Market Tug-of-War: Earnings vs. Fed & Geopolitics | Pork Cutlet Milanese | Kenny Polcari

Well, good morning. Yes, it's me, Kenny Polcari, your host of the party. And today is Wednesday, April 22nd, 2026, and here are the things that you need to know to get your day started. Well, it's conflicting headlines leaving a mixed session for stocks yesterday. The ECO data, well, that remains fairly robust. Warsh though sends, uh, kind of a hawkish signal. Geopolitics is lingering under the surface, but earnings continue to impress. And what do we have for dinner tonight? We're gonna have the pork chop Milanese, capricciosa style. It is delicious. All right, so, well, good morning, but stay buckled in because the tape is trying to figure out what matters more. Is it geopolitics, the Fed confirmation, earnings, or fundamentals? And right now it's a tug of war. Tuesday was one of those sessions where the markets could not make up its mind. Stocks were all over the place as Wall Street played a tense waiting game on the Iran ceasefire, right? And also while they chewed on what Kevin Walsh was going to say versus what he meant, watching Apple pull an 11th hour CEO switch and monitor several key earnings reports just to get a read on the US economy. What started looking like a strong day because futures were all higher in the pre-market ended with stocks looking confused. At the closing bell, the Dow lost 295 points. The S&P was down 45. The Nasdaq gave up 145 points. The Russell, Russell lost 28 points. The transports once again though bucking the trend and they rose by 611 points. The equal weight S&P lost 48 while the Mag 7 gave up 224 points. All right, but look, let's start with earnings, right? Let's start with earnings, the Fed, and the ego data because right now the US and Iran conflict is getting old. On Tuesday morning, we got 15 reports before the opening bell, and only one of them missed. That's a 94% beat rate. And here's just a taste of what those highlights look like. UnitedHealth, right, that's a managed care sector. They surged more than 9% in early trading. First quarter results reflecting improving fundamentals. The CFO telling us that they were able to improve their medical cost ratio, which is a measure of how much the premiums are consumed by medical expenses. And how'd they do that? You guessed it, they raised the price. They also raised their 2026 outlook north of $18.25, and investors apparently loved it. The stock closed at $346, up 7%. 3M, it's diversified industrials. They beat on the top and the bottom line, solid earnings per share, improving margins, cost controls all working, but the stock got hit anyway. Because the forward guidance was cautious. Parts of the business are still soft. They didn't raise their guidance, and they flagged rising oil costs as, guess what, a headwind. In this take, that's not good enough. Stability doesn't get rewarded. Acceleration does. And so the guidance was weak. GE Aerospace— that's the aircraft industry, and this is where it gets interesting— they crushed it. Revenues up 29%, earnings per share of $1.86 versus $1.61. Backlogged for years, and the stock dropped 6%. It's not about GE, it's not— it's about the market. It's a market saying, okay, great, but what happens next? Higher fuel costs, economic uncertainty, global demand questions. That's what it was about yesterday for GE. And Halliburton, that's in the oil field services, uh, sector, also a beat, but the reaction was completely different. The stock moved higher because the story fits the macro the macro picture, right? Yes, there are near-term disruptions from the Iran situation, but higher oil prices and a stronger international backdrop reinforce the longer-term demand for energy services. Today it's going to bring us a basket of names that you need to pay attention to because of the role that they play in the economy. So think Tesla, Google, IBM, Boeing, ServiceNow, CME, uh, Philip Morris. L3Harris, uh, uh, and Dow Chemical, right? They represent EV and AI, communications, tech and enterprise AI, tech and enterprise software, capital markets, consumer staples, aerospace and defense, healthcare and biotech, and chemicals. And then you had the news from Apple. It's down 2% yesterday, not on earnings, not on guidance, but on leadership. Timmy Cook apparently is stepping down on September 1st after 15 years. And they're handing the reins over to John Ternus. Now earnings are due on April 30th, Cook's final report as the CEO, and so you better believe that call is going to be must-watch TV. And by the way, don't go selling your Apple because Timmy is stepping down. That would be a mistake. Now on to Capitol Hill, because that's the next interesting place. Kevin Walsh got grilled by the Democrats because why not? Lizzie Warren accusing him of being a sock puppet. Screaming that he's going to do what? Lower rates to satisfy Trump. Funny though, all she wanted JJ to do over the last year and a half was lower rates. She can't help herself. And then there was the question about his wealth, which is substantial. They pressed him to test