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Financial Markets Morning Commentary
By: Tom Pawlicki, Senior Specialist, Market Intelligence
Economic
- 10-year futures are -1/32. Yields are +0.35 bps at 4.297%. S&P futures are -13.00. There are very small changes in interest rates or equites this morning despite more vessel seizures in the Strait of Hormuz. Iran seized two container ships and broadcast a video of IRGC commandos boarding one of them. The US intercepted the two Iranian VLCCs that were reported yesterday to have broken through the US blockade. The US also intercepted three Iranian vessels near India yesterday. Bloomberg mentioned in one article that the oil disruption exceeds the 1973 and 1979 crises, but the reactions by markets appear to show an expectation of a resolution in Hormuz before too long.
- Preliminary data on Strait of Hormuz transits shows 7 crossings Wednesday following 7 on Tuesday.
- On the remaining calendar this week, only the final Michigan sentiment numbers will be out tomorrow. Earnings include Intel this afternoon, and Procter & Gamble on Friday morning.
- (Reuters) Initial jobless claims were 214K vs. 210K expected and 208K previously. Continuing claims were 1.821 mln vs. 1.820 mln expected and 1.809 mln previously (revised from 1.818 mln).
- (Reuters) Tesla reported first-quarter revenue of $22.39 billion for the three months ended March 31, compared with analysts' average estimate of $22.6 billion. Tesla delivered fewer vehicles than Wall Street expected in the first quarter, but deliveries were up 6.3% from a year earlier.
- (Reuters) United Airlines CEO Scott Kirby said on Wednesday ticket prices may need to rise by as much as 15% to 20% to offset a surge in jet fuel costs, signaling a significant test of consumers' willingness to absorb higher fares as the industry grapples with volatile oil prices.
- (Reuters) American Airlines cut its 2026 profit forecast on Thursday, as sky-high jet fuel costs driven by the Iran war eat into profits. The carrier now expects to report between 40 cents per share loss and a $1.10 per share profit, compared with $1.70 to $2.70 profit per share forecast earlier.
- (Reuters) The Trump administration is nearing a deal to rescue low-cost carrier Spirit Airlines that could include up to $500 million in government-backed financing to help it keep operating through bankruptcy, three people familiar with the matter told Reuters.
- (Wire Services) American Express earnings and revenue topped Wall Street consensus estimates on Thursday as its cardholders continued to spend. Network volume and billed business growth increased from the prior quarter's pace. The credit card lender and network reaffirmed its 2026 guidance at $17.30-$17.90 EPS (midpoint $17.60 vs. average analyst estimate of $17.59) and revenue growth of 9%-10%.
- (Reuters) Eurozone HCOB composite flash PMI was 48.6 in April vs. 50.1 expected and 50.7 previously. MFG was 52.2 vs. 51.6 while services was 47.4 vs. 50.2.
Geopolitical
- (Reuters) Two container ships seized by Iran near the Strait of Hormuz with about 40 crew aboard have been taken toward the port of Bandar Abbas, sources said on Thursday, Tehran having vowed to retaliate after U.S. forces seized an Iranian vessel three days earlier.
- (Bloomberg) The US military intercepted two Iranian oil supertankers, Hedy and Hero II, that tried to evade its blockade. The Very Large Crude Carriers are anchored at Chabahar, an Iranian port on the Gulf of Oman, after being intercepted earlier this week, US Central Command said Wednesday. Analytics firm Vortexa previously said that the carriers had moved into the Arabian Sea, testing an American blockade that began early last week.
- (Reuters) The U.S. military intercepted at least three Iranian-flagged tankers in Asian waters and is redirecting them away from their positions near India, Malaysia and Sri Lanka, shipping and security sources said on Wednesday.
- (Reuters) Iran showed off its tightened grip over the Strait of Hormuz on Thursday with video of its commandos storming a huge cargo ship, after the collapse of peace talks that Washington had hoped would open the world's most important shipping corridor. State television broadcast footage overnight of masked troops pulling up in a grey speedboat alongside the MSC Francesca, climbing a rope ladder to a shell door in the hull and jumping through brandishing rifles.
- (Reuters) The U.S. will host a second meeting between Lebanese and Israeli envoys on Thursday, with Beirut seeking the extension of a ceasefire between Israel and Hezbollah, a day after Israeli strikes killed at least five people including a journalist.
- (Reuters) Ukrainian drones struck the Gorky oil pumping station in Russia's Nizhny Novgorod region overnight, an official from Ukraine's SBU security service said on Thursday. The station is an important part of Russia's oil transport system and supports the operation of main oil pipelines, the source added.
- (Reuters) Russian billionaires increased their wealth by 11% to a record $696.5 billion over the past year despite the war in Ukraine and the toughest Western sanctions ever imposed on a major economy, Forbes Russia reported. Russia's richest men are all linked to the vast reserves of natural resources that Russia has exported to global markets for decades - and their wealth has risen as disruptions to trade flows have boosted commodity prices.
Energy
- WTI is +$0.86/bbl at $93.82/bbl, while Brent is -$0.19/bbl at $101.72/bbl. Natural gas is +$0.041/MMBtu at $2.681/MMBtu.
- (Bloomberg) Japan’s Prime Minister Sanae Takaichi sought help in procuring more energy in a phone call Thursday with Saudi Arabian Crown Prince Mohammed bin Salman, as the ongoing war in Iran continues to cast concerns over oil supply.
- (Reuters) Sweden may need to restrict how much energy its citizens can use, if supplies from the Middle East remain disrupted by the war in Iran, Prime Minister Ulf Kristersson said. “We cannot rule out state rationing, but we are not there yet,” Kristersson said at a news conference in Stockholm on Thursday. Earlier this week, the German airline Lufthansa said it would cancel 20,000 short-haul flights from its European summer schedule to save on fuel and neighboring Finland’s Finnair cautioned over fuel availability if the conflict is prolonged.
- (Reuters) Russia is maintaining the flow of its oil to world markets and thereby helping to limit the impact of the crisis triggered by the Iran war, but it has no specific initiative to propose within OPEC+, the Kremlin said on Thursday.
- (Reuters) S&P Global Energy has reduced its global oil demand forecast for 2026 by 700,000 barrels per day as the U.S.-Iran war disrupts energy supplies from the Middle East and hits demand in the second quarter
- (Reuters) Asia's high sulfur fuel oil (HSFO) markets were mixed, with timespreads firming slightly but refining margins declining, against a backdrop of falling inventories at key fuel blending hub Singapore. Singapore's residual fuel stockpiles inched down slightly to two-week lows, though they remained above 22 million barrels.
Metals
- Gold is +$2.70/oz, trading at $4,755.70/oz, while silver is -$1.176/oz at $76.785/oz.
- The dollar index is +0.083 points at 98.673.
- (Reuters) Copper prices retreated from multi-week highs on Thursday on stalled U.S.-Iran peace talks, continued closure of the Strait of Hormuz and a stronger dollar.
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