Bulls vs Bears: EP 118 Peace, Love and Semiconductors
Week 10 of the US-Iran war and markets couldn't make up their mind. Oil swung between $90 and $114, Trump's peace memorandum raised then dashed hopes of a Hormuz deal, and the RBA hiked for the third time to 4.35%. Yet somehow, Wall Street hit all-time highs — powered by the…
The US-Iran war entered its 10th week and markets couldn't make up their mind. Oil swung violently between $90 and $114, Wall Street hit all-time highs mid-week before pulling back, and the RBA hiked for the third time in a row. Here's what you need to know. Hormuz: Still No Deal The week's dominant story was Trump's 14-point peace memorandum delivered to Tehran via Pakistani mediators. Markets surged on optimism — then gave it back when Iran called the plan "unrealistic." Brent crude spiked to $114 Monday after Iran attacked the UAE's Fujairah oil storage hub Oil plunged toward $95 Wednesday on peace deal hopes Thursday: explosions reported near a southern Iranian port, oil bounced back The Strait of Hormuz remains effectively closed — US gasoline is now above $4.50/gallon Trump-Xi summit scheduled for May 14–15 in Beijing adds urgency to a resolution Earnings Season: Best in Four Years Despite the geopolitical noise, corporate America delivered one of its strongest quarters on record. S&P 500 Q1 earnings growth tracking at 28.2% year-on-year — strongest since late 2021 Full-year 2026 earnings growth now forecast at 22.6% Nine of 11 S&P 500 sectors beating expectations AMD surged 18.6% — data centre revenue +57%, Q2 guidance smashed consensus Palantir reported 85% revenue growth, its fastest since going public Alphabet's cloud revenue +63%, closing in on Nvidia as the world's most valuable company Disney beat on streaming profits, theme park spend and new film releases AI: The $751 Billion Arms Race The hyperscaler spending commitment is now almost incomprehensible in scale. Five major US hyperscalers projected to spend $751 billion on AI in 2026 Cumulative AI infrastructure spend forecast at $7.6 trillion by 2031 Anthropic committed to spending $200 billion on Google's cloud and chips Samsung joined the $1 trillion market cap club, shares +14% on the week Intel surged 13% on reports Apple is exploring US-based chip manufacturing with Intel and Samsung RBA: Third Hike, Then Pause The Reserve Bank moved decisively but signalled it would now wait and watch. Cash rate hiked 25bps to 4.35% in an 8-1 vote — fully reversing last year's three premature cuts RBA base case: inflation peaks at 4.8%, GDP slows to 1.3%, unemployment drifts to 4.7% Governor Bullock warned federal and state governments against budget handouts that risk prolonging inflation Federal budget lands Tuesday May 12 — watch for cost-of-living measures and RBA's reaction Worst-case scenario (oil at $145): Australia "within a whisker of recession," unemployment at 5.1% $7 Billion in Suspicious Oil Bets A Reuters investigation found a pattern of well-timed short positions placed minutes before Trump's Iran announcements. Bets totalling ~$7 billion spread across ICE Brent, CME WTI, diesel and gasoline futures Four key dates: March 23, April 7, April 17, April 21 — all preceding major price-moving announcements On April 7 alone, $2.12 billion in short positions were placed 16 minutes before Trump announced a ceasefire, triggering a 15% oil price crash Both the DOJ and CFTC are now investigating Corporate Highlights Berkshire Hathaway — Cash pile hits record $397bn under new CEO Greg Abel; operating earnings +18% GameStop — Ryan Cohen launches audacious $56bn unsolicited bid for eBay; GameStop –10%, eBay +5% DigiCo (ASX) — Sells Chicago data centre for US$750m at a 5% premium; net debt falls from $1.5bn to $500m Coinbase — Slashing 14% of workforce citing AI-driven cost efficiencies and market volatility Arm Holdings — Disappointing royalty revenue on smartphone weakness; shares fell 10% despite AI data centre upside
Read on MPC Markets Mosaic
