Morning Report | Iran strike delay cools oil, yields on edge
$TLT yields stall, term-premium fears · $TLT foreign reserve selling chatter · $XLV TrumpRx expands, pharmacy pressure · $INTC 18A yields improve, foundry optimism · $SOXX storage capacity fears hit n
Market Pulse
U.S.-Iran War
3 events
Trump delays a planned Iran strike, trimming near-term war premium in crude while Hormuz constraints and policy waivers keep supply risks elevated.
Last 24 hours
Trump said he called off a “scheduled” U.S. strike on Iran after requests from Qatar, Saudi Arabia and the UAE, while warning forces remain ready for a large-scale assault if talks fail.
Early Tuesday, Brent fell about 1.9% to around $110 and WTI about 1.1% to around $107.5; some Hormuz shipping reportedly resumed but remains well below normal after the Feb. 28 war start.
The U.S. Treasury extended a 30-day waiver allowing imports of Russian oil already loaded on tankers at sea, limiting relief to in-transit cargoes and signaling case-by-case licenses for affected nations.
Market reaction
Crude pulled back on the delayed-strike headline, with Brent down roughly 2% to about $109.8–$110 and WTI down about 1.1% to about $107.3–$107.5; the same coverage tied elevated energy prices to inflation fears and a bond sell-off that pushed the U.S. 10-year yield to a one-year high on Monday.
Our view
Near-term de-escalation headlines cap immediate upside, but crude remains structurally supported by disrupted Hormuz throughput and elevated risk premia. Monitor any shift toward renewed strike timing or a deterioration in shipping flows, alongside whether U.S. waiver/licensing broadens beyond in-transit Russian cargoes.
What could change our view
Re-escalation into a large-scale assault or sharper Hormuz flow deterioration.
Sanctions relief expands beyond in-transit Russian barrels, easing balances more than expected.
Tickers: $CL=F
Macro & Policy Digest
Treasury selloff pauses near 10Y 4.61% and 30Y 5.14% as term-premium fears grow alongside evidence of foreign reserve-driven selling.
Last 24 hours
Early Tuesday, 10Y was ~4.607% (-1 bp) after Monday’s sharp selloff; 30Y ~5.143% flat, with a BofA survey showing 62% expecting 30Y to reach 6%.
March TIC data showed foreign Treasury holdings fell to $9.25T from $9.49T; Japan cut about $47B to $1.191T, China to $652.3B (lowest since 2008), while the U.K. added ~$29.6B.
Market reaction
Rates steadied after Monday’s surge: 2Y ~4.070% (-2 bps), 10Y ~4.607% (-1 bp) and 30Y ~5.143% flat; Brent -1.5% to ~$110.38 while WTI was around ~$108.67.
Our view
Long-end yields stay elevated and risk remains for renewed steepening as term-premium and supply/deficit concerns meet potential reserve-driven selling pressure. Next key monitor is whether April TIC confirms sustained liquidation alongside crude staying high enough to keep the inflation narrative bid.
What could change our view
April TIC shows foreign buying returning, easing flow-driven duration pressure.
Crude pulls back sharply, undercutting inflation fears that lift the long end.
Tickers: $TLT, $ZN=F
Warsh set to take the Fed helm Friday, shifting rate-cut signaling focus amid sticky inflation and a stable labor market.
Last 24 hours
The White House said Kevin Warsh will be sworn in as Fed chair Friday after Senate confirmation, replacing Powell, while investors watch for changes to guidance, dot-plot messaging, and risk-management framing.
Our view
The chair transition raises near-term policy-signaling volatility, but elevated inflation with stable labor conditions keeps the bar high for immediate easing. The key monitor is whether early Warsh communication materially shifts the Fed’s reaction function toward faster cuts versus “ample evidence” on inflation.
What could change our view
Warsh quickly signals accelerated cuts despite inflation not clearly trending to 2%.
Inflation persistence forces a more restrictive stance, extending higher-for-longer expectations.
Tickers: $ZN=F
TrumpRx.gov broadens into generics with price-routing and delivery links, elevating competitive pressure on retail pharmacies and cash-pay drug discount intermediaries.
Last 24 hours
The White House added 600+ generic drugs to TrumpRx.gov and launched tools steering users to the lowest local price or home delivery, integrating Cost Plus Drugs, Amazon Pharmacy, and GoodRx as partners.
Our view
This is an incremental transparency and routing change, with the biggest near-term impact concentrated in cash-pay generics rather than broad insured demand. Monitor whether the administration reports sustained usage growth beyond the cited 10M visits and $400M savings, and whether partner integrations expand into more categories.
What could change our view
Broader expansion beyond cash-pay into insured pathways materially shifts volume and pricing pressure.
Partners or major pharmacies change participation terms, limiting routing or price comparability.
Tickers: $XLV
Company Events
Semis split as Intel flags improving 18A foundry yields while storage names sell off on capacity lead-time worries despite AI demand.
Last 24 hours
Intel CEO Lip-Bu Tan said external foundry traction is improving, citing 18A yields rising ~7%–8% per month and expecting multiple customer commitments in 2H, extending into early 2027.
