CWS Market Review – May 19, 2026
Posted by Eddy Elfenbein on May 19th, 2026 at 6:13 pm

(This is the free version of CWS Market Review. If you like what you see, then please sign up for the premium newsletter for $20 per month or $200 for the whole year. If you sign up today, you can see our two reports, “Your Handy Guide to Stock Orders” and “How Not to Get Screwed on Your Mortgage.”)

For the third day in a row, the Nasdaq closed lower than where it had been the day before. Also, for the third day in a row, the Nasdaq trailed the overall market.

Normally, this is a fairly benign event. This time, however, it’s notable because the tech sector has been phenomenally strong for so long that any weakness, even minor stuff, gets my attention.

There’s a growing chorus on Wall Street that’s eager to declare this market a bubble. Maybe, but that’s a game I try to avoid. However, I will concede that if there were a bubble, this is pretty much how I’d expect it to begin.

What do I mean by that? Let’s start with the bond market. Historically, the bond market leads the stock market by a few months—usually around six months, sometimes more, sometimes less, but almost always, it’s first.

Lately, the bond market hasn’t looked so good. You can tell when investors run screaming from safe assets and plunge head-first into risky ones that everything might not be so kosher. That’s been the story of the last six weeks, and it may be unwinding.

Things are changing, albeit slowly. Indeed, yields on longer-dated Treasuries have been creeping higher. The yield on the 10-year Treasury is getting close to 4.7%. In February, it was under 4%. The yield on the 30-year Treasury is the highest it’s been since 2007.

At some point, investors will wonder if it’s easier to park their money in a safe Treasury and make a boring 4.7% versus riding a chaotic and overpriced stock market. The volatility doesn’t bother me much, but I know it bothers some investors, and it doesn’t take much to trigger a sector rotation.

Here’s a look at the Long-Term Treasury ETF (TLT):

Strategists at Barclays and Citigroup both said that the 10-year yield could hit 5.5%. That would be a big deal. We haven’t seen these levels in over 20 years.

Think of the financial markets as an endless tug-of-war between safe and secure bonds versus riskier stocks. You know something’s up when one side completely creams the other, and that’s what’s happened this year. Stocks soared and bonds did nothing. Now the attractiveness of bonds is starting to show.

It doesn’t end there. Higher yields will also cause problems for the Federal Reserve. A good way of guessing what the Fed will do is to keep an eye on the two-year Treasury yield. The two-year yield has a habit of doing whatever the Fed does, just a little bit sooner.

The two-year yield has drifted up to 4.1%. Meanwhile, the Fed’s current range for interest rates is 3.5% to 3.75% (see below). This suggests that the market is putting pressure on the Fed to hike rates. Of course, it doesn’t mean that the Fed will follow, but the market doesn’t like being ignored.

As far as interest rates go, for now, the futures market is a doubter. The latest futures prices see the Fed hiking rates once before the end of the year. President Trump has said he wanted to see rates go down to 1%. I’m not so sure he’ll get his wish.

Tomorrow, the Fed will release the minutes from its most-recent meeting. The Fed minutes is normally the dullest report you can possibly imagine, but this new one might actually be a tiny bit interesting. That’s because there were four dissenting votes in the last policy statement.

I should explain that the Fed hates dissension. Even where there’s disagreement, the Fed will often defer to whatever the Fed chairman wants while making their objections known privately. One or two dissenting votes is rare but four is highly unusual. It’s the most dissenting votes in 34 years.

The other issue is that Jerome Powell is hanging around at the Fed, but not as chairman. Kevin Warsh has officially taken over that role. Could the Fed gradually have, in effect, competing Fed chairs? What happens if most members of the FOMC follow what Powell advocates instead of Warsh? It could happen. There’s no rule that says they can’t.

There’s also no rule that says that stocks and bonds can’t move in opposite directions, and that’s what we’ve seen. Not only do we see this risk divided between the markets, but we also see it within the markets. For example, value stocks have finally perked up after being trounced for so long by growth stocks.

Boring stocks are suddenly in. If you recall in last week’s issue, I told you about Sprouts Farmers Market. The stock gapped up 6.5% after the last earnings reports. Well, it didn’t stop there. The stock gained 3.5% yesterday, plus it was up over 7% today before it pulled back. SFM is now up 30% off last month’s low.

Beyond the optimistic earnings report, nothing has changed with SFM. It’s just that investors are finally more welcoming to stocks like Sprouts.

Weakness at the Big Boxes

This morning, we got a report that homebuilder confidence rose in May, but that’s coming off a steep low. The housing market is still soft, and many homebuilders are cutting prices to keep their sales going.

The report on pending home sales also increased by a bit, but here, too, there are some growing problems just under the surface. The major problem is affordability, and many potential buyers have been priced out of the market. Rising energy prices have also been a factor as that takes a big bite out of consumers’ finances.

