Canton got hit with rain most of the weekend, which meant fewer miles outside and a lot more time at my desk than I'd planned. Turns out that wasn't a bad trade. I dug into a stack of research, and there's a lot happening this week that I can't wait to share with you.
Bank earnings kick off with expectations already stretched. Wednesday's CPI report could be the single biggest data point of the year. Crude oil is pulling back, but there's a wrinkle in that story most people are missing. The AI headlines aren't slowing down. And SpaceX is sitting on a price level that could decide the fate of an entire sector.
Let's walk through all five. I'll go deeper on a couple of these later in the week, but for now, here's the lay of the land:
1. Banks Kick Off Earnings Season With a High Bar to Clear
Financials open the show this week. JPMorgan, Goldman Sachs, Bank of America, Wells Fargo, and Morgan Stanley are all scheduled to report earnings. All together, 31 of the S&P 500 companies will issue their earnings reports over the next 5 days.
Here's what's interesting to me: Investment banking is booming right now. IPOs like SpaceX. Companies raising fresh capital through follow-on stock and bond offerings.
These deals create real fee revenue for firms like Goldman and Morgan Stanley, and these profits don't directly depend on which direction the market moves.
But there's a catch. Analyst expectations have crept higher heading into this earnings season compared to where they stood ahead of Q1.
That raises the bar. When expectations are already elevated, it gets harder for companies to actually beat them.
It's the classic "buy the rumor, sell the news" setup, which is worth watching closely as results roll in.
2. Wednesday's CPI Report Could Be the Big One
Wednesday's inflation report has the potential to be the most important data release of the year.
Here's the setup: Crude oil has fallen sharply over the last two months. On the surface, that argues for some relief in the headline CPI number. (Cheaper oil usually works its way into cheaper everything, from gasoline to shipping to the cost of just about anything that needs to move from point A to point B.)
But I want to flag something before you get too comfortable with that "relief at the pump" story, because there's more to it than headline oil prices.
The US has been releasing roughly 1 million barrels per day from the Strategic Petroleum Reserve.
That's been quietly propping up supply and helping keep a lid on prices even as tensions in the Middle East and Eastern Europe would otherwise argue for higher crude.
The problem is, this pace isn't sustainable. At the current rate, the SPR crosses below its minimum operable capacity before the end of the year.
When that release slows down or stops, one of the things holding oil prices artificially low goes away.
That's a real headwind for the "inflation is cooling" narrative, even if this week's CPI print comes in soft.
I don't think this shows up in Wednesday's number. But it's exactly the kind of thing that can turn a "one good report" into a "one and done" situation for anyone hoping inflation just quietly fades away.
Add in a new Fed chair in Kevin Warsh who has already signaled a more hawkish lean, and you can see how a hot CPI print could trigger a much bigger reaction than usual. This is a report to watch closely and I'll keep you posted on what I see.
3. Crude Pulls Back, But Crack Spreads Tell the Real Story
Speaking of oil, here's the part of the story that isn't getting nearly enough attention.
Crude prices have come down. But diesel, gasoline, and jet fuel haven't followed. That gap between what refiners pay for crude and what they charge for refined products is called the crack spread, and it just hit a record high this past week.
Why is this happening? A few things are colliding at once.
Russia has suspended diesel exports amid Ukrainian drone strikes on its refineries. Renewed fighting between the US and Iran has kept tankers stuck and squeezed supply further.
US refiners have been running near full capacity, exporting record volumes of fuel to fill the gap left by everyone else.
The bottom line is that refiners are pocketing the difference right now, and profit margins in that business are as good as they've ever been.
I'm watching names like Valero (VLO), Marathon Petroleum (MPC), and Phillips 66 (PSX) as ways to play this trend, along with the energy names already on my watch list.
This won't last forever. But right now, it's a real and growing tailwind for anyone positioned in the refining space.
4. The AI Saga Keeps Rolling
I could write a full article just on the AI headlines from the last week alone.
Google made news around its cloud computing business.
Apple is reportedly partnering with Broadcom and TSMC on custom AI chip manufacturing.
DeepSeek is developing its own new AI chip.
The news flow isn't slowing down, and I don't expect it to anytime soon.
My approach here hasn't changed. I'm not chasing every headline.
I'm looking to buy the "picks and shovels" names, chips, power management, infrastructure and industrials tied to AI buildout, when they pull back on short-term noise. More on specific names later this week.
5. SpaceX's $150 Line in the Sand
Here's one of the more intriguing "inside baseball" Wall Street stories.
SpaceX (SPCX) set its IPO price at $135 and started trading at $150.
Right now, the stock is sitting very close to that $150 level, and investment banks are defending it hard. Eighteen firms initiated coverage last week, seventeen of them with buy ratings, and an average price target roughly 72% above where the stock closed.
Here's why this matters beyond just one stock.
If $150 holds and SPCX starts to bounce, I think it drags a whole cohort of space names higher with it.
Satellite companies, specialty materials, launch services, communications technology. I laid this out in more detail in my "From Seat 5C" piece a couple weeks back, and I still believe the follow-on effect here could be significant.
But if that $150 level breaks, and especially if $135 gives way, I think this becomes a "reset season" for the group. That kind of break usually means weeks, if not months, of chart repair before these stocks are ready to run again.
This is a level worth watching every single day this week.
Where This Leaves Us
Five storylines, all developing at once:
Bank earnings kick off with a high bar to clear
CPI Wednesday could be the year's biggest report, and the SPR situation means "relief at the pump" may not last
Crack spreads are quietly making refiners a lot of money
AI headlines keep coming, and I'm buying pullbacks in the picks-and-shovels names
SpaceX's $150 level could decide the next move for an entire sector
I'll dive deeper on several of these as the week unfolds, including a full breakdown of the bank earnings reaction, what Wednesday's CPI report actually means for your positions, and a closer look at the refining trade.
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