Oil and Stocks Depend on How Serious Trump Deal Is Markets care far more about the Strait than Iran’s nuclear program.

(…) Eric Golson of the University of Surrey argues that, given Tehran’s tolerance for economic pain, it could plausibly hold out for longer. In his view, the energy shock has yet to fully play out:

They’ve got the world backed into a corner and, at the moment, there’s no advantage for them to surrender before the world feels the pain. They have every incentive to keep holding on until they get the best possible deal they can.

For markets, reopening the Strait matters most. Brad Conger of Hirtle Callaghan points out that investors are less focused on parts of the deal relating to denuclearization; that raises the possibility of a narrower deal to restore transit flows first, leaving broader issues until later:

The world economy does not actually care whether Iran has a nuclear weapon or is developing a nuclear weapon. And so even a bad deal for the United States is, in the market’s view, good because it takes pressure off of all of the intermediates, in addition to fuel, fertilizers, plastics, and all the things that are starting to be in shortage.

Equities seem assured that some deal lies ahead and are looking beyond the shock, drawing support from robust high-tech investment. For them, the latest developments were a pure positive, and the stocks that were already leading performed best. (…)

While P/Es are rising,

(…) the average G7 10- and 30-year borrowing cost ended April at 17-year highs (and we remain within a few basis points of these levels today). Even if a permanent deescalation were to come to fruition, the risk that the long-end remains high is very real.

Certain members of the group, notably the U.S. and U.K, were already contending with overly high price pressures before a single missile was launched. Several members have been overly generous in their spending by subsidizing energy (or cutting taxes), despite the fragility of their public finances.

The lack of fiscal discipline combined with a high level of geopolitical risk will continue to put upward pressures on term premiums going forward.

On the forex side, markets are increasingly treating the long-term yield moves as risk premiums rather than return premiums. For the greenback, safe-haven flows are reversing, and the broad USD is now nearly back to where it was before the conflict, leaving it still down 7% from when President Trump first took office.

In Japan, higher yields are undermining, rather than restoring, yen support.

While G7 yields may remain high, this environment favours Canada as a relative outperformer given that inflation was much better contained and fiscal policy is on a more sustainable trajectory. We expect some near-term softness through Q2 but look for the currency to strengthen into the second half of the year. (NBC)

Who’s got the cards in this “little US excursion”?

• Iran Takes Its Time on a Response to Trump The surge in energy costs is a major headache for Trump and American voters are increasingly against the war.

Axios: U.S. officials said they expect a response from Tehran in the next 24-48 hours. “We are not far, but there is no deal yet,” one U.S. official said.

Other U.S. officials are skeptical a deal will come together.

• Jet-Fuel Prices Are Spiking and Trump’s Advisers Are Worried Administration officials have spoken to the airline industry, which has voiced concerns about the rising costs

Former New Hampshire Gov. Chris Sununu delivered a warning to Treasury Secretary Scott Bessent during a recent visit to Washington: Already-high airfares will surge if the war in Iran doesn’t end soon.

Sununu, a Republican who represents some of the biggest airlines as the president of the industry group Airlines for America, has for weeks sounded the alarm to Trump administration officials about the economic fallout from high jet-fuel prices. The war, Sununu has argued, must come to a close soon, or things will get worse.

Administration officials have gotten the message.

Privately, President Trump’s advisers are increasingly worried that Republicans will pay a political price for the rising fuel costs, according to people familiar with the matter. Many of those advisers are eager to end the war in hopes that prices will begin moderating before November’s midterm elections. (…)

Sixty-three percent of Americans said they put a great deal or a good amount of blame on Trump for the increase in gas prices, according to a new poll conducted by NPR, PBS and Marist. More than 8 in 10 Americans said struggles at the gas pump are putting strain on their finances.

Jet-fuel prices roughly doubled in a matter of weeks after the war began, and they have remained high. Airlines have said that will add billions of dollars of additional expenses this year, squeezing profit margins. U.S. airlines spent more than $5 billion on fuel in March—up 30% from a year earlier, according to government data.

Carriers have been raising ticket prices, hoping to pass the cost along to consumers, and they are culling flights that will no longer make money at higher price levels.

