In this solo market commentary recorded at Grand Central Station on April 27, 2026, Kenny Polcari provides a comprehensive morning briefing for investors. He begins by noting that the S&P 500 and NASDAQ closed at new all‑time highs while the Dow, Dow Transports, and the Equal‑Weight S&P lagged, signaling a tech‑driven rally that may be fragile. He reviews recent earnings across sectors, highlighting margin pressure from rising raw‑material and fuel costs, especially for airlines. Polcari then turns to macro‑policy, discussing the upcoming March PCE inflation data, the April FOMC meeting, and the transition from Jay Powell to Kevin Warsh, projecting that rates will likely stay on hold and that any rate cuts will be delayed. He outlines the geopolitical backdrop— Iran’s stalled peace talks, oil hovering near $100, and gold’s tug‑of‑war— and how these factors influence bond yields and market sentiment. Technical analysis points to S&P support around 6,840 and a cautious VIX reading. He emphasizes the significance of the upcoming big‑tech earnings (Microsoft, Google, Amazon, Meta, Apple) as a test of AI‑driven growth and valuation. The segment ends with a brief promotion for Slatestone Wealth and a personal recipe for linguine with spinach pesto. Throughout, Polcari balances enthusiasm for market highs with caution about underlying divergences and macro risks.
Chapters
Well, good morning. Yes, it's me, Kenny Polcari, your host of the party. And look where I am today, in the heart of New York City at beautiful, spectacular Grand Central Station. And yes, it's early in the morning, only quarter to 8, so you see it's not really busy, but it will get busier the longer I talk. Anyway, today is Monday, April 27th, 2026, and here are the things you need to know to get your day started. Well, the S&P and NASDAQ closed at new all-time highs on Friday. The Dow Transports and the Equal Weight though are not confirming. It is a big tech week. Meta, Microsoft, Amazon, Google, and Apple all reporting on deck, and Iran remains in focus. The ball is still in their court. And Wednesday, well, it's JJ's curtain call. It is now the warsh era. And what do we have for dinner tonight? We're gonna have the linguine with spinach pesto. Mm, a perfect summer and spring dish. Okay, so good morning, because it's time to wake up because this week is chock full of excitement. So let's just start with it. Stocks ended the week on Friday mostly higher. The Dow lost 90 points, but the S&P gained 57. The NASDAQ surged by 400. You can thank Intel for that. The Russell added 12 points, the transports lost 200, the Equal Weight S&P lost 14, while the Mag 7 tacked on 700 points. And that's about what you need to know. Again, it's important to note that the S&P and the NASDAQ did close at all new time highs while the Dow, the Dow Transports, and the Equal Weight S&P did not. And all that is, is a little bit of a caution signal, right? Just kind of a warning flag to remain cautious because When you get this kind of divergence, it's telling you one thing, that the rally is being driven by a very narrow group of stocks. In this case, it's tech. And that doesn't mean that the market is about to roll over, you know, and die because it isn't. But it does just mean to be cautious and careful just on how you, you look at the markets going forward. So, look, it's great to celebrate the new highs, but understand what's happening underneath the sheets. Last week gave us a bunch of earnings that spanned a range of sectors across the economy. Right. We saw beats on the top and bottom lines and ones that are running at about 80%, which is a little bit ahead of where we usually are. But it is the guidance that has raised some eyebrows. Companies are cautious about rising costs of raw materials as well as the rising cost of energy. And that's beginning to put pressure on margins. Note the comments we had from Procter Gamble last week and by some of the airlines. In fact, you can, you can look at the warning from American Airlines because it was crystal clear. Fuel is an issue and that is causing margins to get squeezed. I mean, American Airlines expects an extra $4 billion in jet fuel costs this year, something that they had not budgeted for right now. Remember, the airlines can raise their prices, they can cut capacity, they can raise their baggage fees, and they can even, you know, add new seat fees depending on location, all of which they've done. But they can't necessarily do it fast enough to offset the spike that we've seen in jet fuel prices. So, yes, the pressure is building. And if it's not corrected fairly soon it's going to hit the consumer. So proceed with caution. And speaking of the consumer, Thursday brings us the March PCE price index. It is the Fed's favorite inflation gauge, and it is expected to show an increase in both the month-over-month and year-over-year on the top line, as well as the core line, which is ex-food and energy. The fear is that this is going to be even more than expected, but the surprise