Volatity Returns as Stock Break Records | Kenny Polcari

Well, good morning. Yes, it's me, Kenny Polcari, your host of the party, and today is Thursday, April 23rd, 2026, and here are the things you need to know to get your day started. Well, stocks hit new highs yesterday while the VIX is signaling caution. Earnings, well, they continue to beat. Investors are both rewarding and punishing. Geopolitics remains front and center, but be careful not to get drawn in. Oil is up, gold is down, yields are up, and the VIX remains cautious. And what we have a dinner tonight? We're gonna have the sweet sausage and pea risotto. Okay, so good morning. It's time to wake up and grab the coffee because volatility is back on the menu and the market is sending mixed signals that you just cannot ignore. On the surface, it all looks great. Yesterday we closed at record highs, investors leaning in, maybe getting a little too euphoric. The Dow rallied 340 points, the S&P 500 gained 1%, the NASDAQ Composite surged 1.7%, both the S&P and the NASDAQ tagging fresh all-time highs for the second time this week. The S&P Equal Weight Index went nowhere, all while the Mag 7 added 564 points or 1.7%. Now, layer in the bonds. The 2-year is yielding 3.81%, the 10-year is at 4.32%, and the 30-year is kissing 4.92%, and all moving higher telling you inflation concerns remain alive and well. And the market is trying to figure out what future policy is going to look like under a Kevin Walsh Fed. A peek at the VIX suggests that we're still in the cautious zone. Oil, WTI, is up 2% this morning at $94.76, while Brent is trading north of $103 a barrel this morning. Gold is down $44 at $4,696. Now breaching that trendline support at $4,735 as gold traders also consider where rates are going amid all the chaos. And then there's earnings because this is where the rubber meets the road. The net results so far— companies are delivering. So far we've got an 80+% beat rate on the top and bottom lines, but they're not necessarily being rewarded the way you'd expect. That tells you everything about sentiment right now. So look across the board, you see an economy that's not breaking, but it's evolving and becoming a little bit more selective. Yesterday morning we got GE Vernova, absolutely crushed it as demand for power tied to AI data centers explodes. A true picks and shovels winner. That stock advanced by 13.6%. Boeing stabilizing but not booming, but it is getting better, and investors celebrated, taking that stock up. 5.5%. Masco, they showed that the consumer is still spending and spending on their homes, and investors once again ate it up, pushing that stock up by 10.8%. And Philip Morris, they surged by 7%. A reminder that in this market, investors are still willing to pay for defensive growth, pricing power, and cash flow in addition to their 4% dividend. Put it all together and the message is clear. The economy is holding up, but growth is getting more expensive. Expectations are high, and the market is rewarding strength and punishing anything yet less. Now, after the bell, Tesla— or really Elon Musk— reminded everybody that the AI arms race is real, but it ain't cheap. CapEx is expected to explode, causing traders to punch the stock in the face. ServiceNow, they beat And they get— it gets crushed down 13% in the after-hours trading because the subscription numbers apparently didn't dazzle investors. And then it was IBM's turn. They did everything right. They beat on the top and the bottom lines, and they still got sold because they didn't wow the street, right? Something I think is ridiculous. But this morning, Tesla's down 3.5%. ServiceNow is down 13.5%. IBM is down 7.5%. Because apparently investors are saying good maybe just isn't good enough. Now here's a side note. You know me, I love IBM, and the move in IBM this morning takes it right back down to the April lows at about 233-ish, a level I think, I think is attractive to the long-term investor. But look, that's me. You do you. Now today we're gonna get another read on the broader economy. Pulte Homes is your housing tell where you have to ask, are higher rates finally biting demand, or is demand still hanging in there even with 6.25% mortgages? I say yes. American Express gives you the high-end consumer travel, dining, discretionary spending, and if they're spending, then the consumer, at least the high-end consumer, is still very much alive. I say yes. Honeywell is a global industrial bellwether— aerospace, automation, infrastructure, right? It's business investment and global demand. What are they gonna tell us, right? Then we've got Dow, uh, Dow, right, and FCX, right? That's both chemicals and copper, and they don't lie. They tell you exactly what's happening in the manufacturing, construction, and global growth business. Add in Lockheed Martin, and that speaks directly to aerospace and defense spending. American Airlines ties it all together with fuel costs, travel demand, and pricing power in a world that has seen jet fuel surge by 80% in just weeks. And now you ask why the airlines are raising prices, cutting routes, and warning about margins. So, so far this morning, Pulte Homes and Lockheed Martin reported they missed. Honeywell, Express, American Airlines, and Dow, they beat. And we're still waiting on Freeport-MacBride. Now be careful because the tone, the broader tone this morning in the market is negative. So there's no need to rush. Let the news hit the tape and settle in before you go rushing in to make any decisions. And did you notice I've gone this far and I haven't talked about Iran yet? But you really can't ignore it because what the market cheered yesterday, the so-called ceasefire extension, is already being called dead by whoever's leading Iran, right? Saying that reopening the Strait of Hormuz is impossible as long as the U.S. blockade