In March, the price of a U.S. domestic round-trip economy ticket rose 21% from a year earlier to $570, according to Airlines Reporting Corp., which tracks travel-agency sales. So far, airlines have said the higher fares haven’t deterred bookings and they are hoping to recoup more of the fuel-cost increases as the year goes on. (…)

Sununu said Trump administration officials are conscious of the economic fallout from the war: “They get it…and I think that’s why they’re trying to get through the war as fast as they can.”

But he cautioned that it could take months for prices to return to prewar levels. “Ticket prices won’t go down immediately” after the strait is fully reopened, Sununu said. “You’re looking at elevated ticket prices through the summer and fall because it takes a while for the prices to go down.” (…)

The war has already contributed to one casualty in the industry: Spirit Airlines. Company representatives have said they were forced to close the airline because the sustained surge in jet-fuel prices derailed the company’s plan to emerge from chapter 11 bankruptcy. (…)

A group of budget airlines last month sought $2.5 billion in financial assistance to offset higher fuel costs, and they separately wrote to lawmakers asking for relief from certain ticket taxes.

• Why the Collapse of Spirit Airlines Means Higher Fares for Everyone Defunct budget airline had long been a competitive force on lower-cost tickets
• The Iran War Is Crushing Whirlpool’s Profit—and Higher Prices Are Coming

The Michigan-based maker of refrigerators and washing machines cut its full-year earnings guidance roughly in half Wednesday, from $6 a share to a range of $3 to $3.50, and said it would suspend its dividend as it focuses on paying down debt. Whirlpool stock dropped by 18% in after-hours trading. (…)

Though shoppers still replaced aging or broken appliances with modestly priced equivalents, they shied away from the company’s higher-price, more profitable models.

“We believe that’s absolutely driven by the fact that consumers are being a bit more cautious in terms of what they’re spending, and most likely reducing the amount of big-ticket purchases,” Warner said. The company lost $0.56 per share in the quarter, compared with the $0.38 earnings per share that Wall Street had expected.

Warner said the company was further hurt by the Supreme Court’s decision to invalidate the Trump administration’s emergency tariffs. Following the decision, she said, rivals cut their prices in anticipation of receiving refunds.

Warner said a new tariff policy announced in April, applying a flat 25% levy on the total value of imported appliances, would give Whirlpool the advantage it has long predicted over its foreign competitors. The company makes 80% of its products for the U.S. market domestically.

Whirlpool reduced its discounts on many products in April to make up for what it said were three years of cost inflation it hadn’t passed on to consumers. Atypically, its competitors swiftly followed the effective price hike with their own increases, which Warner said was a sign that higher prices were sustainable.

The company plans to increase list prices for its appliances by about 4% in July.

It seems that the wealth effect does not extend to high end appliances. Investors also seem to underestimate the costs of the war.

• America’s Army of Supercommuters Is Reeling Over High Gas Prices
• ‘Plastic shock’ hits Asia as Iran oil crisis strangles supplies Shortage of petrochemical inputs drives up prices of packaging for food and medical products

The disruption of oil shipments from the Middle East has severely constrained supplies of naphtha, a petroleum product that is turned into speciality chemicals used in semiconductor manufacturing but is also essential to making plastic. The price of naphtha in Asia has almost doubled since the war began.

That has sent the prices of bags, containers, cups and utensils soaring, sparking fears of shortages as manufacturers struggle to source packaging for products such as instant noodles, beverages and cosmetics.

In Indonesia, one of the world’s most populous countries and one of the largest consumers of plastic, suppliers have warned plastics retailers that they could be forced to cease production due to scarcity of naphtha. (…)

Increasing plastic prices could add to inflationary pressures across Asia, where many countries rely on imported energy and were already grappling with higher costs. (…)

Some Asian petrochemical plants, which use naphtha to make ethylene and propylene, the building blocks of plastic, have already reduced or halted production. (…)

The food and beverage sector accounts for 60 per cent of plastic packaging demand in the country.

“But cosmetics, medical equipment and pharmaceuticals are also affected,” she added. (…)

Fed’s Goolsbee Sounds Warning on Inflation, Consumer Behavior

Fed’s Musalem Says Risks Are Shifting More Toward Inflation

NY Fed president John Williams: the Middle East conflict has added “significant and unpredictable risks.”