will be if it's weaker than expected. Now remember, the April FOMC meeting begins tomorrow, and the decision comes out on Wednesday. The day before we get the latest inflation data. But it's hard for me to honestly believe that they don't know— they meaning the Fed— that they don't know what the PCE is going to reveal. But okay, let's just run with that idea that they're all being kept in the dark. Okay, we'll go with that. In any event, I do not expect to hear anything other than rates to remain on hold, but I do expect Jay Jay to emphasize the rising costs of energy and raw materials. And that they're presenting a problem for the Fed, which only means that he's going to say that cuts will be pushed out further down the timeline. Right. So the June cut not happening, July cut not happening, maybe even a September cut not happening. And then just to make it more interesting, late Friday, we learned that the DOJ officially dropped its investigation into Jay Jay Powell. No charges. Case closed. That's it. At least from a criminal standpoint. Right now, why does this matter? Because it strips away the overhang, the political overhang that's been hanging over Jay Powell and the Fed for months now. And it removes any excuse for Senator Tommy Tillis to hold back his support for Kevin Walsh. He was the holdout. Remember that, that vote now takes place on Wednesday, right during the Fed meeting, and it's now expected to basically be a done deal. And that's the next chapter. So think about this. Is this Jay Jay's— this is Jay Jay's last meeting. Does the policy tone matter more or less? Remember last week, of course, uh, Kevin Walsh called for a regime change on how the Fed manages monetary policy. So some may think it matters less, but does it? What Jay Jay says is gonna set the tone. It's a starting point for the new Kenny Walsh era. It will frame the inflation narrative, it will frame the growth narrative, and it will frame how he hands it off before he goes in and turns off the lights. Now, look, oil, it's still the driver of markets, and this morning it's up $2 or 2% at $96.40, leaving it just below that $100 mark. Now, the move this morning appears to be a direct result of the no peace deal, no ceasefire deal that we thought maybe was gonna happen over the weekend. On Saturday morning, Trump stopped Stevie Whitkopf and Jared Kushner from even going to Islamabad, saying that he wasn't gonna waste their time any longer. He said that the ball is now solidly in Iran's court, and if, if they have something to say, they can always pick up the phone and call the White House. There's a direct line there, apparently. If not, then not. And as of 6 o'clock this morning, no one has called. Now, gold continues to get stuck in this tug of war, right? This morning it's down $6 at $4,705 as the geopolitical situation continues to play out. Right? But the bond yield says not so fast. Gold is now below intermediate-term trendline support of $4,745, and as gold traders await the next headline, for now it feels like we're in this $4,550, $4,860 trading range for gold. Bonds, they're also unsure of what's next. The 2-year is now yielding 3.78%, which is down from last week's high of 3.83%, but it's up from where it was at 3.68% before the Kevi Warsh hearing last week. The 10-year is now yielding 4.31%, while the 30-year is yielding 4.92%. For now, that's okay. The market can deal with that. But if they spike higher, that is going to cause stocks to kind of rethink and back off. At the moment, I don't see how they can go significantly lower, so I'm in the camp that they're going to hold steady right here until we get more clarity out of the Fed. And that's not going to happen now until we Kevvy Warsh takes over, right? The next meeting is after today, after this week. The next meeting is June 16th and 17th, and it will be known as the start of the Warsh era. Okay, earnings, because it's a big, big week. Get ready to hear from Microsoft, Google, Amazon, Meta, and Apple. And let's not pretend, investors, traders, and algos are all sitting on the edge of their seats. These companies represent 25% of the S&P. They have a total of $16 trillion in market cap. So here's the setup. This is not about whether they beat earnings. It's about validation, right? It's validation of the AI spending, validation of growth, validation of margins and valuation support. Because let's be honest, the spending is massive. Microsoft is pouring billions into Azure and its AI infrastructure. Apple is doubling down on CapEx spending. Meta is about to spend $100 billion plus while Amazon continues to invest heavily in Amazon Web Services and AI. But we know this. So the question is, is it going to start paying off and when? Let's look. Microsoft is your bellwether, right? It's a zero growth AI integration. If this accelerates, then the whole AI trade really stays intact. Google, watch the search ads, right? AI is both opportunity and risk here. Monetization matters for Google. Amazon, Amazon Web Services is the tell. It