Let's get to the big story breakdown.
The S&P 500 and Nasdaq entered the first full trading week of May at record highs.
Google rose 34% in April, its best month since 2004.
Tech has been the hot sector that's driven the market rebound.
Now outside the MAG 7, we've seen names like Intel, Marvel Tech, Micron, and Sandik soar as key parts of the AI infrastructure trade.
But oil prices remain elevated, crude oil remaining at the $100 level last week, while US gas prices have hit a new high for the year.
Investors will be eyeing the pivotal April jobs report, which comes out Friday.
Now joining me to discuss more is Ted Thatcher, founder and President of Bright Lake Wealth Management.
Ted, thank you so much for joining us today.
Johnny, it's amazing to be with you.
We're looking at an incredible market right now.
You know, the cloud revenues have driven and pulled the market absolutely into the clouds, and we're processing it all, you know, bit by bit here.
So much of the AI trade is really coming to bear right now.
So Ted, what do you make out of the out of the rally in tech that we've seen coming off the Max 7 reports?
Yes, so you know.
The street has been demanding ROI on that $600 billion of AI cap exp that's now been revised to $700 I think and $25 billion just this year and we're actually getting for the first time, I think this quarter a glimpse into the ROI.
We're seeing revenues go up.
We're seeing margins expand.
Operating margins and gross margins on these chips, on the memory products, and ultimately that's what the streets wanted to see.
It's been demanding the ROI and we're starting to see it.
So tech is driving the April market rebound.
We've seen oil and yields climb higher.
Take us through oil's renewed rally and its impact on the market and the economy as gas prices hit a high this year.
You know it's interesting when we ask ourselves, hey, how is the economy doing?
It's almost like we have to make this distinction.
What economy are we talking about?
Are we talking about the financial economy here on Wall Street or are we talking about the real economy for consumers on Main Street?
And ultimately, you know, while I think the street has kind of tried to move on in some ways from the war in Iran, the energy prices are forcing The real economy to reckon with what that will mean in terms of costs.
Consumers are focused on how this affects their pocketbooks.
And when we've seen oil now at $100 a barrel for what is it going on two months, there's just no way that that's not going to ultimately be a bubble, an inflationary bubble that has to move through the economy, at least until we see an end to this war.
So tell us about the impact of inflation that we've seen in The March report and what we're expecting this week from the jobs report, so I mean obviously we saw PCE come in at 3.5% year over year increase, very hot.
You know the truth is that hasn't even trickled down to those core numbers.
The core PCE still was up 3.2% year over year, but I expect that to continue to rise.
When we look at the prices of energy that contributes to about.
40% of what we go and buy down at the grocery store.
And so when you pair that with what we're seeing, of course you mentioned the 10 year coming in at 3.4% this morning, I think the market is really concerned potentially here just about well how long this Iran war will continue to go on.
So specifically what has jumped out to you about the earnings season?
You know, I think when I really look under the hood of the earnings season, obviously there's been a lot of expectations around beats.
I think about Micron.
Obviously revenue was up.
AMD is coming out this week.
We expect them to beat, but what I'm looking at and what has stood out to me most is the margin.
If we look at the gross margin on these chips on the.
If we look at the operating margin that we've seen expand, that is what I think really has allowed the market to not just hit 1 or 2 or 3 highs, but a 4th high last Friday.
So let's talk about Trump and Cuba.
Trump is saying that Cuba is next.
Do you think that this could be a market factor, and what's your market outlook for May and beyond?
You know, when it comes to Cuba, I think at the end of the day whether it's Iran, if it's Venezuela, if it's Cuba next, we've just been living in very I would say volatile times on the war front.
I hope certainly that we don't get into some prolonged situation with Cuba or others.
In terms of what I really see though for the markets themselves, I think the markets are in some way.
Moving on from the war, we're seeing these highs.
Wall Street is saying, hey, you know, while there may be some risks, whether it's in Cuba, whether it's in the Middle East or elsewhere, we see a path for return.
We see a path for growth, and really that's what I anticipate here.
That said, I am very much trying to keep my eye on what's going on with the consumer as well.
Awesome, thank you so much for joining us.
Thank you for your time.