Europe Is Facing Stagflationary Shock, EU’s Dombrovskis Says

ECB Rate Hike in June Is ‘All but Inevitable,’ Kazimir Says

Top Bank of Korea Official Says It’s Time to Consider Rate Hike

Norway’s central bank raises interest rates amid impact of Iran conflict

US Firms Add 109,000 Jobs, Most Since Early 2025, ADP Says

Private-sector payrolls rose 109,000 in April after a revised 61,000 advance in the prior month, according to ADP Research data out Wednesday. The median estimate in a Bloomberg survey of economists called for a 120,000 increase.

More than half of the hiring advance was due to health services and education. Trade, transportation and utilities payrolls also increased. Construction employment grew, which may reflect the building of data centers that are at the heart of massive investment in artificial intelligence. (…)

The ADP report, published in collaboration with the Stanford Digital Economy Lab, also showed workers who changed jobs saw a 6.6% increase in pay from a year earlier. Wage growth for those who stayed put was 4.4%, slightly less than a month earlier.

The government’s employment report due Friday is expected to show a more moderate pace of hiring in April, a month after the biggest advance since 2024. (…)

ADP bases its findings on payrolls covering more than 26 million US private-sector employees.

Trump Is Losing a Second War

Last month, out of more than 11,000 new passenger vehicles registered in Norway, only around 150 had internal consumption engines. The rest were fully electric. In mainland Europe as a whole, EV sales are up 51 percent from a year ago.

The global energy transition — the shift from fossil fuels to electrotech, which uses solar, wind and batteries to power an electrified economy — is accelerating. It’s now clear that the closure of the Strait of Hormuz marks an inflection point: the global green energy curve, which was already on a rapidly rising trajectory, has suddenly become even steeper. “Investors,” reports the Financial Times, “are piling into clean energy funds.”

This acceleration isn’t just a consequence of soaring fossil fuel prices. It is also the result of the worldwide realization that, with the end of Pax Americana, depending on imported hydrocarbons is a risk not worth taking. The United States cannot be relied on to keep sea lanes open when cheap drones can take out an oil tanker or a major pipeline. Even relying on oil and gas from America itself is dangerous, since one never knows when an erratic U.S. government – now under the control of a twice-elected malignant narcissist — will try to use energy as a tool of coercion. (…)

Trump’s energy officials are barely less delusional than their boss. Last month Chris Wright, Trump’s energy secretary, dismissed the rise of renewable energy as a failed project:

The result has been 10 or 20 years of just massive investment in energy that wasn’t helpful in better energizing the world. Wasn’t helpful in lifting people out of poverty. Wasn’t helpful in expanding access to energy. In fact, I believe it’ll go down as the greatest malinvestment in history.

Meanwhile, last year solar and wind power accounted for 99 percent of the growth in world electricity supply, while generation using fossil fuels declined: (…)

Fortunately, America is not the world. We account for less than 20 percent of world electricity generation. So Trump’s policies can’t stop the global energy transition. Indeed, as a result of the Iran debacle, Trump’s presidency has been a net positive for the global green energy revolution.

Trump and the fossil-fuel cabal may be able to extract a few billion dollars in profits by keeping America stuck in a dirty-energy past. But in so doing they will also ensure that the United States is left behind, and that the future belongs to China.

One kind act really does set off a chain reaction

Think about the last time a stranger did something unexpectedly kind for you. Maybe someone held a door open, picked up something you dropped or gave you a compliment. Did it change how you treated the next person you encountered?

New research suggests that for most people, your kind gesture isn’t just helping one person — it’s helping many.

Kindness spreads, especially as we age.

People on the receiving end of random acts of kindness are more likely to direct kindness to strangers, according to a recent survey by Gallup and the Values-in-Action Foundation.

Younger adults are less likely than older adults to initiate acts of kindness toward strangers.

Of the adults age 50 or older surveyed, 72% said they felt comfortable initiating an act of kindness after being a beneficiary themselves. But only 40% of adults 18 to 29 who also received multiple acts of kindness said the same.

That suggests the “pay it forward” instinct is something many of us grow into, not something we’re simply born with.

Broadly, the country is doing better than cynics might expect: More than 60% of Americans across every region said they’d experienced kindness multiple times in just the past week. (…)

Values-in-Action’s United States of Kindness campaign is asking individuals and organizations to participate in 250 acts of kindness to celebrate America’s 250th anniversary.