always has been. Growth plus their margins really equals everything you want to know about Amazon. Meta Platforms, they get strong ads but massive CapEx spending. At some point, the Street wants a return on investment, not just spending. Apple, that's a different story. This is your consumer check, right? iPhone demand, China, services growth, all that stuff. But don't ignore the rest of the lineup because this, this is going to be a read on Main Street. You got Visa, which is about payments. It's a real-time read on the consumer. Coca-Cola, consumer staples, pricing power and global demand, right? Then you got a Caterpillar Tractor, which is industrials, it's infrastructure, it's construction. Verizon is communications, defensive. Uh, NUI, right, which is basic materials, industrial demand. Uh, you get JetBlue, huh, there you go, the airlines. You're going to look at fuel cost pressure. UPS, which is transportation, shipping volumes, and economic activity. Then you got Hilton Hotels, which is travel and hotels, business and travel trends. And that is only a taste of what is to come. There are plenty of other earnings due out this week. European markets this morning are all up. Spain's in the lead, up 6/10, while the UK is up 2/10. Everyone else really falls in between. The Bank of England and the European Central Bank are all due to announce policy decisions on Thursday. They are expected to leave rates alone, but leaving the door open to potential rate hikes later this year, separate from a rate cut. US futures this morning are mixed. The Dow is down 80, the S&P is down 9, the Nasdaq is up 15, while the Russell is flat. Word is that Iran has submitted a peace plan, or at least that's the talk, but it falls short of really being serious. They want to reopen the strait, but they want to postpone any nuclear talks for now. US investors are not buying it, and Trump is not interested in wasting any more time. So essentially nothing has changed. The VIX is, um, it's up 30 cents at 19.02, still very much in the cautious zone. But this could go either way. There's a lot to digest this week, and so therefore keep your eyes on what the VIX does because that'll give you a sense of how the market is interpreting. You go data today, the Dallas Fed Manufacturing Survey, not a market mover at all. The S&P closed at 7165, up 57 points, closing at a new all-time high. On Friday, I said that anything tech was going to be busy thanks to Intel, but the other sectors, not so much, and that investors are going to be patient. Traders and algos are going to continue to take advantage of the anxiety. And that's exactly what we saw on Friday. And I suspect we're going to get more of that today and tomorrow and this week until we get those big earnings and really the FOMC. So say what you want, but separate from the geopolitical drama, the focus is going to be on tech, period, the end. Now, trendline support for the S&P is officially down at 6,840, which is about 4.5% lower from where we are today. And it's a level that we could test if the earnings disappoint or guidance is more cautious or investors do not see a return on all of this tech, uh, tech spending, right? You can call me at 561-931-0190. And let's talk about how Slatestone Wealth can help you navigate all of this to reach your end goals. Okay. So now what do we have in dinner tonight? This is a great spring and summer dish, right? Because you got the fresh spinach, the fresh basil, all that good stuff. So it's linguine within a spinach pesto. Now it's so good. It's so easy to make. It only takes you as long as it takes to boil the pasta. Now for this, you need the linguine, you need fresh spinach, you need fresh basil, walnuts, pecorino cheese, uh, you need garlic, olive oil, and salt and pepper. You want to bring salted water to a rolling boil and then add the linguine, right? It's going to take you 8 to 9 minutes to cook it just right. Now in a food processor, you're going to add the fresh spinach, you're going to add 3 or 4 leaves of fresh basil, you're going to take a couple of— some walnuts, not a lot, maybe like a half a handful You're going to add the Pecorino Romano cheese, a garlic clove, olive oil, and a pinch of salt. You're going to blend it until it becomes like a pesto sauce, then put it into a bowl. Now take that bowl and put it right on top of the boiling water that's on the— that you got the pasta in, and just let it warm up a bit. You just don't want it to be cold, you want it to be warm. Don't bring it up, don't leave it there too long, just enough for it to warm up. Then put that directly into— take the bowl off, put it on the counter, take the pasta when it's ready, put it directly into the bowl. And mix it so that you coat the whole thing. When you serve this, serve it in a warm bowl topped with some crushed walnuts, a dusting of Pecorino Romano cheese, a drizzle of olive oil, and of course a pinch of black pepper. You'll enjoy this. It's simple to make. You can thank me later. Until tomorrow, take good care.