him on his credibility and independence. Given his wealth, they wanted to know if he could truly represent Main Street, avoiding conflicts, and make tough calls like keeping rates higher for longer, even if it hurts markets. And that seems comical. Why? Because they don't care. They didn't care about Jay Jay's wealth, which is less but still substantial, and they didn't scream when he cut rates last fall, even when the market was not calling for lower rates. In the end, it appears as if the Walsh confirmation is going to be stalled anyway because Senator Tillis is refusing to move forward until the Justice Department drops the Fed renovation investigation. You know, the one that's gonna cost taxpayers $3 billion? I, I can only imagine who's getting rich on the back of that contract. And then we go to the eco data and it was strong. Retail sales up 1.7%, better than the expectation of +1.4% and well above the 0.6% last month. Ex-autos and gas up 0.6%, again above the expectation. Pending home sales, they surged as well, up 1.5% month over month and up 1.8% year over year when the expectation was for a negative 3% growth. Okay, so now we've got to circle back to the Iran headlines because like it or not, it is still the story that's simmering on the back burner and it is still pricing in oil volatility and risk. And so let's be clear, the strait is not really open. Not in any way that really matters. Shipping is still disrupted, traffic is a fraction of what it should be, and now Tehran is escalating it again, launching strikes at ships in the region and sending a very different message about who controls the flow of energy. Meanwhile, the ceasefire clock was ticking and the market was expecting a diplomatic solution, but JD Vance didn't show up in Islamabad, and that tells you everything. Talks are stalling and the tone is shifting. So stocks ended the day lower. And then right on cue at 4:30, Donald Trump jumps on Truth Social and says that the ceasefire is staying in place until Iran can get its act together and present a real peace proposal. Now Trump pointed to the fact that the country is rudderless, right? No one is really in charge. So who you gonna have a conversation with? Which, if you read between the lines, is just another way of saying we've gotta pause and not a solution. The US is going to keep the pressure on Iran, and Iran's going to keep pushing back. So what we have is this situation that's technically calm and chaotic at the same time, still very much on edge and only one headline away from the next move. Bonds, well, they took a hit on Tuesday for 3 reasons. First, the economic data came in hot, suggesting the economy remains strong, and when the economy looks strong, yields go higher. It's just that simple. Second, it was oil and Iran that kept the whole inflation story alive. Crude remains elevated, right, in the 90s, and the bond market understands that even if you get a deal tomorrow, energy prices are just not going to collapse overnight. That inflation premium, it's going to stay embedded, at least, uh, at the moment, kind of in the long— and at the long end, right? But the third punch, that's the one that really mattered. Can you say Kevin Walsh, the moment he sat down in front of the Senate committee and made it clear that he wants a new inflation framework, that he's laser-focused on price stability, and that he would absolutely not be cutting rates because a president tells him to do so. So the market repriced things immediately. The 10-year rose 4 bps to 4.29, the 30-year up 2 bps to 4.91. But remember what I told you on Monday— watch what the 2-year does. And there it is, up 6 basis points to 3.79%. And that matters because the 2-year doesn't care about headlines or geopolitics. It cares about one thing: what the Fed is going to do next. And the bottom line, the bond market is signaling hold. Warsh's views support tighter overall policy with a balance sheet twist. And easy— and the easy money day, what Well, they appears behind us unless growth or labor weakens sharply. And oil, it's churning in a tight range as traders wait conflicting headlines out of the Middle East, hoping for a ceasefire against the reality that the supply disruptions haven't fully cleared. This morning, oil's up 47 cents at $90.12, and it seems to be stuck in this $85, $95 range. Trendline support is down at $82.75 and resistance is at $100. Gold also continues to trade in a tight range. Supports at $4,730, resistance at $4,880. This morning, gold's up $38 bucks at $4,757, right in the middle, caught between this push and pull. Think rising yields against the geopolitical stress. Higher rates are a headwind for sure, but the uncertainty out of the Middle East is also keeping a bid under the market. So for now, gold isn't breaking out, but it's not breaking down either. It's just consolidating, waiting for the the next catalyst. ECO data today is about mortgage apps, and with rising pending home sales, I suspect that we should see the applications rise. That would be viewed as a positive. European markets are all flat to lower this