• Find more information, ideas and resources on the United States of Kindness website.

If you were looking for a sign to help your neighbor, this is it.

U.S. and Iran closing in on one-page memo to end war, officials say

The White House believes it’s getting close to an agreement with Iran on a one-page memorandum of understanding to end the war and set a framework for more detailed nuclear negotiations, according to two U.S. officials and two other sources briefed on the issue.

The U.S. expects Iranian responses on several key points in the next 48 hours. Nothing has been agreed yet, but the sources said this was the closest the parties had been to an agreement since the war began.

Among other provisions, the deal would involve Iran committing to a moratorium on nuclear enrichment, the U.S. agreeing to lift its sanctions and release billions in frozen Iranian funds, and both sides lifting restrictions around transit through the Strait of Hormuz. (…)

But the two U.S. officials said President Trump’s decision to back off his newly announced operation in the Strait of Hormuz and avoid a collapse of the fragile ceasefire was based on progress in the talks.

The one-page, 14-point memorandum of understanding (MOU) is being negotiated between Trump’s envoys Steve Witkoff and Jared Kushner and several Iranian officials, both directly and through mediators.

• In its current form, the MOU would declare an end to the war in the region and the start of a 30-day period of negotiations on a detailed agreement to open the strait, limit Iran’s nuclear program and lift U.S. sanctions.
• Those negotiations could happen in Islamabad or Geneva, two sources said.
• Iran’s restrictions on shipping through the strait and the U.S. naval blockade would be gradually lifted during that 30-day period, according to a U.S. official.
• If the negotiations collapse, U.S. forces would be able to restore the blockade or resume military action, the U.S. official said.

The duration of the moratorium on uranium enrichment is being actively negotiated, with three sources saying it would be at least 12 years and one putting 15 as a likely landing spot. Iran proposed a 5-year moratorium on enrichment and the U.S. demanded 20.

• The U.S. wants to insert a provision whereby any Iranian violation on enrichment would prolong the moratorium, the source said. Iran would be able to enrich to the low level of 3.67% after it expires.

• Iran would commit in the MOU to never seek a nuclear weapon or conduct weaponization-related activities. According to a U.S. official, the parties are discussing a clause whereby Iran would commit not to operate underground nuclear facilities.
• Iran would also commit to an enhanced inspections regime, including snap inspections by UN inspectors, according to the U.S. official.
• The U.S. would commit as part of the MOU to a gradual lifting of the sanctions imposed on Iran and the gradual release of billions of dollars in Iranian funds that are frozen around the world.

Two sources with knowledge also claimed Iran would agree to remove its highly enriched uranium from the country, a key U.S. priority that Tehran has rejected up to now. One source said an option being discussed is moving the material to the U.S. (…)

SERVICES PMIs

S&P Global: New business intakes fall for first time in two years aswar in the Middle East and inflation hit demand

The headline S&P Global US Services PMI® Business Activity Index registered 51.0 in April following 49.8 in March. Whilst an improvement since the previous month, growth was nonetheless only marginal and well below the series average.

Growth was limited by a weakness in demand as new business fell into contraction territory for the first time in two years. Panelists often commented on a rising degree of uncertainty stemming from high inflation and the war in the Middle East. Tariffs remained a source of instability in relation to international demand. Latest data showed new export business declined solidly in April to extend the current sequence to five months.

Meanwhile, employment volumes rose slightly in April, following a fractional contraction in March. Panelists noted a number of part-time staff had been taken on to fill vacancies. Some pressure on capacity was sustained nonetheless as backlogs of work rose modestly for the fourteenth month in a row.

Input price inflation remained elevated during April and well above its historical trend level. Service providers reported that costs were driven higher by rising supplier charges, increased fuel and gas prices alongside an uplift in staffing costs. The rise in expenses led to another sharp increase in selling charges over the month. Firms commonly attributed higher output prices to efforts to offset some of the adverse impact on profit margins of increased input costs.

Finally, expectations about the year ahead were again positive overall at the start of the second quarter, but still below trend. Where growth is forecast, hopes of an end to the war in the Middle East, improved marketing and business expansion plans were all seen as sources of growth for the year ahead. That said a degree of uncertainty over the impact of the conflict and upward pressure on the cost of living weighed on sentiment.