Home Depot (HD) reported its earnings earlier today. In my mind, this is probably a better report on how the economy is really doing than most government reports.

For the three months ended on May 3, HD said that its same-store sales rose by just 0.6%. That’s not so hot. If more Americans are upgrading their homes, that’s a good signal of future growth. Home Depot’s CFO, Richard McPhail, said, “There’s no question that the average consumer is feeling pressure from rising fuel costs.”

On the plus side, HD maintained its full-year guidance, but I can assure you that higher rates will not help HD’s business. More earnings from the big box boys are to come. Target (TGT) reports tomorrow and Walmart (WMT) reports on Thursday.

Fly Me to the Moon…

At some point in the next few weeks, SpaceX will have its initial public offering. This has caused confusion for many on Wall Street.

On one hand, the company is obviously massively overpriced, but that calculation is based on conventional evaluation models and with Elon Musk, as usual, we’re dealing with something highly unconventional.

So the question is, how can you value SpaceX at all? One fact we’ve learned is that betting against Elon Musk has proved to be a risky proposition.

The company doesn’t have a ticker symbol yet, but SPCX seems to be the front runner. There’s also no IPO date yet, but rumors say it could be as early as June 12. Another possibility is June 28 which is Elon’s birthday. There’s also talk of the company having a five-for-one split ahead of the IPO.

We do know that after the IPO, Musk will own around 40% of the outstanding shares. Moreover, he has said that he has no plans to sell any stock. This means that if the company is given a value of say $1.5 to $2 trillion, that would make Musk the world’s first trillionaire. By trillionaire, we mean a person who is a millionaire one million times over.

For now, FOMO, the fear of missing out, seems to have overridden everything. No one wants to be left behind, especially when it involves Elon Musk.

Bank of America has already developed a basket of 35 stocks that are tied to the emerging space market. Of course, the connection that many of these companies have can be very faint. As long as it says “space” in their business models, investors will be interested.

I’m a fan of SpaceX, but I can’t say that I’m an eager investor. I’d love to be proven wrong.

That’s all for now. There will be no newsletter next week. I’m taking off in honor of Memorial Day. We’ll be back on June 2 with our next issue of CWS Market Review.

– Eddy

Morning News: May 19, 2026
Posted by Eddy Elfenbein on May 19th, 2026 at 7:05 am

Congress Should Stop Dodging Its Responsibilities on Iran

Why the Iran War Is a Boost for Stalled Russia-China Gas Pipeline

Powell Was Great. The Federal Reserve’s Policy Messaging Was Not

US Yields Flirting With 2007 Highs Entice and Divide Investors

Citi Says 5.5% May Be Next Focus for 30-Year Treasury Yield

Citi Partners with BlackRock’s HPS for $17.5 Billion Private Credit Program

Crypto Crime Escalates With Kidnappings, Cons and Human Coercion

U.S. Prosecutors Drop Fraud Charges Against Billionaire Indian Businessman Gautam Adani

The Economist Who Taught Me There Is No Growth Without Risk

No ‘Debt Denialism,’ Mitch Daniels, Just a Focus On Markets

The AI Boom Is a Dilemma for Retail Investors

AI Rollout to Boost Metals-Rich EM Currencies, Barclays Says

Basic Economic Principles Call for More U.S. Housing

Build More Houses, Don’t Let Congress Pick the Buyers

They Say It’s a Tax on Millionaires. It Won’t Stay That Way

Demand for Fast-Track Credentials Drives Executive Education Market

The Biggest Challenge of a Utility Megadeal: Regulators

Meta Goes Big on the Bayou

StanChart to Cut Over 7,000 Jobs, Boost AI to Replace ‘Lower-Value Human Capital

Google and Blackstone to Create New AI Cloud Company

As OpenAI Celebrates Court Win Against Musk, Other Challenges Lie Ahead

Elon Musk Offered to Pay Employees for Their Tax Returns, You Can Probably Guess What Happened Next

Bipartisan Bill Would Impose New Annual Fee on Electric Vehicles

Home Depot Posts Lower Profit as Homeowners Hold Off on Large Projects

Target Plans to Name a New Supply-Chain Head as It Struggles With Weak Sales

How Zyn Became All the Rage Inside Trump World—Including With RFK Jr.

