A new week, another chapter in the Hormuz saga. Mondays tend to bring surprises, and today’s storyline - “Project Freedom” - comes with a clear headline: the U.S. military is preparing to escort ships through the strait starting now. Donald Trump set the plan in motion just hours ago. The Pentagon says the operation will involve naval ships, fighter jets, and drones, with roughly 15,000 personnel. Details are still fuzzy - as they usually are early on - but the goal is straightforward: help the hundreds of stranded vessels get moving again. As of Saturday, traffic was running at just 9% of normal levels.

Markets reacted quickly. Oil prices pulled back - but didn’t crash. Brent, which peaked at $125 last Thursday, is now around $108. WTI is sitting near $101.50. Still high enough to keep pressure on consumers and businesses - and politically sensitive. In the U.S., the bankruptcy of Spirit Airlines - with 210 aircraft and about 11,000 employees - highlights the real-world impact of elevated fuel costs.

That’s why the White House has every reason to defuse the situation. Before announcing “Project Freedom,” Trump described recent talks with Tehran as “very positive” - a phrase that can mean almost anything, but at least signals ongoing dialogue. Markets are taking that as a modest positive and continue to grind higher.

But geopolitics isn’t the only driver. Earnings have been solid, and more importantly, investors are still piling into anything tied to AI. That’s where the money is- and it’s showing. The FOMO trade is alive and well. Is it fully rational? Not really. Completely irrational? Not either. Investors know where the momentum is.

Friday (a holiday in several markets, but not the U.S.) followed the now-familiar pattern: AI stocks rallied hard, while the rest lagged. Since the late-March low, the Nasdaq 100 is up 20.5%, versus 7.6% for the S&P 500 Equal Weight Index - a clear sign that megacap tech continues to drive the market.

What to watch as the week kicks off:

  • Donald Trump has threatened a 25% tariff on European cars, accusing the EU of not holding up its end of trade deals. Some see it as a shot at Germany after Chancellor Friedrich Merz criticized the Iran operation.
  • OPEC+ has approved a third production increase since the Strait of Hormuz disruption.
  • China has told its companies to ignore U.S. sanctions on five local refineries tied to Iranian oil.
  • Japan likely stepped in to support the yen late last week, though officials haven’t confirmed it.
  • Marco Rubio is expected to meet Pope Leo XIV on Thursday.
  • On the macro side, the big one is U.S. April jobs data on Friday. The Reserve Bank of Australia decision Tuesday should matter less.
  • Earnings are still front and center. In the U.S., watch Palantir Technologies, Advanced Micro Devices, and The Walt Disney Company. In Europe: UniCredit, Novo Nordisk, AXA, and Engie.

In Asia-Pacific, the AI rally is back. South Korea is up 4.5% and Taiwan 4.4%, driven by names like SK Hynix, Samsung Electronics, and TSMC. Hong Kong is up 1.7% and India 0.7%. Australia is lagging-limited AI exposure and rising costs are weighing on companies, with the ASX 200 down 0.4%. Japan is closed for Golden Week.

Today's economic highlights:

Today’s agenda includes: manufacturing PMI data in Spain, Switzerland, and Italy; the ECB’s Survey of Professional Forecasters in the Euro Area; in the United States, factory orders (monthly) and a speech by John Williams. See the full calendar here.

  • Gold: $4,572
  • Crude Oil (BRENT): $109.88 (WTI) $102.22
  • United States 10 years: 4.38%
  • BITCOIN: $78,920

In corporate news:

  • UBS Group plans to offer private and savings accounts in the United States from 2027.
  • UCB is set to acquire Candid Therapeutics for up to 2.2 billion USD.
  • ThyssenKrupp and Jindal Steel have suspended talks regarding a potential stake acquisition by the Indian group in the German company.
  • EQT is reportedly considering an initial public offering of Audiology on Wall Street, according to several sources.
  • Novartis has secured approval from Health Canada for Fabhalta, an oral treatment for adults suffering from C3G.
  • Burkhalter is acquiring Progressio Holding and its subsidiary Anplag.
  • Spirit Airlines, through Spirit Aviation Holdings, has begun liquidating its operations, in the absence of a credible rescue plan.
  • GameStop is seeking to acquire eBay for 55.5 billion USD, or 125 USD per share, in a bid to create a rival to Amazon.
  • Exxon estimates that it will take one to two months for flows to return to normal following the reopening of the Strait of Hormuz.
  • US antitrust authorities have approved Intel’s acquisition of SambaNova Systems.
  • The FDA has granted early access to daraxonrasib, developed by Revolution Medicines, for the treatment of pancreatic cancer.
  • Meta is entering the humanoid robotics space through the acquisition of Assured Robot Intelligence.

Analyst Recommendations:

  • Alphabet: China Renaissance Research maintains Buy, raises price target from $400 to $485.
  • AptarGroup: Wells Fargo maintains Overweight, raises price target from $144 to $145.
  • Ares Management: BMO Capital Markets maintains Market Perform, raises price target from $104 to $125.
  • Becton, Dickinson and Company: TD Cowen maintains Hold, lowers price target from $189 to $163.
  • Blue Owl Capital: BMO Capital Markets maintains Outperform, raises price target from $9.50 to $11.50.
  • Broadridge Financial Solutions: UBS maintains Neutral, lowers price target from $250 to $165.
  • Cava Group: Citi maintains Neutral, raises price target from $75 to $92.
  • Church & Dwight: UBS maintains Neutral, raises price target from $98 to $100.
  • eBay: Truist Securities maintains Hold, raises price target from $94 to $105.
  • Estée Lauder: UBS maintains Neutral, raises price target from $75 to $85.
  • Franklin Resources: BMO Capital Markets maintains Outperform, raises price target from $30 to $35.
  • General Dynamics: Goldman Sachs maintains Sell, lowers price target from $327 to $313.
  • Invesco: BMO Capital Markets maintains Outperform, raises price target from $28 to $31.
  • Linde: Goldman Sachs maintains Buy, raises price target from $515 to $585.
  • LyondellBasell: RBC Capital maintains Outperform, raises price target from $91 to $94.
  • MasTec: Citi maintains Buy, raises price target from $440 to $483.
  • Meta Platforms: China Renaissance Research maintains Buy, lowers price target from $910 to $825.
  • Microsoft: China Renaissance Research maintains Buy, lowers price target from $630 to $550.
  • Quanta Services: UBS upgrades to Buy (from Under Review), raises price target from $646 to $900.
  • SN: Canaccord Genuity maintains Buy, raises price target from $160 to $161.
  • T. Rowe Price: BMO Capital Markets maintains Market Perform, raises price target from $98 to $110.
  • Tenet Healthcare: Goldman Sachs maintains Buy, lowers price target from $265 to $252.
  • TPG: BMO Capital Markets maintains Outperform, raises price target from $44 to $52.
  • Verisk Analytics: Jefferies maintains Hold, raises price target from $190 to $192.
  • Welltower: BMO Capital Markets maintains Outperform, raises price target from $240 to $245.
  • Woodward: Goldman Sachs maintains Buy, raises price target from $443 to $468.