remains. And that's exactly why oil moved higher because the people closest to the situation are telling you that this is far from resolved. Shipping is still constrained, risks are still elevated. And even if you get a headline today or tomorrow that says we fixed it, you know, can't or you can't just flip the switch and reopen the strait. It's gonna take time, if not weeks or months, to really normalize shipping and bring insurance costs down and restore confidence that the system will work. But here's the disconnect. Oil hears it and trades higher. The bond market hears it and pushes yields higher. And yet stock investors, they're hearing apparently something completely different. They're trading on the idea that this all gets wrapped up neatly and quickly. And that's the risk. Because if this drags on, and right now it looks like it's gonna drag on a little bit longer than we thought, then higher energy prices are going to stick. Inflation is going to remain sticky. And the idea that rates are coming down anytime soon is going to get challenged, which it already is. So yes, the market wants to believe a best-case scenario, but the reality on the ground, maybe a little bit messier. And at some point, that's going to matter. Gabish. And all that means is don't get caught up in the FOMO trade. Right? Fear of missing out. Do not make emotional decisions. Talk to your advisor and stick to the plan. Economic data today includes S&P Global Manufacturing and Services PMIs, both expected to remain in the expansion zone. That's a positive. European markets are all lower this morning. Spain down 1.2, Italy's down 3/10, everyone else is somewhere in between. US futures are down this morning. Dow futures down 330, S&P's down 30, NASDAQ down 115, the Russell is down 30. Right, giving back most of what we took yesterday. The pressure this morning once again focused on the geopolitical situation and the anxiety that that's creating. The lack of any real progress on the Iran-U.S. conflict is going to ultimately cause investors to have a reality check. Yes, earnings are good, expectations are solid, but let's be honest, $95+ oil plus rising inflation plus rising yields will ultimately cause stock investors to become a bit more cautious, which just means stick to the plan and don't become emotional. We've seen this before. The headlines hit, the market reacts, volatility spikes, and then it all settles down and tries to refocus on the fundamentals. So while everyone's watching the tape for the next headline, the smart money is really asking that different question: what does it all mean? What does it mean for the economy, the US economy, the global economy? Because that's what's going to determine where stocks go next. Look, the S&P closed at 7,137, up 74 points. Again, we blasted right up and through what should have been resistance at 7,075, but that was yesterday. But today's a different story, and we're going to likely test that level again, uh, as support. The question is, will it hold? Uh, you can call me at 561-931-0190, and let's talk about how Slatestone Wealth can help you navigate all of this and help you reach your end goals. Whether it's for you, your kids, your grandchildren, education, whatever. Let us help you. Now, what do we have in this? I have the sweet sausage risotto, and this dish could be a first, it could be a main course. It really depends on kind of how hungry you are and what you feel like eating. For this, you need olive oil, butter, onion, sweet Italian sausage removed from the casing, minced garlic, thyme, Arborio rice, white wine, chicken broth, frozen peas, and Parmigiano cheese. In a saucepan, you're gonna heat up 6 cups of chicken broth, leave it on the side. Don't bring it to a boil, just leave it warm. In a heavy pan now, heat up the olive oil and a quarter stick of butter over medium heat. Add in the chopped onions and sauté until the onions are soft and translucent. Now add in the sweet sausage meat that you've taken out of the casing and brown it. When that's ready, you're gonna add in, when it's all brown, you're gonna add in the minced garlic, no more than a tablespoon, and some thyme. Don't overdo it. About 3/4 of a teaspoon. You can always add less and then taste it and add more. If you do it the other way, you screw it up. Sauté for another couple of minutes just to blend all the flavors. Now add in a cup and a quarter of our Borrio rice and about 1 cup of the dry white wine. Mix it well, stir it till the wine is all absorbed. Season it with a bit of salt, you don't really, pepper, you don't really need salt because it's gonna be salty enough. Now add in 1 label at a time of the hot chicken stock into the rice and stir it. Stand at the stove. This is key because you need to stir and stir and stir so the rice doesn't stick. As the stock is absorbed, add another ladle and stir, continuing until the rice is tender and creamy. Maybe it takes you about 20 minutes, but taste as you go along to determine. Now, you may not need all the chicken stock, but just in case, you know, you did it wrong, you always— you can always save it by adding a little bit more stock. Now, at that point, you're going to add in a cup of the frozen peas and a handful of the grated Parmigiano cheese. Maybe 2 handfuls. Stir it well for about 5 minutes just so that the peas have time to defrost and warm up. Taste it, season, adjust if you need to. Now, serve this in warm bowls, right? The whole thing should take you about 30 minutes. When you serve it, serve it in warm bowls and garnish it with a little bit of chopped parsley on top. Always, always, always have extra cheese on the table for your guests because you know me, you can never have enough cheese. In any event, I'm on my way to the studio. I'll be on with Mornings with Maria at 8:20. Until tomorrow, take good care.