Calls for ‘No Seed Oil’ Push Companies to Order Up Butter and Beef Tallow

Marc Jacobs and LVMH Kick Off the Great Luxury Garage Sale

Swatch’s New Watch Debut Descends Into Chaos

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Morning News: May 18, 2026
Posted by Eddy Elfenbein on May 18th, 2026 at 7:02 am

China’s Economy Unexpectedly Weakens as Iran War Fallout Mounts

Xi Teaching Trump Thucydides? Good Luck

G7 Finance Ministers Look to Contain Iran Economic Fallout

Global Bond Yields at Multiyear Highs on Mounting Inflation Risk

Ukraine’s Wartime Economy Has One Hedge Fund Holding the Keys

The Economy Kevin Warsh Is Inheriting Is Not the One He Wanted

Inflation Uptick Is Starting to Send Sell Signals to Stock Bulls

Just What Exactly Do Conservatives Think Inflation Is?

Misread Signals: The 1970s Inflation Bogeyman Isn’t Back

U.S. Debt Is Now Bigger Than the Economy. That’s Not the Real Problem

Commerzbank Formally Rejects UniCredit Takeover Offer

UBS Says Clients Expect Firms Axing Net Zero to Face Market Hit

Britain’s Chaos Is a Big Red Flag for Europeans

Catastrophe Is Emerging in the World’s Most Vulnerable Places

The Iran War Is Crippling One of the World’s Wealthiest Nations

Oil Prices Edge Higher as Cease-Fire Remains Tenuous

The Oil Shock Is Causing a $45 Billion Rupture in the Economy

The World Can’t Get Enough U.S. Energy, Keeping Prices High for Americans

High Prices Are Making Oil Even ‘Sexier’ For Thieves — Now Texas Is Wrangling with Cloned Trucks and Exploding Pipelines

NextEra to Buy Dominion Energy in $67 Billion Deal

Fix America’s Power Grid by Giving People Power

How the European Union’s Tech Policy Threatens Consumers

SpaceX’s Mega-IPO Puts a Price Tag on the Fear of Missing Out

I Have Seen the Future of Physical AI in Dusty West Texas

The Villain of This Year’s Commencement Speeches: A.I.

Can AI Drug Development Live Up to the Hype?

Senators Work to Ban Gambling Ads Targeting Minors

Baidu’s Profit Slides Again Amid Slow AI Payoff

For Retailers, It’s One Battle After Another

Shoppers’ Frenzy for ‘Royal Pop’ Pocket Watches Forces Swatch to Shut Stores

The World Is Awash in Bourbon. That’s a Problem for Big Booze

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Morning News: May 15, 2026
Posted by Eddy Elfenbein on May 15th, 2026 at 7:13 am

Trump Touts ‘Fantastic Trade Deals’ With China, but Details Are Scarce

Trump Announces Boeing Jet Order From China. Beijing Stays Silent.

Nvidia’s Future in China Remains Unclear After Trump-Xi Summit

Kishore Mahbubani: ‘China Can No Longer Be Stopped’

US Needs Another Decade to Fix $1.2 Trillion Rare Earth Crisis

Spies, Sanctions, Cyberattacks: China and the U.S. Clash Behind the Scenes

Oil Prices Climb on Fears of Broader Energy Crunch

The World Is Burning Through Its Oil Safety Net

Aramco Cracks Open Its Empire to Wall Street in $35 Billion Push

Why the Price of Gas Is the Most Important Number in US Politics

It’s Not Just U.S. Stocks. A.I. and Oil Are Moving Global Markets, Too

Global Bond Selloff Worsens as Rising Oil Prices Spook Investors

How Many Temporary Shocks Make a New Inflation Trend?

Why the Stock Market Keeps Rising

As Powell Steps Down, the Fed Confronts ‘Regime Change’

Jerome Powell’s Critics Fail to See the Big Picture

Kevin Warsh on the Fed, in His Own Words

The Fed’s Next Challenge Is Main Street Confidence

Trump Ethics Filing Reveals Thousands of Trades Tied to US Corporate Securities

JPMorgan’s Bet on Early-Stage Companies Pays Off in Leading Global Tech Investment Banking

Winklevoss-Founded Gemini Shares Surge After Founders’ $100 Million Lifeline

The Entirely Made Up Claim That Corporations Pay No Taxes

The Sleepless, Lonely, Ridicule-Paved Path to Billionaire

In This Job Market, Women Have the Upper Hand

America Is Addicted to Disposable Work

Andy Jassy Is Rewriting Amazon’s Playbook for the AI Age

Don’t Throw Out the Keyboard in the AI Revolution

To Prosper In Space, We Must Put the Private Ahead of Flight

Used EVs Are Now the Most Affordable Cars. Here’s How to Buy a Good One.

Honda’s Never Faced a Crisis Like This—and a Comeback Won’t Be Easy

Sundays Are Sacred at Chick-fil-A. The U.S. Says a Worker’s Saturday Sabbath Is, Too

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Morning News: May 14, 2026
Posted by Eddy Elfenbein on May 14th, 2026 at 7:07 am

Oil Prices Waver as Trump Meets China’s Xi

Donald Trump and Marco Rubio Well Overstate Iran’s Oil “Leverage”

Trump-Xi Summit Seeks to Cement Stability After Rocky Stretch for Trade Ties

What Is The Thucydides Trap and Why Did Xi Raise It With Trump?

