Still waiting for Iran
The world waits for Iran’s response to the U.S. peace proposal. The CIA says Iran can endure the blockade for another four months.
President Trump visits China this week, May 14-15. China is exerting pressure on Iran to open the Strait. The Chinese Communist Party needs a strong global economy so that it can continue to export its surplus goods production.
Will China try to use its influence with Iran to win concessions from Trump?
If the countries of Europe and Asia want the Strait to be open, then why don’t they join with the United States and use military force to end Iran’s blockade? High oil prices hit these countries hard.
Economic damage to the United States from the closure of the Strait is minimal. The U.S. is a net exporter of oil and liquified natural gas.
The political pressure on Trump to end the war was reduced last week by three events: the Virginia state Supreme Court’s decision on redistricting, the United States Supreme Court’s ruling on guaranteeing Black representation in Congress and Florida’s passage of a redistricting plan that will probably result in four more Republican members of the House and of course, four fewer Democratic lawmakers.
https://www.nytimes.com/2026/05/09/us/politics/midterm-redistricting-house-map-republicans.html
Markets and Stocks
Though the big picture remains very positive for U.S. equities, the market is over bought. Euphoria is building in certain sectors. But my advice is to continue to be fully invested with the knowledge that a short term pullback is probable. Trying to time the market is impossible. Trading in and out of stocks is a losing strategy. Buy great stocks and ride the ups and downs with the knowledge that the trend remains positive.
For example, Micron acted like a meme stock last week. The stock is up on a spike as are other chip stocks. But I don’t recommend selling the name with the expectation of buying it back. Top slicing is okay but if you do take some profits, I suggest putting the proceeds into names like Apple, Microsoft or consumer stocks such as Coca Cola or Pepsi. Stay fully invested because even though stocks are due for a pullback, such a correction may not occur for quite some time. No one knows what happens next.
I continue to favor the AI stack.
Tokens
AI models read and write in TOKENS, not full sentences. As a rough rule of thumb, 100 tokens equals 75 words. Cost per token is falling but demand for tokens is rising much faster than costs are falling, witness the shortage of computing capacity.
Demand for tokens and the expectation of monetizing that demand is driving the incredible capital investment in the build out of AI, especially as reflected in the construction of data centers.
Anthropic continues to experience awesome growth. April revenues were 50% higher than revenues in March.
Nvidia, ASML, TSMC, Micron, Broadcom, Applied Materials, KLA Corp and Lam Research all remain great investments. KLA reports numbers this week.
Nvidia reports on May 20. It will be another raise and beat quarter. The company is growing earnings and revenues at over 75%. Microsoft says it cannot buy as many Nvidia GPUs as it wants. This situation will continue for all of 2026.
The photonics stocks: Corning, Ciena, Coherent and Lumentum also remain terrific investments. Photons are replacing electrons in transmitting data. Photons are faster and can be engineered to produce less heat.
The hyper scalers too are extremely attractive.
Intel
I remain cautious on Intel.
The company’s chip manufacturing facilities continue to lose money. If Apple does reach a fabrication deal with Intel, it will be for low value chips. Intel is not competitive with TSMC or fabs in Japan or South Korea.
Is Apple ass kissing Trump with its announcement about a preliminary fab agreement with Intel?
Quantum Computing
Watch the quantum space. Honeywell’s Quantinuum filed to come public. Quantinuum will be doing a road show and publicizing the quantum sector. Stocks in the area are high risk.
https://www.reuters.com/technology/honeywells-quantinuum-makes-us-ipo-filing-public-
Economics
Goldman Sachs says that the Fed will not cut rates until Q4 at the earliest.
On Tuesday the report on April consumer price inflation will be out.
On Wednesday April producer price inflation will be out.
On Thursday, April retail sales data will be released.
This made me laugh. After all the hysteria about egg prices, adjusted for inflation, egg prices in the United States are now at all time lows.
Social Commentary
George Will of the Washington Post
He writes: many Starbucks workers agitating for unionization are more concerned about far left policies than wages and working conditions. They berate Starbucks for inadequate commitment to LGBTQ issues. They are angry that Starbucks does not support Hamas, an organization that has a goal, genocide of the Jewish people.
Workers at Apple are frustrated that they can’t afford to pay $150 to see Beyoncé, and that subscribing to Hulu is so expensive.
My two cents: if they don’t like their jobs, they can quit.