipro Saturday morning.
British jets were scrambled from Romania during the heavy attack when Russian drones were detected near the border, though the UK Ministry of Defense rejected a report it had shot some down.
Meanwhile, Ukraine carried out some of its longest-distance drone strikes deep inside Russian territory.
In Yekaterinburg, almost 1,000 miles from Ukraine’s border, the governor said six people were injured when a building was struck – while in nearby Chelyabinsk, a local leader said drones targeting an industrial facility were intercepted.
Russian missiles and drones also targeted the northern city of Chernihiv, where officials said two people were killed, as well as Odesa and Kharkiv.
Wednesday, President Trump said he encouraged Vladimir Putin to conclude his war and rebuffed an offer from Putin to help secure Iran’s nuclear material.
“He told me he’d like to be involved with the enrichment if he can help us get it. I said, ‘I’d much rather have you be involved with ending the war with Ukraine,’” the president told reporters in the Oval Office.
Calling the conversation with Putin “very good,” Trump said he suggested “a little bit of a ceasefire” in the Ukrainian conflict to the Russia leader.
The Kremlin account of the call said Putin offered a temporary truce for the annual celebration of the World War II victory over Nazi Germany, which Russia marks on May 9.
Kremlin foreign policy aide Yuri Ushakov called the conversation “friendly, frank and businesslike,” saying it lasted for more than an hour and a half.
Putin said he supported Trump’s decision to extend a truce with Iran to allow time for more negotiations, Ushakov said.
On Ukraine, Ushakov didn’t say how long the proposed truce would last.
Earlier Wednesday, Russia’s Defense Ministry said the annual Red Square military parade on May 9 would take place without armored vehicles or missile systems for the first time since 2007 “due to the current operational situation.”
Random Musings
–Presidential approval ratings….
Rasmussen: 43% approve of President Trump’s job performance, 56% disapprove (May 1).
A Reuters/Ipsos poll released April 28 found President Trump’s approval rating had fallen to the lowest level of his current term, 34%, though the majority of responses were gathered prior to the incident at the White House Correspondents’ Association dinner.
—A clear majority of Americans blame President Trump for surging gasoline prices, which is weighing on his Republican Party ahead of November’s midterm elections, according to another Reuters/Ipsos poll.
Some 77% of registered voters in the poll, which concluded early this week, said Trump bears at least a fair amount of responsibility for the recent rise in gas prices, sparked by the war on Iran.
The view was widely shared across the political spectrum, with 55% of Republican voters, 82% of independents and 95% of Democrats pinning blame on the president for the higher costs.
Some 58% of voters, including one in five Republicans and two-thirds of independents, said they would be less likely to support candidates in the November 3 midterms who support Trump’s approach to the conflict with Iran.
—The House on Thursday passed stalled legislation reopening the Department of Homeland Security, ending a record shutdown at the agency and resolving uncertainty over whether thousands of federal security workers would be paid in May.
The voice vote after a brief debate brought to a close a bitter partisan fight spurred by President Trump’s immigration crackdown and the tactics of federal immigration officers who fatally shot two U.S. citizens during immigration roundups in Minneapolis earlier this year.
—The Supreme Court on Wednesday struck down Louisiana’s voting map, finding that lawmakers had illegally used race when drawing up a new majority-minority district.
The decision was 6-3, split along ideological lines. The conservative majority asserted that the opinion was a limited ruling that preserved a central tenet of the Voting Rights Act, but the court’s liberal wing, in dissent, argued that the justices had taken the final step to dismantle the landmark civil rights law.
In the majority opinion, Justice Samuel A. Alito Jr. wrote that the court had kept intact the Voting Rights Act but that Louisiana lawmakers had violated the Constitution with “an unconstitutional gerrymander” by aiming to create a new district with a majority of Black voters.
Justice Elena Kagan, in dissent, countered that the practical effect of the decision would be to make it nearly impossible to use race when drawing up voting maps, writing that “the court’s decision will set back the foundational right Congress granted of racial equality in electoral opportunity.”
It is unclear how the decision will impact the midterm elections amid the nationwide redistricting battle that has spiraled already into multiple states.
Louisiana will likely lose one Democratic district.
The state then announced Thursday its congressional primaries won’t go forward as scheduled in May, due to the Supreme Court ruling.
Gov. Jeff Landry and Attorney General Liz Murrill, both Republicans, said the ruling effectively prohibits the state from carrying out the primaries under the current districts. Early voting had been scheduled to being Saturday in advance of the May 16 primary.
Democrats were not happy.
“This is going to cause mass confusion among voters – Democrats, Republicans, white, Black, everybody,” said Louisiana state Sen. Royce Duplessis, a Democrat, who represents the New Orleans area. “What they’re effectively doing is changing the rules of the game in the middle of the game. It’s rigging the system.”