US Efforts to End Iran War Stumble as Ship Seized Near UAE

Europe Plays Catch-Up in Africa as Emerging Powers Boost Investment

How Eight Tumultuous Years Pushed Jerome Powell and the Fed to the Limit

What the New Head of the Federal Reserve Will Inherit

Boston Fed’s Collins Flags Rate-Hike Scenario as Inflation Risks Tilt Higher

The Same Hidden Mistake In Every Forecasting Failure

Crypto Industry Is Pushing a Bill to Tilt Regulation in Its Favor

JPMorgan’s Bet On Early-Stage Companies Pays Off In Leading Global Tech Investment Banking

The DOJ’s Comey Indictment Goes Way Too Far

Of Course the South’s Redistricting Rush Isn’t ‘Race-Neutral’

China’s Best and Brightest Tech Talent Is Going Back to China

How to Build a Data Center in Space

Forget Grok. Musk’s AI Edge Is Infrastructure, Not Software

AI Chipmaker Cerebras Raises $5.55 Billion in Year’s Biggest IPO

Ford Is Becoming an AI Stock — Sort Of

Honda Posts First Ever Annual Loss After Pullback From E.V.s

Nuveen Backs Startup With $500 Million of Funds for Clean Energy

Can Some Very Tiny Particles Cool the Planet? One Tech Company Says Yes.

Geothermal-Champion Fervo Energy’s Shares Soar in Trading Debut

Versant Shares Surge Premarket as Company Beats Wall Street Expectations

Can Microdramas Save Hollywood?

GLP-1 Users Are Taking a Bite Out of the Restaurant Business

Death to the $20 Cocktail: The Bars Bringing Back Cheaper Drinks

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Morning News: May 13, 2026
Posted by Eddy Elfenbein on May 13th, 2026 at 7:04 am

Oil Inventories Falling at Record Pace on Iran War, IEA Says

IEA Warns Recovery From Hormuz Supply Shock Will Take Months

Undersea Internet Cable Projects Are Getting Tangled in the Iran War

India Allocates $4 Billion to Support Converting Coal to Gas

China’s Secretive Missile Program Is Making Dozens of Companies Rich

Trump’s Shrinking Ambitions on China

Trump’s Trade War With China: How We Got to a Stalemate In 3 Numbers

Nvidia’s CEO Joins Trump in China With AI in the Spotlight

How China Could Wield Its Control of Rare Earths Against Trump

China’s AI Suppliers Can’t Keep Up as Component Shortages Bite

China’s $3 Billion US Clean Tech Exit Is an Investment Warning

Equinox, Orla Agree to Form $18.5 Billion Gold Major

Carney’s Pivot From US Is Dependent on High Gold, Oil Prices

What You Need to Know About the Federal Gas Tax

Prices at the Pump Are Wiping Out Wage Gains

To Dot or Not? Warsh’s First Fed Rate Projection Could Out His Views to The Public – And Trump

Why a Warsh-Led Fed May Keep Interest Rates Steady

Morgan Stanley Hikes S&P 500 Target to 8,300 on Earnings Boom

Investors Benefit From More Financial Data, Not Less

With Inflation on Rise, I Bonds Look Like a Good Place to Park Cash Again

Trump on US Banknotes? A Social Media Post Spurs Speculation

Apollo’s Pricing Plan Will Transform Private Credit

Anthropic’s Mythos Sends US Banks Rushing to Plug Cyber Holes

Please Stop, There’s No Such Thing As a “Bubble”

The U.S. State With the Most Population Growth, and Why It Grows

San Francisco’s Luxury Housing Boom Is a Warning

Even Silicon Valley’s Congressman Wants to Rein in AI

Lake Tahoe Power Crunch Shows AI’s Growing Energy Toll in West

Tomato Prices Soar as War, Tariffs and Weather Affect a Popular Crop

The Rising Impact of “Nuclear” Verdicts on Consumer Prices

China’s ‘Two Billion Feet’ Are Suddenly Running From Nike

Teens Helped Bring Malls Back to Life. Now They’re Getting Banned.

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CWS Market Review – May 12, 2026
Posted by Eddy Elfenbein on May 12th, 2026 at 7:11 pm

(This is the free version of CWS Market Review. If you like what you see, then please sign up for the premium newsletter for $20 per month or $200 for the whole year. If you sign up today, you can see our two reports, “Your Handy Guide to Stock Orders” and “How Not to Get Screwed on Your Mortgage.”)

It’s hard not to be impressed by the market’s recent rally. Through yesterday, the Nasdaq jumped more than 26% in six weeks, but this rally has been heavily skewed to tech stocks. Make that very heavily skewed. If we exclude tech names, then the market was up just 8.5% over those six weeks.

