Wall of Worry
Still Under Construction

U.S. Futures & World Markets

US equity futures are roughly flat premarket as the market digests recent AI-related gains and shifts focus back to earnings. Softer oil prices have added fuel to the equity rally, and it's encouraging to see Treasury yields finally starting to drift lower.

Speaking of Treasury yields — the bond market is the most conservative market on the planet. Bond investors don't care about hype. They want to buy a bond, get paid interest, and get their principal back. That's it. So how they price economic risk matters.

Datatrek Research had a good read on what the bond market is currently signaling:

Right now, this feels like a classic "climbing the wall of worry" tape. Most investors — especially the bears — can't believe we've seen such a sustained move higher. There's a great chart below illustrating how many disbelievers are still on the sidelines. Incremental buyers are the lifeblood of bull market rallies. It doesn't look like we're in full FOMO yet, but it's something to keep watching.

CORE Headlines

• The U.S. and Iran could hold talks in Pakistan next week, but major disagreements remain over nuclear enrichment limits. — Axios
• The Trump administration is concerned about increasing jet fuel costs. — WSJ
• Tesla's China-produced EV sales increased 36% in April. — Reuters
• The U.S. and China are considering starting AI-focused talks. — WSJ
• Samsung's market capitalization surpassed $1 trillion as its stock continued to benefit from the AI boom. — WSJ
• Uber reported higher revenue and gross bookings for Q1, as trip volumes and active users continued to grow. — WSJ
• Recent labor-related reports suggest the U.S. job market is reviving after a sluggish stretch for employment over most of the past year. — WSJ
• Novo Nordisk lifted its full-year guidance after the Wegovy maker reported increasing demand for its new weight-loss pill. — WSJ
• Commuters who drive 90 minutes or more each way are being hit hard by rising gasoline prices, with some skimping on other purchases to cover the cost. — WSJ

Charts & Data

ADP payrolls beat. Augur Infinity via Daily Chartbook: "ADP private payrolls rose by 109,000 in April, topping expectations." The labor market holding up is critical for the consumer spending story.

Gas prices above $4.50/gallon. GasBuddy via Daily Chartbook: the average US retail gas price has climbed above $4.50/gallon — a real household drag that bears watching into the summer months.

Dollar weakness lurking post-war. Robin Brooks via Daily Chartbook: "Regardless of whether the latest headlines are true or not, they're a natural experiment for how the Dollar will trade when the war ends. The Dollar is back down to near its pre-war lows against EM. As soon as war ends, we'll be back to Dollar weakness." Worth monitoring for international equity positioning.

Bonds and stocks now move together — a paradigm shift. Datatrek Research via Daily Chartbook: "From 2005–2019, US bond and stock total returns were negatively correlated, with an average reading of -0.19 over any given 1-year timeframe. Since 2020, the average 1-year US bond/stock return correlation has been +0.15 and has been positive 95% of the time." The traditional 60/40 hedge is behaving very differently now.

Record equity ETF inflows. BofA via Daily Chartbook: "Last week, clients were big net buyers of US equities after selling for two weeks, led by record equity ETF inflows of $6.8B." Everyone is joining the party.

ETF flows still have room to climb. Todd Sohn, Strategas via Daily Chartbook: "While April was a near record, the cooldown from March has equity ETF flows in their 69th percentile today. There's latitude for inflows to climb again."

Classic "Lockout Rally" — bears fighting the tape. Mark Minervini via Daily Chartbook: "Stocks are pushing to all-time highs while sentiment is getting more bearish — bulls down, bears up. That's a sign of disbelief. Investors are fighting the rally, which is a classic Lockout Rally condition." Incremental buyers forced off the sidelines fuel the next leg.

The geopolitical playbook worked again. Jim Reid, Deutsche Bank via Daily Chartbook: "The historical playbook around geopolitical shocks and US stocks has (broadly) worked again." Buy the fear, sell the all-clear.

13 ATHs in 2026 — historically bullish. @bluekurtic via Daily Chartbook: "The S&P 500 made its 13th new all-time high of 2026. 2018 is the only year with more than 13 ATHs that still finished negative. The base case still points to stronger gains in 2026."

AI is NOT a bubble — yet. @bluekurtic via Daily Chartbook: "Into the 2000 tech bubble, the Nasdaq 100 saw a sharp rise in the number of daily 1%+ moves. Today, those moves are contained. The NDX is being driven by steady trend strength rather than panic speculation."

Semiconductor demand at unprecedented levels. TS Lombard via Daily Chartbook: "Semiconductor names have made new highs amid continued strong demand for chips. Global semiconductor sales and Taiwan export orders are recording unprecedented growth rates."

Watch this: hyperscaler 'other income' boosting Q1 earnings. Ben Snider, Goldman Sachs via Daily Chartbook: "Hyperscalers' earnings growth was boosted by 'other income' in Q1 — mostly related to equity stakes in private companies — to the largest degree in at least a decade." Something to watch as a one-time tailwind fades.

One of the best earnings seasons in 20 years. Jim Reid, Deutsche Bank via Daily Chartbook: "This is one of the best earnings seasons in 20 years. All 11 top-level sectors are expected to show year-over-year earnings growth for the first time in 4 years."

Interesting Reads

• How AI may usher in a new era of shared reality — The Argument
• How "The Bear" and "Unreasonable Hospitality" have made the restaurant business more difficult — Food + Wine

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