In this May 14, 2026 morning market commentary, host Kenny Polcari delivers a rapid-fire overview of today’s financial landscape, blending macroeconomic data, market performance, and a culinary interlude. He notes that despite a scorching 1.4% month‑over‑month rise in producer‑price index (PPI) and a year‑over‑year 6% rate—signalling re‑accelerating inflation—U.S. equity indices (S&P 500 and Nasdaq) posted fresh all‑time highs, driven by AI‑related mega‑cap stocks (the “Mag 7”). The bond market tells a contrasting story: 2‑year yields sit near 4%, 10‑year near 4.5%, and the Treasury sold $25 billion of new 30‑year bonds with a 5% coupon, pushing real yields above 5%. Oil trades around $100.70 per barrel amid Middle‑East tension, gold steadies near $4,700, and the VIX remains low, indicating complacency. Upcoming data releases (retail sales, jobless claims, manufacturing) and today’s key earnings—Applied Materials—are highlighted. The Cerebras Systems IPO, priced at $185 and 20‑times oversubscribed, underscores continued investor appetite for AI infrastructure. Polcari warns that higher long‑term yields will filter through mortgages, credit, and corporate financing, urging disciplined, quality‑focused investing and caution against FOMO. The segment concludes with a detailed Pasta Norma recipe, complete with cooking steps and serving suggestions, framing the market talk within a lifestyle context.
Chapters
Well, good morning. Yes, it's me, Kenny Polcari, your host of the party. And here I am back in Florida, and today is Thursday, May 14th, 2026. And here are the things that you need to know to get your day started. Well, PPI is scorching hot, yet the S&P and NASDAQ printed all new time highs. The bond yields are surging, and the Treasury sells 30-year bonds with a 5% coupon. Oil is down, gold is steady. Retail sales come out at 8:30, and and Cerebris IPO. It got priced last night at $185, 20 times oversubscribed. And what are we having dinner tonight? We're gonna have the pasta norma. All right, well, good morning, America. Wake up and grab the coffee and let's go because the market continues to do what many thought was impossible, rally in the face of rising inflation, rising yields, and rising geopolitical risk. Yesterday's market action was another reminder that Now the Momo guys remain firmly in control. The S&P and the Nasdaq once again closing at fresh all-time highs, even though underneath the surface the story was much narrower than the headlines suggest. The Dow lost 67 points, the S&P added 43, the Nasdaq surged by 315 points or 1.2%, the Russell ended essentially flat, the equal-weight S&P lost ground, the Mag 7 exploded higher by another 2%. Or 700-some-odd points. Translation: investors, traders, and algos continue piling into the AI semis and mega-cap tech while much of the broader market is struggling to keep up. And all that happened despite one of the hottest inflation prints we've seen in years. Producer prices exploded higher by 1.4% month over month versus the expectation of a half a percent, as energy, shipping, insurance, and logistic costs all that we've been talking about continue ripping higher. On a year-over-year basis, the PPI is now running at 6%, well above the 4.8% expectation and sharply higher than last month's 4% read. So let's call it what it is— inflation is reaccelerating. And if this conflict in the Middle East is not resolved soon, and I mean soon, then the story is going to get worse before it gets better. The longer oil stays elevated and the longer shipping routes remain disrupted, the more pressure gets embedded into the global economy. And if producers are paying more, you better believe consumers are going to pay more as well. Period. The end. Companies are not charities. They exist to make money, and they pass— they will pass those higher costs directly through higher prices and reduced discounts and margin— to reduce discounts and margin and protect their margins. Which means the inflation fight remains front and center, and incoming Fed Chair Kevin Walsh just inherited a much more difficult job. And if Trump and CB Mirren continue to think that rates have to go down in the face of reaccelerating inflation, surging producer prices, and oil above $100, then somebody may want to dust off the old Econ 101 textbook. Cutting rates into rising inflation is exactly how you risk losing control of the bond market, the dollar, and inflation expectations all at once. And speaking of the bond market, it is screaming caution. Slippery when wet, right? This week's hot CPI and scorching PPI reports have forced investors to completely rethink the Fed path all over again. The fantasy narrative of multiple rate cuts is now dead on arrival. The new narrative: higher for longer and possibly even higher still. Think rate hike. As a result, yields continue marching higher all around the globe. This morning, the 2-year Treasury is yielding 3.97%. The 10-year is yielding 4.46%, while the 30-year is pushed above 5%, trading as high as 5.05% yesterday. And that matters a lot. In fact, yesterday the Treasury sold $25 billion of brand new 30-year bonds maturing in May of 2056, carrying a 5% coupon. And even then, investors demanded more yield if the government wanted their money. So therefore, the bond priced below face value, pushing the real yield to roughly 5.046%. Now let's translate that into plain English. The United States government is now officially paying more than 5% interest to borrow money for the next 30 years. Think about that for a minute, and then think about this. Janet Yellen had the opportunity to lock in generational debt at 1.8%, but she chose to stay in the short end of the pool. Now, Scotty Besson is the one that's forced to deal with this reality. And the message from the bond market is crystal clear. Investors no longer believe that we're returning to the near-zero rate world of the early 2020s. Why? Because inflation expectations are rising again. Oil prices remain elevated. Supply chain pressures are building. Geopolitical tensions are intensifying. And investors are demanding to be compensated for taking that long-term inflation risk. And here's why you should care. Higher long-term yields eventually work their way through everything— mortgage rates, credit cards, auto loans, commercial real estate financing, corporate borrowing costs, and ultimately equity valuations. So while the stock market continues celebrating the AI story, the bond market is quietly telling you a very different story, one where inflation remains sticky, rates remain elevated, and the era