Today was one of the first days in a long time that the Nasdaq finally got some pushback. Here’s a remarkable stat: Ending on Friday, The Nasdaq Composite has outperformed the S&P 500 20 times in 24 days. The S&P 500 retreated today after closing at an all-time high on Monday.

There are a lot of folks out there sounding the “bubble alarm.” I prefer to ignore scaremongering. Peter Lynch famously said, “Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves.”

Decent Jobs Report with Some Red Flags

On Friday, the Bureau of Labor Statistics said that the U.S. economy created 115,000 net new jobs last month. That’s not bad. Economists had been expecting a gain of 55,000. April’s number was down from March, but that month was unusually strong with a gain of 185,00 new jobs.

As good as the report is, there are a few worrying items. For example, one problem spot is wages. Last month, average hourly earnings rose by just 0.2%. That was 0.1% lower than expected. Over the last year, earnings are up by 3.6%. That’s less than inflation, but not by much (I’ll have more on inflation in a bit). The overall unemployment rate held at 4.3% which is still low. It appears that we’re still in the no-hire, no-fire economy. Here’s a look at nonfarm payrolls. The line appears to be cresting:

Another concern is that the labor force is getting smaller. Also, the number of tech jobs is falling.

Here are some details:

Following recent trends, healthcare led with 37,000 new positions, though multiple other sectors also saw gains.

Transportation and warehousing added 30,000, retail rose by 22,000, and social assistance saw a gain of 17,000.

On the downside, information services lost 13,000, part of a continuing trend that has seen the category down 342,000 jobs since November 2022, coinciding with the rise of artificial intelligence. That has equated to a loss of 11% of jobs during the period.

The broader U-6 rate inched upward to 8.2%. The labor force participation rate dipped to 61.8%. That’s the lowest in close to five years. The jobs figure for March was revised upward by 7,000 while February was revised downward by 23,000 to a loss of 156,0000.

I don’t want to sound alarmist. The labor force is fine for now. My concern is if it will remain so in another six months. Frankly, those wages numbers need to get better.

The futures market doesn’t see the Fed making any changes on interest rates for the rest of this year, and they’re probably right. This week, the Senate looks to vote on Kevin Warsh’s confirmation to be the new Fed chairman. Jerome Powell’s term as Fed chairman expires on Friday, but he will stay at the Fed as a governor. The last Fed policy statement had the highest number of dissenting votes in 34 years. Get the popcorn, this could get interesting.

Inflation Hits a Three-Year High

This morning, we got the CPI report for April, and it wasn’t very good. Last month, headline inflation rose by 0.6% (yikes!) and the 12-month inflation rate is now at 3.8%. That’s the highest since May 2023. Wall Street had been expecting a monthly increase of 0.6%.

Of course, high energy prices are a significant factor, but even discounting that, inflation is still a problem. For April, the core rate, which excludes food and energy, rose by 0.4%. Over the last year, core inflation is running at 2.8%.

Here’s a look at gasoline prices via Gas Buddy:

The numbers from the energy sector are shocking. Last month, energy prices rose by 3.8% and food prices were up by 0.5%. For the last 12 months, energy prices are up 17.9%, and gasoline is up 28.5%. As always, bear in mind that energy prices impact everyone.

From CNBC:

Shelter costs rose 0.6% after easing in prior months, indicating that inflation is a problem beyond the Iran war impacts. The tariff-sensitive apparel category increased 0.6% and airline fares accelerated 2.8%, putting the 12-month gain at 20.7%. Tariffs also seemed to hit other areas, with household furnishings and operations up 0.7%.

New vehicle prices fell 0.2% while the index for used cars and trucks was flat. Medical care costs decreased 0.1% and hospital services were down 0.3%. Health insurance also declined 0.4%, while motor vehicle insurance increased 0.1%.

The report also contained bad news for workers, as real average hourly wages slipped 0.5% for the month and fell 0.3% annually.

These numbers put the Fed in a difficult spot. It’s as if the economy needs higher and lower rates at the same time. It needs higher rates to curb any inflation, but lower rates to prevent the labor market from deteriorating.

The Atlanta Fed’s GNDNow model currently sees Q2 GDP tracking at 3.7%. That’s high. If that’s right, then the economy is doing much better than expected. We’ll learn more later this week when the retail sales report comes out. Then on Friday, we’ll get the latest report on industrial production.

Sprouts Soars on Strong Earnings

Since we just finished the Q1 earnings season, I wanted to share our big winner with you, and that was Sprouts Farmers Market (SFM). Sprouts is new to our Buy List but it’s already making a splash.

