Stock Market Update

[BRIEFING.COM] The standing of the major indices is mixed, yet the tone of the session is positive. That is because key leadership groups are leading and because talk is swirling that delegations from Iran and the U.S. could be meeting this weekend in Pakistan.

Time and circumstances will tell. President Trump reportedly said, according to CNN, that he will be sending Steve Witkoff and Jared Kushner to Pakistan for talks with Iran and that Vice President Vance will be on standby for a possible visit.

That fits a narrative that just about anything goes if the talks can lead to the groundwork for a lasting ceasefire and the restoration of safe and free transit through the Strait of Hormuz. WTI crude futures, which flirted with $98.00/bbl before the open, are at $94.03/bbl now, down 1.9%.

The stock market has liked that move in oil, even if the energy sector (-1.0%) hasn't, but the move it has loved has been the one in Intel (INTC 80.34, +13.56, +20.31%) after its better-than-expected earnings report and outlook. The good news there has filtered through the semiconductor industry and has been instrumental in driving the information technology sector (+2.3%) and the Philadelphia Semiconductor Index (+4.5%) to big gains.

Remarkably, the SOX Index is now up 38.8% for the month!

Intel may be pacing the tech sector's advance, but the mega-cap cohort is once again pacing the market-cap-weighted indices to record highs. Apple (AAPL 270.44, -2.99, -1.09%) is a holdout in that group today, but Meta Platforms (META 679.42, +20.28, +3.08%), Amazon (AMZN 262.08, +7.00, +2.74%), Alphabet A (GOOGL 343.62, +4.73, +1.40%), and Microsoft (MSFT 419.76, +4.00, +0.96%) are doing the heavy lifting.

The Vanguard Mega-Cap Growth ETF (MGK 84.14, +1.27, +1.53%) is up 1.5%.

Notwithstanding the strength in the S&P 500, there are only three sectors—information technology, communication services (+1.1%), and consumer discretionary (+1.1%)--that are up at least 1.0%. Key laggards today include the health care (-1.5%), energy, industrials (-0.8%), and financial (-0.5%) sectors.

The outsized decline in the health care sector has been led by Eli Lilly (LLY 882.02, -35.63, -3.88%) and HCA (HCA 434.55, -39.48, -8.33%), the latter of which is getting pinched after reporting weaker-than-expected patient volumes for the first quarter.

Separately, the DOJ criminal pinch on Fed Chair Powell is being relaxed. It was announced earlier that the DOJ is going to drop its criminal probe and let the Inspector General's office handle things. This development should pave the way for Kevin Warsh to be confirmed as Fed chair in the coming weeks, as Senator Tillis (R-NC) had previously said that he wouldn't let the nomination get out of committee until that criminal probe was dropped.

The 2-yr note yield, which is more sensitive to changes in the fed funds rate, is down five basis points to 3.78%. The 10-yr note yield is down one basis point to 4.31%

Reviewing today's economic data:

• The final reading for the University of Michigan Consumer Sentiment Index for April edged up to 49.8 (Briefing.com consensus: 47.6) from the preliminary (and record low) reading of 47.6. The final reading for March was 53.3. In the same period a year ago, the index stood at 52.2.
  • The key takeaway from the report is that there was some slight improvement from the preliminary report as gas prices eased a bit following the ceasefire, yet gas prices are still much higher than where they were before the war began, which is contributing to the stark reality that consumer sentiment is near the trough seen in June 2022.