—The Florida Legislature then gave final approval on Wednesday to an aggressive new map of the state’s congressional districts sought by Gov. Ron DeSantis, a Republican. The map could give his party as many as many as four new seats, improving its chances of keeping control of Congress in November.
The votes happened hours after the Supreme Court issued its long-awaited decision, which DeSantis predicted and used as the main justification to redraw the state’s map.
The redrawn districts would eliminate four Democratic-held seats – one in the Tampa area, one in the Orlando area, and two in the Fort Lauderdale area – effectively slashing the number of Democratic-leaning seats in half. Florida has 28 congressional districts; seven are held by Democrats after an eighth Democrat resigned last week.
–Back to Louisiana, President Trump said he’s nominating Fox News contributor Nicole Saphier for surgeon general after Casey Means’ path forward stalled in the Senate over questions about her experience and her stance on vaccines.
Senators of both parties grilled Means on her vaccine stance and other health topics during a tense confirmation hearing, deepening doubts about her ability to secure the votes she needs for the role.
Earlier Thursday, Trump on social media commended Means as “a strong MAHA Warrior,” while criticizing the “intransigence and political games” from GOP Sen. Bill Cassidy of Louisiana, who interrogated Means about vaccines during the hearing.
The withdrawal of Means’ nomination was a blow to Health Secretary Robert F. Kennedy Jr. and his movement, which championed Means for the role as the country’s top doctor despite her nontraditional path in medicine and some controversial past remarks on vaccines and other health topics.
Sen. Cassidy is facing the political fight of his life in his bid for re-election, with Trump posting on Truth Social:
“Hopefully all of the Great Republican People of Louisiana, which I won, BIG, three times, will be voting Bill Cassidy OUT OF OFFICE in the upcoming Republican Primary!”
Cassidy is third in the polls, the primary May 16, early voting starting Saturday, as Gov. Landry didn’t postpone it as he did for the congressional primaries.
—Saturday night, at the conclusion of the Knicks-Hawks NBA playoff game, I immediately turned on the White House Correspondents’ dinner at the Washington Hilton. For weeks I had a post-it on the event to remind myself to watch it because I wanted to see how mentalist Oz Pearlman would handle President Trump, once it became clear Trump was attending.
But the instant I flipped over, the scene at the dinner had changed literally seconds before, when unbeknownst to the attendees, including the president and first lady at the dais, along with the vice president, a gunman a level above had charged a security checkpoint. One Secret Service agent was shot in his bulletproof vest and was released from the hospital soon thereafter and no one was else was injured in the incident, including the suspect, though shots had been fired by security.
This is the same hotel where then-President Ronald Reagan was shot 45 years ago.
It seemed remarkably easy for a shooter to charge toward a ballroom where the president and his Cabinet were sitting, as well as all the reporters who cover his administration.
But the layers of security worked. The suspect did not gain access to the ballroom and President Trump’s life was never in danger.
Guests said, however, that they could enter the hotel through checkpoints on the surrounding streets by simply showing a dinner ticket or a copy of an invite to one of several predinner receptions. The tickets were reviewed by staff but weren’t scanned and there were no identification checks, attendees said.
Guests were able to access the Hilton’s lobby and lower levels without going through security scans, and only passed through magnetometers before they entered the ballroom where the dinner was held. Attendees pointed out it was easier to get into the dinner than many big sports events and concert venues.
But the gunman was staying in one of the 1,107 guest rooms and suites at the Hilton.
U.S. Acting Attorney General Todd Blanche on Sunday said the gunman who opened fire at the dinner appears to have targeted President Trump and officials in his administration.
“It does appear that he, he did, in fact, have set out to target folks that work in the administration, likely including the President,” Blanche said in an interview on NBC’s “Meet the Press.”
Blanche said authorities believe the attacker took a train from Los Angeles to Chicago to Washington, D.C., before he checked into the Washington Hilton.
The suspect, 31-year-old Cole Tomas Allen, of Torrance, California, was armed with a shotgun, a handgun and multiple knives.
Allen sent writings to family members minutes before the shooting referring to himself as a “Friendly Federal Assassin,” railing against Trump administration policies and signaling what investigators increasingly believe was a politically driven attack.
Allen’s brother contacted police in New London, Conn., after receiving the writings, according to an official. A police spokesperson said they contacted federal law enforcement after receiving that information.
The weapons were legally purchased in California.