Sprouts’s business idea is simple: take the look and feel of a farmer’s market and bring it indoors. Think of a big open space, but instead of waiting until the weekend, you can go to Sprouts any day of the week. Sprouts specializes in fresh and organic produce.

I’m particularly impressed by Sprouts’s loyal fan base. Sprouts tends to be less expensive than Whole Foods (owned by Amazon). Its smaller stores aren’t as crowded as Whole Foods, and Sprouts has found an overlooked part of the market: people who want good, fresh, organic produce but not at Whole Foods’s prices.

After the closing bell on April 29, Sprouts said it made $1.71 per share for its fiscal Q1. That’s for the 13-week period ending on March 29. The stock jumped 15% the next day. The CEO said the quarters “played out largely as we expected.”

SFM’s Q1 sales were up 4% over last year. The key figure is that same-store sales were down 1.7%. That’s not good, but it shows some signs for optimism. During the quarter, the company owned six new stores, which brings the total to 483 stores.

For Q2, Sprouts sees earnings between $1.32 and $1.36 per share and same-store sales growth between -2% and flat.

For all of 2026, SFM sees same-stores sales growth between -1% and +1% and earnings between $5.32 and $5.48 per share. The shares have rallied another 6% since the big jump after its earnings. I currently rate Sprouts a buy up to $90 per share.

That’s all for now. The retail sales report is due to come out on Thursday. It will be interesting to see if the war in Iran has had an impact on shopping. I’ll have more for you in the next issue of CWS Market Review.

– Eddy

Morning News: May 12, 2026
Posted by Eddy Elfenbein on May 12th, 2026 at 7:12 am

Oil Prices Rise on U.S.-Iran Standoff

EU Seeks to Overcome Complacency in Global Race for Rare Earths

Don’t Buy the Hype on a US-Brazil Rare Earths Deal

A Startup Confronts Water Shortages by Pulling It Out of the Air

China Increasingly Views Trump’s America as an Empire in Decline

How the U.S. Is Trying to Ensure the Dollar’s Dominance During Economic Turmoil

Korea Roils Market by Floating ‘Citizen Dividend’ From AI

Bond Market’s Warsh Trade Falls Apart as Oil Fans Inflation Risk

Wall Street Puts Blockchain to Work in $13 Trillion Repo Market

Private Credit Funds Slash Loan Values as Borrower Stress Rises

JPMorgan’s Markets Business Is Booming After Record Quarter

JPMorgan and the Delicate Art of Paying Off Employees

Your Financial Advisor May Cost More Than Your Doctor

If the Kids’ Future Were Doomed, There Would Be Very Little Debt

Why Is There So Much Anger at the Weatlhy?

EBay Spurns GameStop’s Bid as ‘Neither Credible Nor Attractive’

Nvidia’s Huang Loses Out on Trump’s China Travel Plans

China Earns $500 Million an Hour From Exports Supercharged by AI

The Tiny, Essential Building Blocks Powering the AI Boom

AI’s Big Guns Have a Serious Inflation Problem

Sam Altman’s Business Dealings Under GOP Scrutiny Ahead of OpenAI’s IPO

Is AI Coming for Your Job? A Bigger Government Can Help

RIP, Liberal Arts Colleges. Long Live the Liberal Arts

Boeing Bets Its Comeback on Trump, China and an Elusive New Plane

Obesity Drug Prices Undercut Healthcare Savings, CVS CEO Says

How an ‘Impossible’ Idea Led to a Pancreatic Cancer Breakthrough

Steel Tariffs Are Harming Tin Can Makers and Lifting Food Prices

President Trump Plans to Reduce Tariffs on Cheap Beef Imports. Is He Treating the Symptom, Not the Disease?

The Iran War Is Taking the Color Out of Japan’s Best-Known Snack Bags

Streaming, Toilet Paper, Underwear: Subscription Fatigue Is Setting In

A Chaotic and Politicized World Cup Lumbers Toward Kickoff

YouTube Plays Matchmaker for Sponsors and Stars

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Morning News: May 11, 2026
Posted by Eddy Elfenbein on May 11th, 2026 at 7:09 am

Dangote Said to Seek $50 Billion IPO Valuation for Refinery Arm

BP Is Winning Back Stock Analysts as Buy Ratings Double

Think $6 Gas Is Bad? It’s About to Get Even Worse in California

Modi Asks Indians to Stop Buying Gold, Hitting Jewelry Stocks

China’s Policies Threaten $650 Billion in G-7, US Chamber Says

As Trump Heads to Beijing, China Is ‘Locked and Loaded’ for a Fight

Bessent’s Deep Grasp of Japan Policy to Challenge Takaichi

Donald Trump Vs. Jerome Powell: Keynesian Vs. Keynesian

The Fed Chair Who Fought Back

Ossoff’s Corruption Message Goes Beyond Trump

Ted Turner Was a Cool Contrast to Today’s Oligarchs

Hedge Funds Make Their Move as Litigation Finance Assets Slump

Private Equity’s New Tax Fight

Private Credit: What Advisors Must Do as the SEC Steps In

KKR Injects $300 Million Into Struggling Private Credit Fund

Consumers Lean on a ‘Hamster Wheel’ of Credit to Manage Rising Costs

A Changing Job Market Leans Against Men

Why Two Big Companies Just Cut Paid Family Leave

Why One of the Nation’s Largest Auto Lenders Isn’t Worried About High Vehicle Prices Or ‘Forever Loans’