Chris Williamson, Chief Business Economist at S&P Global Market Intelligence

“Although business activity returned to growth after a small decline in March, it’s clear the pace of growth has kicked down a couple of gears since the start of the year. The survey data are indicative of GDP growing at a modest 1% annualized rate.

“Growth may weaken further, as service providers are reporting lower inflows of new business for the first time in two years, reflecting an intensifying hit to demand from the war in the Middle East.

“The direct impact of the war has been most evident in consumer-facing services, as high prices have led to a pull-back in discretionary spending on activities such as holidays and recreation, though transport has also been curbed by high fuel prices and travel disruptions.

“However, a secondary additional driver of renewed weakness is a drop in demand for financial services, in part linked to heightened uncertainty about market outlooks but also reflecting expectations of higher inflation and interest rates, which has hit real estate and lending activity.

“A further increase in input cost inflation reflected not just higher fuel prices but a widening spread of goods and services rising in price, as well as higher wages, which will feed through to consumer price inflation in the coming months. The scale of the price rises will put pressure on the Fed to prevent higher inflation becoming entrenched.”

ISM:

In April, the Services PMI^® registered 53.6 percent, a decrease of 0.4 percentage point compared to March’s figure of 54 percent. The Business Activity Index remained in expansion territory in April, increasing 2 percentage points to 55.9 percent from March’s reading of 53.9 percent.

The New Orders Index registered 53.5 percent, 7.1 percentage points below March’s figure of 60.6 percent and 0.4 percentage point below its 12-month average reading of 53.9 percent.

The Employment Index contracted for the second month in a row with a reading of 48 percent, a 2.8-percentage point increase from the 45.2 percent recorded in March,” says Miller.

“The Prices Index held steady at 70.7 percent in April, the same as March’s figure and repeating its highest reading since October 2022 (70.7 percent). The index has exceeded 60 percent for 17 straight months, increasing its 12-month average from 67.2 percent to 67.7 percent. Diesel, gasoline, oil and related price increases were the most frequently mentioned commodities up in price in April.

WHAT RESPONDENTS ARE SAYING

• “Spring selling season for the homebuilding construction market is here, but interest rates, inflation, and oil supply issues are keeping buyers on the fence. Discounts and rate buy-downs remain the driver of sales, as affordability continues to be the hinderance for buyers. Cost cutting and value-engineering have reduced costs to pre-coronavirus pandemic levels, but inflation and rising oil prices threaten that hard work. Fuel surcharges, previously whispers, have become requests.” [Construction]
• “First quarter 2026 finished strong for tertiary care and beat revenue expectations by 6 percent, patient volumes remain strong, and labor is holding steady. Despite macroeconomic concerns, supply chains remained resilient, yielding few significant back orders and functioning quite well compared to expectations. Forecast is good for the next quarter.” [Health Care & Social Assistance]
• “The war has caused many banking customers to back off equipment purchases and other spending. Just as the recovery was under way, it is now turning off. Not a good thing.” [Management of Companies & Support Services]
• “For ongoing projects, we are anticipating a 7 percent to 9 percent increase in expenses, primarily driven by the current local political environment. While projects in Western Hemisphere markets remain relatively stable in the short term, the broader global geopolitical landscape is expected to exert pressure over the medium to long term. We estimate that market normalization and cost recovery will require approximately 12 to 18 months.” [Mining]
• “Our services sector continues to expand, supported by strong new orders, but softer employment and rising input costs are shaping a more cautious outlook. Clients are prioritizing efficiency, risk management and strategic advisory, driving sustained demand across our core accounting and consulting offerings.” [Professional, Scientific & Technical Services]
• “Bracing for significant impacts due to increasing fuel costs. Expenditures for city fleet have increased, and we are starting to see fuel surcharges from suppliers. Actually, we are surprised that supplier fuel surcharges have not been more robust.” [Public Administration]
• “Housing sales slowed in March, and the residential real estate market is still well below historical norms. If sales continue at the current rate for the rest of 2026, 3.98 million homes would be sold, the lowest since 1995. A prolonged conflict could maintain structural pressure on rates for 12 to 18 months.” [Real Estate, Rental & Leasing]
• “Current business conditions continue to place pressure on purchasing operations due primarily to ongoing supply chain volatility, elevated transportation costs and inflation-driven pricing from key suppliers.” [Transportation & Warehousing]
• “Business conditions in the transmission and distribution utility sector remain stable to slightly expanding, supported by ongoing grid modernization and infrastructure investment. Activity continues to be influenced by tariffs and elevated input costs, particularly in copper, aluminum, and steel, which are driving sustained pricing pressure across key materials. Supply chain conditions have improved modestly; however, lead times for critical equipment remain extended. Utilities are mitigating risk through early procurement, supplier diversification and strategic inventory positioning. The overall outlook remains positive despite cost and supply pressures.” [Utilities]
• “Activity level and project activity remains high in most verticals. Data centers are front and center and show no signs of slowing down.” [Wholesale Trade]