of free money is officially dead. This morning, oil is trading at $100.70, down about 25 cents after overnight headlines suggested that OPEC+ members may raise their production targets later in the year. That's helpful, but let's be honest, no one is meaningfully increasing supply as long as the Strait of Hormuz remains unstable, which is why the real solution remains the same. Reopen the strait. If that happens, I do think that oil will begin working lower over time, perhaps back into the mid-80s or even the high 70s. Not gonna happen immediately, not pre-conflict pricing, but certainly better than where we are today. And if it doesn't happen, then the risk of oil blasting up and through $110 grows significantly, and that only makes the inflation story worse. Gold remains there, $4,700, and continues reflecting investor anxiety around inflation, geopolitics, and that policy uncertainty, right? It's stuck in this very tight range. Meanwhile, the VIX remains remarkably calm, below 18, which tells you complacency is still deeply embedded in this market, and that makes no sense. Today's economic calendar matters a lot. At 8:30, we're going to get, uh, retail sales— retail sales ex autos— and weekly jobless claims. Investors are going to be laser focused on whether the consumer is finally beginning to crack under the weight of these higher prices and borrowing costs. Tomorrow, we're going to hear from the Empire Manufacturing, which is kind of New York State region, industrial production and capacity utilization. All important reads following what we just got in terms of this week's inflation shock. Now, there are a handful of earnings reports today, but the one that everyone really cares about is going to be Applied Materials, and that happens after the bell. Now, AMAT, AMAT, which is the symbol, sits right in the middle of the AI infrastructure buildout story, and investors are going to be listening closely for commentary around the hyperscale demand, foundry spending, AI-related CapEx spending, China exposure, and semiconductor backlog growth. All the same that they've been listening to all earnings season. Right now, the AI trade is carrying this market all the way up. And overnight, the other big buzz was Cerebras Systems IPO, which was an absolute blockbuster. This isn't just another AI IPO. Investors are betting Cerebras could become a legitimate next-generation AI infrastructure player because of its wafer-scale engine technology. Known as WSE. Essentially, it's one giant processor designed to eliminate the bottlenecks that slow traditional AI systems when you try to daisy chain a bunch of the small ones together. The IPO priced at $185 a share, which was $25 above the revised range and was reportedly 20 times oversubscribed. That tells you all you need to know about investor appetite for anything tied to AI infrastructure. And right now, whether Cerebras, ultimately becomes a true long-term threat to NVIDIA remains to be seen. NVIDIA still owns the ecosystem and they own the software stack, but this IPO is important because it shows investors are already searching for the next generation of AI winners. European markets are all modestly high this morning while the US futures are pointing to another positive open. UK Prime Minister Starmer is under fire for his lack of leadership. Rumor has it that West Streeting He's the Health Secretary, is making a run for his seat. Stay tuned because we're gonna see how that plays out. Now this morning, Dow futures are up 300. The S&P's are higher by 15. The NASDAQ futures are up 44 and the Russell is flat. Bitcoin is trading at $79,000. Ethereum's at $2,250 and Solana is trading at $90.92. The S&P closed at 7,444, another new all-time high. The mobile guys are giddy. They are chasing AI, dismissing the geopolitical risk, ignoring rising yields, and looking straight through what was clearly a hotter inflation report. My advice: enjoy the ride, but stay disciplined. Do not make emotional FOMO-driven decisions. Momentum can feed on itself for longer than anyone expects, but when markets begin feeling frothy, you have to acknowledge the risk. Remember, stay focused, stay in quality, and stick to your plan and talk to your advisor, uh, as he'll try to help you manage your way through all the noise. Okay, what are you having tonight? We're gonna have Pasta Norma. Now, it's penne with eggplant and rigotta salata. It's a staple Sicilian dish, and it gets its name from the classic Vincenzo Bellini opera Norma. Theater director Nino Martoglio honored this dish by calling it Pasta Norma as a way to express the affection he found in both the dish and the opera. It's simple to make, it's pleasing to the palate. Dress the outdoor table with fresh linens and colorful dishware. Bring out some candles, put on some soft music, fresh Italian bread and a nice Chianti, and enjoy this meal as the sun sets. You want to create the mood and you want to live the dream. Okay, so for this you need penne, penne rigate, right? That's a pasta. You need eggplant, rigate salata, crushed tomatoes, onion, olive oil, fresh basil, garlic, fresh muzz if you want, and salt and pepper. And of course you need Parmigiano cheese. Bring a pot of salted water to a rolling boil, put it on the back burner. Cut up your eggplant into cubes, leaving the skin on. Place in a colander, sprinkle it with salt, let it sit for 30 minutes or so. It'll draw out the excess water and make the eggplant sweeter. Now you're gonna, in a big sauté pan, you're gonna heat the oil, add the garlic and sliced onion, sauté until it's nice and golden. Now you're going to add the eggplant and stir it about 3 minutes or so, right? You want to get the eggplant all covered in, in, in some of that oil that's there, right? Let it soak it up. And then you're going to add the can of crushed tomatoes, season it with salt and pepper, bring it up to a boil, then turn the heat down to simmer and cover and let it cook for about 20 minutes or so. You want to stir it occasionally. Now cook the penne rigate, put it in the water, cook it for about 8 minutes or so until it's al dente. Strain it, always reserving the water. Put it back into the pot, add a little bit of the water back to re-moisten it. And then add some sauce, stir it around, add some fresh basil and the grated rigotta salata. You want to serve it immediately in warm bowls and then top it with the remaining sauce. You can always have fresh grated Parmigiano cheese on your table for your guests, and trust me, you will love this dish, and you can thank me later. Until tomorrow, take good care.