The Most Common Tax Traps in Retirement — and How to Avoid Them

Business Schools Need Cash. Some Are Counting on Executive Education

With Just One Word, Brandeis Is Trying to Change College Shopping

Microsoft’s Marquee African Data Center Hits Political Stalemate

Behind the Claude Frenzy That Ate Up All the Mac Minis

How a Job at OpenAI Became the Greatest Lottery Ticket of the AI Boom

Parenting Teens in the Age of AI Means Choosing Trust Over Control

The World’s Highest-Flying Repo Men Are Collecting Spirit Airlines’ Jets

Spirit Was the Only Airline in Town. Now What?

World Cup Cities Were Wrong to Ever Expect a Big Payoff

Retailers Are Making Expensive Bets That Shoppers Still Want to Go to Stores

Apollo Strikes Deals for Two Live-Events Businesses

Wordle to Become Primetime TV Show, With Savannah Guthrie as Host

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CWS Market Review – May 8, 2026
Posted by Eddy Elfenbein on May 8th, 2026 at 7:08 am

“We suffer more in our imagination than in reality.” – Seneca

It’s hard to not be impressed by this latest market surge. As you know, I’m not one for predicting bubbles, but things are getting a bit unreal.

Since March 30, the S&P 500 has gained 15% while the Nasdaq is up more than 24%. Over that time span, the S&P 500 Tech ETF is up by 33% while the non-tech part of the index is up a scant 9%.

It’s an odd market when you’re up by 9% in a little over a month and yet feel that you’ve badly underperformed the market.

Crude oil fell recently on the hopes that some deal can be reached between Iran and the U.S. regarding the Strait of Hormuz. Consumers are feeling stretched. Shares of Whirlpool got clocked on Thursday after the appliance maker said that its business has run into a brick wall.

The New York Fed released a report this week that said that lower-income folks are feeling the pinch of higher gasoline prices.

So far, this has been a good earnings season for our Buy List. Except for American Water Works and Stryker, every stock either beat or met earnings.

Last Friday, IES Holdings had a blowout earnings report and the shares rallied to a 52-week high. Allison Transmission beat earnings by more than 20%. Henry Schein beat earnings and reaffirmed guidance. McKesson beat earnings and offered strong guidance.

FactSet gave us a nice dividend hike. This is the 27th year in a row that FDS has raised its dividend. Cencora beat earnings and raised guidance, but it lowered its sales forecast. I’ll go over the details in a bit. But first, let’s look at our final Earnings Calendar for Q1.

Q1 Earnings Calendar

Here’s our complete earnings calendar for the first quarter of 2026:

Five Buy List Earnings Reports

Last Friday, shortly after I sent you last week’s issue, IES Holdings (IESC) reported its fiscal Q2 earnings. For the quarter, the company made $4.16 per share. That’s up 26% over last year’s Q2. Not enough analysts follow IESC for us to say there’s an earnings consensus.

The numbers were pretty good. Quarterly revenue rose 17% to $974 million. Operating income was up 21% to $112.3 million. As of March 31, IES had a backlog of approximately $3.9 billion. That’s a good sign for future business. The company’s business is divided into four divisions: Communications, Residential, Infrastructure Solutions and Commercial & Industrial.

Management said that while the other divisions were doing well, their Residential division “faced continued pressure from weak housing starts and unfavorable weather.” The company also said that it’s started “to see growth in our multi-family backlog.”

IESC said it “ended the quarter with $49.5 million of cash, $35.0 million debt, and $214.0 million of marketable securities.” During the quarter, the company bought back 4,112 shares for $1.7 million, or an average price of $418.31 per share. IESC ended the quarter with $166.2 million left in the current buyback authorization.

IESC is a large and multifaceted business. If you want to learn more about the details of IESC, you can check out this Investors presentation from earlier this year. This week, I’m raising our Buy Below on IESC to $700 per share.

After the close on Monday, Allison Transmission (ALSN) reported very good earnings for its fiscal Q1. This is good to see because Allison missed its Q4 earnings but offered reassuring guidance.

For Q1, Allison made $2.57 per share compared with estimates of $2.10 per share. Net sales were up 84% to $1.4 billion, but that figure includes Allison’s Off-Highway which was added at the start of this year.