Ed Yardeni plots the ISM price indices over 20 years commenting that “The data are consistent with a resilient economy expanding at a healthy pace but experiencing some inflationary pressures.” Some?

Canada Services PMI: Service sector downturn softens as new work rises marginally in April

• Slowest contraction of activity for six months as demand stabilises
• Sentiment improves to 18-month high
• Selling prices raised at fastest rate for two years

 

Euro area economy contracts for first time in almost ayear-and-a-half as inflation continues to rise

The latest S&P Global PMI^® survey data pointed to stagflation in the euro area economy at the start of the second quarter, as the first fall in private sector business activity since December 2024 was accompanied by the sharpest rise in prices charged in three years.

The decrease in business activity at the composite level was entirely reflective of contraction in the service sector, which was the fastest in over five years, and more than offset a stronger increase in manufacturing production. This was also true for total new business, which fell in April for a second month running and to the quickest extent since November 2024. (…)

Input cost pressures continued to rise substantially in April. The rate of inflation accelerated further to a 40-month high, reflecting a broad-based quickening at the sector level. Prices charged were subsequently raised more aggressively at the beginning of the second quarter, with firms in both sectors lifting their fees to greater degrees than in March. The overall rate of increase in charges was the sharpest in three years.

 

March Labor Market Was Stable, if Sluggish The rate of open jobs slipped to 4.1% from 4.2% in February

The rate of open jobs slipped to 4.1% in March, from 4.2% in February and 4.4% in January, according to the latest job openings and labor turnover survey. The rate of workers facing layoffs also ticked higher, to 1.2% in March, from 1.1% in February.

Other indicators from the monthly survey were more positive. The hiring rate improved to 3.5%, from 3.1% in February, with about 5.6 million Americans landing new jobs in March. That is the best hiring rate in more than a year. A slightly greater share of workers also voluntarily quit their jobs in March – a sign that more people were finding opportunities to switch to a new role.

Overall, the data showed little sign of a worrying downturn. Yet the labor market remained stagnant by historical standards, with a relatively small share of workers moving jobs or getting pink slips. For more than a year, the job market has been slipping into what many economists have called a low-hire, low-fire balance.

A sharp immigration crackdown by the Trump administration, volatile economic-policy moves and elevated interest rates have all leaned against hiring. But amid solid consumer demand, many companies also have been hesitant to lay off workers – especially given the hiring challenges they faced during the booming postpandemic labor market earlier in the 2020s.

Indeed Job Postings peaked in early March and have dropped 2.3% since through April 23.

Ed Yardeni has a more hopeful look of the same stats (through April 17):

From Indeed:

Recent layoffs announcements, especially in the technology sector, have explicitly cited AI as a driver. As firms ramp up investment in AI, the key thing to look out for is whether and how quickly new roles are created that offset those losses. Either way, these layoff announcements are still working their way through the data, meaning March may be foreshadowing what April and May will confirm.

The job openings data reinforce the same divide. Information job openings were down -33% year-over-year, the steepest decline of any private sector, followed by other services (-21%) and professional & business services (-20%).

The Indeed Job Postings Index, which tracks job openings closer to real time than JOLTS, tells the same story. Tech-adjacent sectors remain among those with the largest declines in job postings levels relative to pre-pandemic levels. For example, IT infrastructure, operations, and support have around 30% fewer roles than before the pandemic.

Government job openings are down 13% year-over-year, driven largely by a 41% drop in the number of federal openings since last March – a time that coincides with DOGE’s efforts to cut government headcount. On the other end, retail trade openings grew 58% year-over-year, and manufacturing was up 18%. These highlight segregated labor markets that barely resemble each other.