morning. ASML came out overnight with their earnings and they crushed it, and the stock is up 7%. At 7 AM, US futures are up. Dow futures up 250, S&P's up 40, the NASDAQ's up 190, and the Russell is up 25. Look, while the Iran conflict is ongoing, my sense is that investors are already starting to look through it and focus on what really matters. Because at the end of the day, the geopolitical drama creates short-term chaos and yes, opportunity, but it does not price stocks in the long term. The economy does, earnings do, and cash flow does. We've seen this movie before. The headlines hit, the market reacts, volatility spikes, and then it all settles down and refocuses on the fundamentals. So while everyone's watching the tape for the next headline, the smarter money is asking a different question: what does this mean for the economy? Because that's what's going to determine where stocks go next. The S&P closed yesterday at 7,064, down 45 points. We keep teasing that trendline resistance that I identified, 7,075, We identified it last week. Yesterday saw the S&P trade as low as 7,050 and as high as 7,137, so right around that trend line. This morning it appears as if we're going to test and push up and through that trend line again, and depending on what we learned today— think earnings— that's going to really dictate the next move. So, uh, so far this morning we've gotten 13 reports and only 2 of them have missed. That's an 85% beat rate. And after the bell, we're gonna get 12 more. And the ones that I'm gonna watch are IBM, Tesla, ServiceNow, Southwest Airlines, and CSX. Why? Because IBM's gonna give you a read on enterprise spending. If IBM is strong, it tells you businesses still have a lot of confidence. Tesla, huh, that's your consumer global demand story. Big ticket discretionary spending. If margins are under pressure there, demand is soft, that's gonna be a warning sign. Not just for autos, but for the higher-end consumer as well. Then you get ServiceNow, right? That's another lens into hiring, workflow, and productivity spend. If companies are investing in these efficiency tools, they could be preparing either for growth or for tighter conditions, or maybe both. Southwest Airlines, right? Are people still traveling? Are they trading down? Are they— are fares holding up? Airlines, uh, the airlines are going to tell you quickly if the consumer is feeling pressure. And then there's CSX. That's the heartbeat of the industrial economy. What's moving across the country? Raw materials, autos, uh, freight. If volumes are strong, that means the economy is moving. If they're weak, the economy might be slowing. Doesn't get any more complicated than that. Call me at 561-931-0190. Let's talk about how Slatestone Wealth can help you navigate all of this and reach your goals. Okay. So what do we have for dinner tonight? We're gonna have the pork chop Milanese. We're gonna have it capriccioso style. It is delicious. It's also one of my favorites. This is like just making, you know, a chicken cutlet or a veal cutlet Milanese, except you're gonna use a pork cutlet that you're gonna pound thin, right? It is delicious. So for this, you need the pork cutlets off the bone. You can do 'em on the bone if you want, but I do 'em off the bone. Seasoned breadcrumbs, eggs, flour, olive oil, fresh lemon juice, arugula, cherry tomatoes, red onion slice, and the mozzarella bocconcini balls, right? Set your oven to broil. Scramble 5 eggs in a bowl, set 'em aside. Add flour to another bowl, set that aside. Put the seasoned breadcrumbs in kind of a large aluminum baking pan, right? Now begin by dredging the cutlets in the flour, shaking off the excess, dip 'em in the egg wash on both sides, and then place 'em in the breadcrumbs on both sides pressing down to make sure that you coat the cutlet with the seasoned breadcrumbs. When that's done, you're going to add olive oil to a Pyrex baking dish. You're going to put it in the oven on the second rack. Don't put it right up against the heat, right? Um, let the oil get hot, but don't leave. You got to stand there. It's going to heat up in a minute or two. Don't walk away. When it's nice and hot, you're going to take the cutlet, you're going to put it down in the oil. You're going to hear it sizzle. You're going to flip it over. You're gonna fill the pan and then you're gonna put it under the heat and stand there and wait till they cook. It's only gonna take a couple of minutes. They're gonna get nice and brown and crispy. Pull it out, flip them over, do the same thing on the other side. While that's cooking, you wanna make this arugula salad with the cherry tomatoes, the red onion, season it with salt and pepper, some oregano, fresh lemon juice, and a splash of olive oil. When the cutlets are done, you wanna serve them on a warm plate, then top them with that arugula salad and then add the bocconcini balls right on top and serve it. That's it, simple. You get everything in one bite. You get the meat, you get the salad, you get the tomatoes, the bocconcini. Delicious. You can thank me tomorrow. Until tomorrow, take good care.