Allison ended Q1 with $311 million of cash and cash equivalents, and $845 million of available borrowing capacity under its revolving credit facility.

For this year, Allison expects consolidated net sales of $5,575 to $5,925 million, and net income in the range of $600 to $750 million. Both of those are unchanged from the previous guidance. The guidance works out to 2026 earnings of about $2.50 per share.

Allison is turning into a nice winner for us this year. We’re sitting on a 26% YTD gain. Allison remains a buy up to $130 per share.

On Tuesday afternoon, Henry Schein (HSIC) reported Q1 earnings of $1.32 per share. That’s up 15% over last year’s Q1 and it topped Wall Street’s consensus by 10 cents per share.

If you’re not familiar with Henry Schein, it’s a one-stop shop for healthcare products with a focus on dental supplies and veterinary products.

This was a good quarter for HSIC. CEO Fred Lowery said, “I am pleased with our strong first quarter results that reflect continuing momentum from the second half of last year as we grow market share and expand gross margins.”

Total net sales were up 6.3% to $3.4 billion. Adjusted EBITDA for the quarter was $289 million, up from $259 million for last year.

During Q1, HSIC bought back $1.6 million shares at an average price of $77.64 per share for a total of $125 million. They’re not done. The company has another $655 million authorized to buy back more shares.

The company also stood by its guidance for this year. HSIC expects earnings to range between $5.23 and $5.47 per share. It also sees sales growth of 3% to 5%. This week, I’m dropping our Buy Below on Henry Schein to $80 per share.

On Wednesday, before the opening, Cencora (COR) said it had Q2 sales of $78.4 billion. That’s up 3.8% over last year but it was below Wall Street’s expectations. Cencora also lowered its full-year sales guidance to growth of 4% to 6%. The previous guidance had been for sales growth of 7% to 9%.

Cencora blamed the lower guidance on “lower expectations for revenue growth in the U.S. Healthcare Solutions segment.” Traders punished the stock on Wednesday’s trading. By the closing bell, Cencora had lost 17%.

Still, the company had a decent Q2, plus it raised its earnings guidance. Cencora’s Q2 earnings rose 7.5% to $4.75 per share. That beat the Street by two cents per share. Cencora raised its full-year guidance range to $17.65 to $17.90 per share. The previous guidance was $17.45 to $17.75 per share.

Cencora recently bought the equity it didn’t already own in OneOncology, a leading management-services organization for oncology practices.

CEO Robert P. Mauch said, “As we move into the second half of our fiscal year, we are pleased to have made progress on debt paydown and to be in a position to resume opportunistic share repurchases.” Cencora said it’s aiming to buy back $1 billion in shares this year.

I know this was a tough week for Cencora, but I still like the stock. It’s been a nice winner for us. This week, I’m dropping our Buy Below on Cencora to $275 per share.

On Thursday, McKesson (MCK) reported fiscal Q4 sales of $96.3 billion. That’s an increase of 6%. Earnings rose 16% to $11.69 per share which was 12 cents more than estimates.

McKesson started a $2.25 billion accelerated share buyback program. The board also approved a $5 billion increase to the current buyback program. That brings the total authorization to $7.7 billion.

For the entire fiscal year, McKesson increased its revenues by 12% to $403.4 billion. Earnings increased 18% to $39.11 per share. Cash flow from operations was $6.2 billion and free-cash flow was $5.4 billion. Last year, McKesson returned $5.1 billion to shareholders through $4.8 billion of stock repurchases and $381 million of dividends.

For the new fiscal year, McKesson expects earnings of $43.80 to $44.60 per share. That’s an increase of 12% to 14%. The company targets a long-term growth of 13% to 16%.

I’m impressed by these numbers. McKesson is a buy up to $1,000 per share.

Buy List Updates

FactSet (FDS) announced that it’s raising its quarterly dividend from $1.10 to $1.16 per share. This is the 27th consecutive year that FactSet has increased its dividend. The new dividend will be paid on June 18 to holders of record at the close of business on May 29.

A few weeks ago, FactSet reported very good earnings. For its fiscal Q2, FactSet made $4.46 per share which was eight cents better than Wall Street’s forecast. The company also increased its full-year guidance range to between $17.25 and $17.75 per share. The Q3 earnings report will be sometime in mid-June. FactSet is a buy up to $220 per share.

That’s all for now. No more earnings next week. However, we’ll soon be upon our off-cycle stocks. That means will soon get earnings reports from stocks like Heico and Intuit. The big econ report to look out for will be Tuesday’s CPI report. We know Americans are paying more for gasoline, but has that spilled over into other areas? On Thursday, we’ll get the retail sales report. I’ll have more market analysis for you in the next issue of CWS Market Review!

– Eddy