Put simply, a software engineer, a construction worker, and a retail trader looking at the same headline job opening numbers or hires rate are experiencing fundamentally different realities as job seekers. Stability, in this market, is less a general condition and more a matter of where you are standing.

Anthropic deepens finance push as CEO Amodei warns of software disruption

Artificial-intelligence lab Anthropic is diving deeper into the financial services industry, releasing tools ‌on Tuesday that can speed up myriad tasks for banks and insurers while CEO Dario Amodei predicted further software disruption.

Pegged to a New York event hosted by Anthropic, the startup launched 10 financially focused agents, or AI programs that carry out tasks with limited human intervention. These include agents that can build ​a pitchbook, audit statements or draft credit memos, Anthropic said.

Hardly a year into unveiling ambitions to tailor AI for finance, Anthropic ⁠has rapidly expanded its business, with adoption by Goldman Sachs, Visa, AIG and others. Some 40% of Anthropic’s top 50 customers ​are financial institutions, and the industry represents its second-largest by enterprise revenue after technology clients, Anthropic said.

Speaking from the stage at the packed ​event, Amodei said Anthropic’s revenue in the first quarter had grown “80x” on an annualized basis. A later slide presentation also stated: “Coding has changed forever. Finance is next,” referring to the rise of AI-powered programming, a domain led by Anthropic. (…)

Amodei said at ​the event that AI is ⁠making software development cheaper and will cause the industry to grow overall. However, he said, “I don’t know what will happen to the group of today’s SaaS incumbents.” The companies that address AI head-on can ​do better than ever, while others may “lose market value, go bankrupt, completely go bust,” he said.

In ​an earlier Reuters ⁠interview, Nicholas Lin, who leads Anthropic’s financial services product work, said an increasingly capable Claude would develop “vertical-specific intelligence,” for instance in finance, even as the startup’s AI is widely applicable across industries.

AI model advances, coupled with hands-on customer support and key office software integrations, were underpinning the rapid ⁠uptick in ​Anthropic’s financial services business, said Lin.

As part of its product announcement, Anthropic said its ​10 new AI agents could plug in to its Claude Code and Cowork software out of the box, and could be customized to a firm’s policies and style.

More on AI demand:

• “At our companies — and by the way, we have 270 companies, 13,000 pieces of real estate, it’s massive in its scale — their LLM spend was up 15-fold in Q1 this year over last. Now, off a small base, yeah, but it tells you what’s happening. All these companies are trying to find ways to be more efficient.” – Blackstone President Jon Gray
• “Right now we have way more customers asking us, ‘No matter what the price is, can you give me more? I just need more capacity, I’ll pay you extra”, than we have arguing with us about the price.” – OpenAI CEO Sam Altman
• “And when the developers are coming to interview for jobs, they want to know, “Am I going to have access to the absolute latest development tools? Am I going to be able to use Cuda and Claude Code?” And in some places, they’re saying, “What is my token budget as a developer? And am I going to be able to move at the speed that I need?” In fact, at Amazon, we try to make sure that those token budgets are largely unlimited so that our developers are unblocked by technology.” – Amazon AWS CEO Matt Garman (via The Transcript)

• Jamie Dimon, speaking at the Anthropic event: “The technology is so powerful, it’s worth the trillion-dollar investment.”

Supply?

From Goldman Sachs:

We expect US data center capacity to more than double between end-2025 and end-2027, reaching 95GW in end-2027, as annual additions accelerate from 8.5GW in 2026 to 13.6GW in 2026 and 36GW in 2027.

This forecast takes into account that only 60/50% of currently scheduled additions are realized over the next 1/2 years.

To mitigate risks from local pushbacks, permitting delays, or resource scarcity (crucially, power, land, and water), it is not uncommon that data center developers submit multiple applications across regions and proceed only with the most favorable site.

US Gasoline Supplies on Way to Seasonal Low, Morgan Stanley Says

Stockpiles are expected to fall below 200 million barrels by the end of August, Morgan Stanley analysts wrote in a Monday note. The projections for record seasonal low fuel inventories are the latest indication that the global energy supply crunch appears set to continue for months to come.

“The US gasoline market is genuinely tight and tightening further into summer,” Morgan Stanley analyst Martijn Rats and strategists Charlotte Firkins and Amy Gower wrote.