President Trump, Sunday, 8:46 AM:
“What happened last night is exactly the reason that our great Military, Secret Service, Law Enforcement and, for different reasons, every President for the last 150 years, have been DEMANDING that a large, safe, and secure Ballroom be built ON THE GROUNDS OF THE WHITE HOUSE. This event would never have happened with the Militarily Top Secret Ballroom currently under construction at the White House. It cannot be built fast enough! While beautiful, it has every highest level security feature there is plus, there are no rooms sitting on top for unsecured people to pour in, and is inside the gates of the most secure building in the World, The White House. The ridiculous Ballroom lawsuit, brought by a woman walking her dog, who has absolutely No Standing to bring such a suit, must be dropped, immediately. Nothing should be allowed to interfere with its construction, which is on budget and substantially ahead of schedule!!!”
On Monday, Allen was charged with attempting to assassinate the president.
Editorial / Wall Street Journal
“Rep. Ro Khanna, the California Democrat with his own designs on the White House, called Sunday for a commission on political violence. But we don’t need a study group to tell Americans how to behave. We need our political and media classes to stop talking and writing in apocalyptic terms and restore reason to political debates. We need to revive the traditional moral line that violence is unacceptable.
“That won’t stop the truly deranged from criminal acts, but it might trigger fewer Cole Allens from thinking their resort to violence is morally justified.”
–Tuesday, former FBI director James Comey was indicted for allegedly threatening President Trump via a social media post last May.
Editorial / Washington Post
“The administration’s efforts to use criminal law to attack political opponents keep failing, but this attempt is even more ridiculous than usual.
“The president detests the former FBI director because of his role in starting the Russia investigations that dragged on for so much of his first term.
“The Justice Department’s first go at Comey, last September, charged him with lying to Congress. That flimsy case was thrown out in court because the White House bypassed the proper appointments process to install a prosecutor in the Eastern District of Virginia who would seek the indictment.
“The new indictment, in the Eastern District of North Carolina, charges Comey with making a criminal threat by posting a picture on Instagram of seashells on a beach that spelled out 86 and 47. Trump is the 47th president, and the number 86 is slang for getting rid of something. In the hospitality industry, it refers to someone who is unwelcome.
According to the indictment, that post amounted to “knowingly and willfully” threatening “to take the life of” the president. Good luck proving that beyond a reasonable doubt.
“The post was in poor taste, but Comey more likely meant Trump should be removed from office or otherwise defeated politically. The First Amendment requires stringent standards for proving criminal threats. Comey deleted the post promptly amid an outcry, which is evidence he did not intend to make a threat.
“This is not a serious indictment intended to secure a conviction. It’s intended to satisfy a president who wants to see his opponents face the same kind of procedural legal misery that he did. This kind of maneuver might help acting attorney general Todd Blanche keep his job for now, but the country and maybe even the Republican Party will pay a price.”
The above is a major reason why Fed Chair Powell is hanging around until his situation is cleared up, once and for all.
—King Charles III was effective in charming President Trump, while gently pushing back against the president’s attacks on Britain in Charles and Camilla’s state visit.
In an address to Congress, Charles showed his sense of humor: “Please rest assured I am not here as part of some cunning rear-guard action!”
For at least a day, or two, the ‘special relationship’ that has developed over the past 250 years seemed – on the surface at least – still special.
–According to a Reuters/Ipsos poll, a majority of Americans believe all babies born in the country should automatically be granted citizenship, as the U.S. Supreme Court prepares to rule on President Trump’s effort to end the practice.
The poll, conducted April 15-20, found that 64% of Americans oppose ending birthright citizenship, while 32% support scrapping it as Trump ordered in January 2025.
The Supreme Court is expected to rule by the end of June.
—The U.S. military said on Sunday three men were killed when it struck a boat it claimed was “engaged in narco-trafficking operations” in the Eastern Pacific Ocean.
This latest strike brings the U.S. campaign’s death toll to at least 185, according to a tally compiled by Agence France-Presse.
—Prior to this week’s rains in the Southeast, the percentage of the region that is suffering from spring drought conditions was 97 percent, witness the wildfires in Georgia and Florida.
—
Pray for the men and women of our armed forces…and all the fallen.
Slava Ukraini.
God bless America.
—
Gold $4610…Silver $75.50
Oil $102.20
Bitcoin: $78,360 [4:00 PM ET, Friday]
Regular Gas: $4.39; Diesel: $5.57 [$3.18 – $3.55 yr. ago]
Returns for the week 4/27-5/1
Dow Jones +0.6% [49499]
S&P 500 +0.9% [7230]
S&P MidCap -0.04%
Russell 2000 +0.9%
Nasdaq +1.1% [25114]
Returns for the period 1/1/26-5/1/26
Dow Jones +3.0%
S&P 500 +5.6%
S&P MidCap +10.1%
Russell 2000 +13.3%
Nasdaq +8.1%
Hang in there.
Brian Trumbore