Seagate slid more than 6% after its CEO warned capacity additions via new factories or machines take too long; Micron, SanDisk and Western Digital were reported down about 5%, highlighting limited near-term supply flexibility.
Market reaction
Memory/storage sold off: Seagate fell more than 6%, with Micron, SanDisk and Western Digital reported down roughly 5% in the same session on capacity expansion lead-time concerns.
Our view
Expect continued semi dispersion: Intel’s narrative can improve into 2H if commitments firm up, while storage/memory remains headline-sensitive as the market re-prices near-term capacity constraints. The next key check is whether 2H foundry commitments materialize and whether lead-time limits show up in forward shipment visibility.
What could change our view
18A yield momentum fades or customer commitments slip beyond 2H and early 2027.
Storage demand fails to outrun visibility window, undermining the capacity-constraint re-rating.
Tickers: $INTC, $SOXX
AI infra buildout widens as Blackstone-Google launch a U.S. compute JV and Johnson Controls backs modular data centers for faster deployments.
Last 24 hours
Blackstone will commit $5B of equity to a new U.S. AI-infrastructure venture with Google supplying TPUs; first 500MW of compute capacity is targeted online by 2027.
Armada raised a $230M Series B at a $2B valuation; Johnson Controls invested and will manufacture ‘Leviathan’ modular data centers at a 400,000-sq-ft Arizona plant starting this summer.
Our view
Capital and industrial capacity continue to flow into AI compute and data-center supply chains, supporting sustained demand for infrastructure platforms and thermal/power enablers. Monitor execution markers—JV site build progress toward 2027 capacity and the Arizona factory’s production ramp starting this summer—for evidence the pipeline is converting into deliverable megawatts.
What could change our view
Delays or scaling shortfalls push the 2027 500MW target materially out.
Modular plant ramp fails to meet planned summer start or throughput.
Tickers: $BX, $JCI
NextEra agrees to buy Dominion in a ~$67B all-stock deal, pitching scale and Northern Virginia data-center exposure into AI-driven load growth.
Last 24 hours
NextEra announced an all-stock acquisition of Dominion valued at about $67B, with 74.5%/25.5% ownership split, leadership roles set, and a 12–18 month close subject to federal/state approvals and shareholder votes.
Market reaction
Initial reaction cited: Dominion shares up more than 9% while NextEra fell more than 4%.
Our view
The deal drives near-term idiosyncratic dispersion between NEE and D, with NEE trading the integration/regulatory discount and D reflecting a clearer takeout path. Watch the regulatory and shareholder approval timeline over the next 12–18 months for signs of delay or remedy demands.
What could change our view
Regulatory or state commission pushback extends timeline or forces material concessions.
Shareholder opposition disrupts terms or blocks the all-stock transaction.
Tickers: $NEE
Meta starts a fresh layoff round Wednesday while raising 2026 AI capex plans, sharpening the margin-versus-execution debate in Big Tech.
Last 24 hours
Meta plans to begin layoffs Wednesday targeting roughly 10% of staff (~8,000) and to scrap about 6,000 open roles, while lifting 2026 capex guidance up to $145B.
Our view
META’s opex tightening supports near-term margin resilience even as AI infrastructure spending stays elevated. Next watchpoint is whether additional capex increases or organizational churn emerge as compute needs are reassessed.
What could change our view
Further capex hikes beyond current 2026 guidance overwhelm opex savings.
Retention and execution setbacks from repeated workforce cuts slow AI roadmap delivery.
Tickers: $META
Home Depot’s Q1 beat and reaffirmed FY sales outlook keeps U.S. consumer DIY resilient but soft transactions and margin pressure linger.
Last 24 hours
Home Depot reported adjusted EPS $3.43 on revenue $41.77B (+5% YoY) and reaffirmed FY2026 sales growth +2.5% to +4.5%, while comparable transactions fell 1.3% and gross margin missed StreetAccount.
Our view
We expect HD to hold its FY2026 outlook as Pro exposure and revenue momentum offset deferred big-ticket homeowner projects. Monitor whether transaction declines and margin pressure persist; sustained deterioration would challenge the up-to-4% adjusted EPS growth guide.
What could change our view
Further comparable-transaction declines force a cut to FY2026 sales guidance.
Gross margin pressure worsens from category mix and continued project deferrals.
Tickers: $HD
Sanofi’s efdoralprin alfa Phase 2 in AATD outperformed plasma-derived augmentation therapy, boosting functional AAT durability on a three‑weekly regimen.
Last 24 hours
At ATS 2026, Sanofi reported ElevAATe Phase 2 in 97 AATD patients: efdoralprin alfa Q3W met the primary endpoint (p<0.0001), kept fAAT above 23.8 μM for 100% of days, and had no discontinuation-causing TEAEs.
Our view
We view the dataset as supportive for advancing efdoralprin alfa, with Q3W dosing emerging as the lead regimen given durability and tolerability signals versus pdAAT. Next focus is whether these functional AAT gains translate into clinically meaningful outcomes and remain consistent with broader safety in later-stage trials.
What could change our view
Later-stage trials fail to confirm durability above normal threshold versus standard therapy.
Safety profile worsens, including higher COPD exacerbations or immunogenicity with repeated dosing.
Tickers: $SNY
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