Total gasoline inventories stood at 222 million barrels as of late April — the lowest for that time of year since 2014, according to the Energy Information Administration.

In Morgan Stanley’s base case projection, in which current market trends “partially normalize,” inventories will fall to 198 million barrels by the end of August. That’s less than levels for the period at any time in modern data, according to the note. The decrease would push total gasoline stockpiles to the lowest at any time since October 2012, according to the EIA. (…)

Falling US stockpiles are likely the result of a “collapse” in gasoline imports into the East Coast as the global market scrambles to secure fuel, Morgan Stanley said.

“The traditional resupply mechanism from Europe and the Middle East has effectively stopped,” the analysts wrote. “Saudi, Malaysian and large ARA cargoes are absent.”

Meanwhile, high margins for diesel and jet fuel — supplies of which are running shorter as a result of the effective closure of the Strait of Hormuz — are incentivizing refiners to produce more of those fuels instead of gasoline. US gasoline exports have also remained elevated as foreign buyers snap up barrels that might otherwise be delivered to domestic markets. And US demand for gasoline remains “resilient,” according to the note. (…)

Trump’s China Trap Why Xi Keeps Winning the Summitry Game

(…) In 2025, the leaders of Australia, France, Georgia, New Zealand, Portugal, Serbia, Slovakia, Spain, and the European Union all traveled to China. In January, the pace of visits accelerated, with the leaders of Finland, Ireland, South Korea, and the United Kingdom arriving in quick succession, followed in February by Uruguay’s president and Germany’s chancellor. In April, Spain’s prime minister cemented the pattern with his fourth visit in four years.

They walked red carpets, shook hands with senior Chinese Communist Party officials, and signed memorandums to shore up relations. The accumulating spectacle—what Chinese state media has called a “wave” of visits—reinforced the CCP’s narrative of a rising China and a declining United States. (…)

For Canada and other U.S. allies and partners, the primary impetus for deepening ties with China is Trump himself. Under pressure from a United States behaving like a predatory hegemon, these politicians feel that they have no choice but to hedge. Meeting Chinese President Xi Jinping sends a signal to Trump that they have other options and will not be subordinated into all-or-nothing allegiances or unfair trade agreements. In this way, the growing distance between Washington and its partners is a diplomatic gift for Beijing. (…)

The United States’ partners, now hedging against a transactional Washington, are compelled to accommodate China. But deeper entanglement with China’s authoritarian state-capitalist system risks the greater danger: subordination to Beijing. (…)

Rather than seeking superficial adulation from Beijing, he [Trump] should use the upcoming visit to strengthen deterrence by coordinating in advance with allies and setting redlines that none will cross, signaling he will impose costs for Chinese coercion that targets any of them, and conditioning any concessions on verifiable follow-through. That would diminish Beijing’s confidence in its strategy of compelling accommodation from individual countries. (…)

Having seen so many leaders score their own mini-deals in Beijing, Trump may be tempted to outdo them, issuing grand statements and accommodating Beijing in order to land an even flashier deal. To set a positive tone for the meeting, his administration has already approved sales of advanced computer chips, delayed arms sales to Taiwan, and shelved sanctions for cyberattacks traced to China.

Trump hopes to secure commitments from China to purchase American soybeans, natural gas, and Boeing aircraft, as well as for China to restrict exports of fentanyl precursors and ensure a steady supply of rare- earth elements. In return, Xi would likely expect restraint or rollback on U.S. support for Taiwan as well as on export and technology controls, sanctions on Chinese firms, and barriers to investing in the United States.

But this approach carries significant risk for the United States. If allies see that Trump is sacrificing shared interests for a headline announcement, their hedging will accelerate, deepening the rupture in the Western alliance. And if Trump’s visit results in a tactical deal at the cost of enduring strategic interests—such as U.S. security guarantees in the region and technology controls—it will confirm to Xi that even Washington is now willing to accommodate Beijing.

That would leave the United States dangerously weakened in the decisive years of its rivalry with China.

There is a better path. Trump could reframe the purpose of going to China—away from the self-censorship, ephemeral dealmaking, and authoritarian lexicon that cedes the advantage to the CCP, and toward using such encounters to gather information, defend bottom lines, and convey firm messages on U.S. and allied priorities. (…)

Wealth Effects are not evenly distributed: