‘Strait’ of Confusion, Black Eye for Bezos’ Blue Origin, Sell … in May?
Iran deal is reportedly near, again …; Blue Origin proves ‘rockets are hard’ and remember what the say about May? Well…
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Financial markets firmed up yet again on Thursday as rumors or perhaps more than rumors swirled that some kind of agreement between the U.S. and Iran was at hand. The S&P 500 rallied for a sixth consecutive daily session to set up what could be a ninth consecutive “winning” week for our broadest large-cap index. Crude oil traded lower, again. Treasury debt securities rallied (pushing yields lower), yes, again.
Trading volumes sort of hung around where they have been all week though. The possible implication there would be that professionals might be exhibiting some caution ahead of hard news. Does this mean that institutional investors don’t trust that there will be a credible peace announcement? Maybe. Does this mean that even if there is a credible announcement, that after all of this market positivity, that there could be a “sell the news” event? Maybe. That would not surprise, would it?
Treasury Sec. Scott Bessent addressed the media from the White House on Thursday, filling in for press secretary Karoline Leavitt who is on maternity leave. Bessent got right into it, “We perhaps have the makings of a deal here. Everything depends on what the president wants to do, and President Trump is not going to make a bad deal.”
Bessent added that Iran still must agree to let go of its highly enriched uranium, while committing to never seeking a nuclear weapon. Iran must also agree to fully open the Strait of Hormuz.
Iran’s semi-official Tasnim news agency reported that a final text of said rumored deal was not ready. Iranian leadership is signaling that once they have agreed to specific wording that they can sign, they will make that announcement through the Pakistani officials that have acted as mediators. Iran is said to be asking for the unfreezing of assets held abroad currently under U.S. sanction. Iran is also asking for a role in managing the Strait of Hormuz as well as a durable ceasefire between Israel and their proxies in Lebanon.
Quote of the Day I
“One is defeated only when one accepts defeat.”
– Ferdinand Foch
Quote of the Day II
“This is not a peace. It is an armistice for twenty years.”
-Ferdinand Foch
(French General Ferdinand Foch made that comment in 1919 after learning of the terms of the Treaty of Versailles officially ending World War I. The comment proved to be quite prophetic.)
‘Rockets Are Hard’
A setback for the space exploration industry? Perhaps. A setback for Blue Origin? Definitely. On Thursday night, Blue Origin, which is Jeff Bezos’ space company, reported that it had “experienced an anomaly during today’s hotfire” when a “New Glenn: rocket was loaded with fuel and fired its engines to test its systems. That rocket exploded last night at Cape Canaveral, Florida, days ahead of the planned launch of 48 Leo internet satellites for Amazon (AMZN).
Blue Origin reported that all personnel were accounted for. However, several employees told reporters from the Financial Times that there had been severe damage to the company’s only launch pad as well as to other equipment. This explosion is expected to significantly impact Blue Origin’s launch schedule for 2026. Jeff Bezos posted to his X (Twitter) account, “Most unfortunate, Rockets are hard.”
Blue Origin has scheduled 12 launches for the “New Glenn” rocket for the balance of this year in an effort to better compete with Elon Musk’s SpaceX. SpaceX, of course, is set to go public next month and interest has been a driving force behind a recent rally that had broadly pushed other space industry stocks higher.
What does this do to Blue Origin customers? hard to say. Amazon had paid Blue Origin $2.7 billion to launch its satellites and needed to stay on schedule in order to meet the regulatory deadlines in place. Blue Origin also holds several government contracts and was awarded $468 million earlier this week by NASA to build two unscrewed landers as part of the larger plan to build a U.S. base on the moon. SpaceX may be the only competitor capable of picking up the slack. Other space stocks that offer launch services such as Rocket Lab (RKLB) are trading lower overnight.
Satellite Blues
Can’t get nothin’ on the dial
The frigin’ thing gone wild
All I get is the dumbed down news
New satellite blues
– A Young, M. Young (AC/DC), 2000
Quote of the Day III
“Rockets are cool. There’s no getting around that.”
-Elon Musk
Marketplace
Financial markets found buyers on Thursday, but not really all that broadly, nor with widespread enthusiasm. The S&P 500 gained 0.58% for the regular session as the Nasdaq Composite added 0.91%. That said, the small to midcap indices lagged the marketplace in general, gaining from 0.07% to 0.57%. On top of that, the KBW Banks gave up 0.08% while the Dow Transports surrendered 0.66% as the rails and maritime shipping companies stumbled on increased prospects for lower fuel prices.
Only five of the 11 S&P sector SPDR ETFs managed to close out the Thursday session in the green, led by health care (XLV) and technology (XLK). Big pharma ran the health care sector were higher as Eli Lilly (LLY) popped for a gain of 4.1%. Tech was buoyed by Snowflake’s (SNOW) 36.5% run for the roses. The utilities (XLU) rode out the day in the caboose. Despite health care’s leadership for the day, growth and cyclical sectors generally outperformed defensive sectors on Thursday. No, I am still not short any SNOW equity as we had discussed on Thursday. Perhaps this morning.
How was market breadth? Winners beat losers by a three-to-two margin at the NYSE and by a rough seven-to-four margin at the Nasdaq. Advancing volume took a “sort of” commanding 70.2% share of composite Nasdaq-listed trade on Thursday and a less impressive 58.3% share of composite NYSE-listed activity. Aggregate trading volume contracted on a day over day basis across the listings of both exchanges as well as across the membership of the S&P 500.
Sell in May…
… And go away? Today is the final trading day of May 2026. So far, the S&P 500 is up 4.92% month to date as the Nasdaq Composite has run 8.14%. The small cap Russell 2000 is up 4.88% for May, while the Philadelphia Semiconductors have popped for a stunning gain of 22.14% on top of a 38.42% run in April. Psst… The Philly Semis are now up 81.1% from the March low for that index. Maybe they meant, “Sell on the last day of May…”
Economics
(All Times Eastern)
08:30 – Goods Trade Balance (Apr-adv): Last $-87.45B.
08:30 – Wholesale Inventories (Apr-adv): Expecting 0.5% m/m, Last 1.3% m/m.
09:45 – Chicago PMI (Mary): Expecting 50.1, Last 49.2.
1:00 p.m. – Baker Hughes Total Rig Count (Weekly): Last 558.
1:00 – Baker Hughes Oil Rig Count (Weekly): Last 425.
The Fed
(All Times Eastern)
09:10 – Speaker: Reserve Board Gov. Michelle Bowman.
09:15 – Speaker: Philadelphia Fed Pres. Anna Paulson.
12:40 p.m.- Speaker: San Francisco Fed Pres. Mary Daly.
Today’s Earnings Highlights (Consensus EPS Expectations)
Before the Open: BKE (.74)
At the time of publication, Guilfoyle was long AMZN, RKLB equity.
