WS #6278
The dominant narrative remains the Iran war and its inflationary impact, with several key developments in this window. The US PCE inflation gauge jumped to 3.5% in March, the highest in nearly three years, driven by surging gas prices. This confirms the stagflationary pressure from the conflict and reinforces the Fed's hawkish stance. The UK raised its terror threat level to 'severe' following the Golders Green stabbing, adding a geopolitical risk premium. Oil prices remain elevated but showed intraday volatility, with Brent briefly touching $126 before falling back below $118. The IEA warned of potential physical jet fuel shortages in Europe as Middle East shipments have halted. On the corporate side, several earnings beats and analyst upgrades are notable: Parker Hannifin reported record backlog and raised guidance; Quanta Services rallied on infrastructure demand; Western Digital surged on AI memory demand; and Blue Owl Capital surged after disclosing 10x returns on its SpaceX investment. However, Meta's stock fell on concerns over high AI spending. The JANA Partners letter to Markel Group calling for divestiture and buybacks is an activist signal. The UK terror threat escalation and the PCE inflation data are the highest-significance items, as they directly impact macro sentiment and sector positioning.
Key developments
- US PCE inflation jumps to 3.5% in March, highest in nearly 3 years, driven by gas prices
- UK raises terror threat level to 'severe' after London stabbing
- Europe faces jet fuel supply crunch as Middle East shipments halt in April
- Parker Hannifin reports record $12.5B backlog, raises FY outlook
- Blue Owl Capital surges 10% after disclosing 10x return on SpaceX investment
- JANA Partners sends letter to Markel Group, calls for divestiture of Markel Ventures and $2B buyback
- Western Digital surges to all-time highs on AI data center demand and Seagate results
- Meta stock falls as investors fret over high AI spending despite strong earnings