TACO is back | Ertragssaison beeindruckt weiterhin
The episode covers Trump's backtracking on Iran ceasefire deadlines ('TACO' - Trump Always Chickens Out), Wall Street's continued resilience despite Middle East tensions, and a strong Q1 earnings season featuring standout results from GE Vernova, Boeing, and Philip Morris. The host argues that markets are increasingly pricing in de-escalation and refocusing on strong corporate fundamentals rather than geopolitical headlines.
Summary
The episode opens on April 22nd with the host introducing the 'TACO' theme — Trump Always Chickens Out — after Trump repeatedly threatened that the Iran ceasefire deadline would not be extended, only to reverse course again by allowing it to remain open indefinitely. The host notes this follows the same pattern seen around the Liberation Day tariff announcements, where Trump escalates, markets dip, and then he retreats. Reports from Axios, CNN, and the Wall Street Journal indicate Iran has been given 3-5 days to reach a deal, and that significant progress has been made in US-Iran negotiations. NBC News cautions that Iran's weapons arsenal remains substantial, while CNN notes the US has also significantly drawn down its own weapons stockpile through attacks.
Despite rising oil prices (WTI near $90), Wall Street continued to rally. The host explains this as the market pricing in de-escalation rather than further conflict, noting that Trump's lack of good escalation options is well understood by investors. Airlines and travel companies face pressure from surging fuel costs — Lufthansa is cutting nearly 20,000 flights, and TUI has already issued guidance cuts — but even these reactions have been relatively muted in equity markets.
On the technical side, the host cites Fundstrat's Mark Newton, who notes that the S&P 500's short-term uptrend remains intact above the 5,993 level, market breadth is solid, and while momentum indicators show some overheating, conditions are not extreme enough to warrant betting against the rally. Newton is bearish on oil longer-term, expecting WTI to pull back significantly into year-end after potentially reaching $96.
The earnings season is highlighted as a major positive force. GE Vernova reported blowout results with order bookings up 71%, raising full-year guidance. Boeing posted a smaller-than-expected loss with significantly better-than-expected free cash flow and a growing $695 billion order backlog. United Airlines missed Q2 EPS guidance slightly at $1.50 vs. $1.75 expected, but full-year EPS guidance of ~$9 was only $0.10 below consensus, better than feared. Philip Morris, AT&T, Intuitive Surgical, and CME Group all reported solid results. Vertiv beat on revenue (+30%) but only matched estimates, causing slight profit-taking. Capital One disappointed with higher-than-expected loan loss provisions of $4.1 billion, $300 million above estimates.
Looking ahead, the host flags ServiceNow, IBM, Tesla, Texas Instruments, and Southwest Airlines reporting that evening, SAP the next day, and a Google Cloud CEO keynote. Adobe announced a $25 billion buyback representing roughly a quarter of its market cap. Analyst upgrades include Airbnb (Wells Fargo, Buy, $178), Google (BMO Capital, Buy, $410), and SAP (HSBC, Buy, €182). United Health received multiple target price increases following strong earnings showing declining medical costs. SpaceX's reported interest in acquiring Cursor for up to $60 billion, or paying a $10 billion fee, is noted as a potential catalyst for its anticipated $2 trillion IPO.
Key Insights
- The host argues that Trump's repeated pattern of threatening escalation and then backing down is being interpreted by Wall Street as a structural signal of de-escalation, not just a one-off, which explains why stocks continue to rise even as oil prices climb.
- Mark Newton of Fundstrat argues the S&P 500's short-term uptrend remains technically intact and that momentum indicators, while showing some overheating, are not yet at extremes that would justify shorting the rally — he recommends waiting for clear trend deterioration signals first.
- The host observes that the current market behavior mirrors the post-Liberation Day pattern, where an initial selloff was followed by a refocus on fundamentals, suggesting the market has developed a template for processing Trump-driven volatility.
- GE Vernova's order bookings surged 71% year-over-year, which the host presents as emblematic of how Corporate America's underlying earnings power remains largely unaffected by Middle East tensions, contradicting bearish macro narratives.
- Capital One stands out as an outlier in the financial sector by reporting $300 million more in loan loss provisions than expected ($4.1 billion total), while most other major banks and credit card companies have not shown this trend, suggesting company-specific rather than sector-wide credit deterioration.
Topics
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