Surprise! US economic data are finally beating expectations again

Citi’s US economic surprise index – a gauge of whether data released recently has exceeded or fallen short of analysts’ estimates – is back in positive territory for the first time since May.

This isn’t just a case of the economic data being able to tiptoe over a very low bar as economists get gloomier and gloomier. The pickup in economic surprises has also coincided with a turn in the data. The Citi Economic Data Change, which tracks US activity relative to its one-year average, has been on the mend since late August, improving from -160 to -70.

Solid data – albeit, with lingering concerns about the state of the job market – are a big reason why US stocks have had their best opening three quarters to a year since 1997.

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Luke Kawa

JPMorgan drops after cutting full-year net interest income outlook

The bank had just upped its guidance for net interest income in late February.

Jamie Dimon Visits "Mornings With Maria"

$286🛢️

Luke Kawa24m

HSBC Group's CEO, Georges Elhedery, just broke down why end-buyers of oil are facing prices way above what traders see on their screens.

During a fireside chat with Bloomberg TV’s David Ingles at HSBC’s Global Investment Summit, Elhedery explained why his “biggest worry about the global economy is the disruption that’s coming from the Strait of Hormuz closure, or quasi closure.”

While the ceasefire between the US and Iran was intended to improve the flow of oil through this key chokepoint, the subsequent announcement of a US blockade of the waterway threatens to do precisely the opposite.

And that’s potentially prolonging, or exacerbating, the pain for crude importers, as Elhedery unpacked:

“What worries me is not the headlines, I mean oil headline is above $100, $110. Realistically, if you are now trying to get oil from the Middle East, you may be paying $140, $150.
Realistically, if you try to get oil from the Red Sea, you are paying more than $30, $40 for shipping. Insurance costs, which used to be 25 basis points, is more like 5%, and war insurance has been scrapped, you’re paying 5% without even the war insurance component.
So the barrel of oil door to door or the barrel of refined oil door to door is way above the headline price of oil. The highest I’ve seen, and I’m hoping we don’t see more of that, but the highest I’ve seen is $286 dollars for a barrel of oil that reached Sri Lanka. This is not a country and an economy that can easily afford these kind of prices sustainably.”

In separate interview with Bloomberg News, Elhedery warned that the continuation of these shipping disruptions would be felt not just in the price of energy, but also its availability.

Separately, the International Energy Agency updated its oil market outlook, with the Paris-based organization now forecasting a contraction in both supply and demand for oil, predicting an "80,000 bpd drop in demand growth this year, from a 640,000 bpd rise in its March report" according to Reuters.

Hyunsoo Rim1h

American Airlines jumps on potential merger talks with United

American Airlines was trading up more than 5% in premarket on Tuesday after Bloomberg and Reuters reported that United Airlines CEO Scott Kirby had floated the idea of a possible merger with American Airlines.

According to Reuters, Kirby raised the idea during a February White House meeting with President Trump, though it remains unclear whether United has made any formal approach to American or whether any deal process is underway.

United CEO Has Pitched Possible Combination With Rival American

Luke Kawa2h

Credo Technology soars after announcing deal to acquire photonics company

Credo Technology Group is soaring in premarket trading after announcing an agreement to acquire DustPhotonics, a developer of silicon photonic integrated circuits for optical transceivers (that is, chips that help use light to move information around data centers).

The price is $750 million in cash plus 920,000 shares of Credo, and has the potential to escalate from there based on the achievement of certain financial milestones.

The acquisition marks a concerted effort by Credo to play both ends of connectivity: advanced photonics in addition to active electrical cables (its bread and butter).

Per the press release, “The acquisition will position Credo with a vertically integrated connectivity stack... for scale out and scale up networks — addressing both electrical and optical interconnects across the full AI infrastructure.”

Following this transaction, the company expects optical revenues of more than $500 million in fiscal 2027, well above the pre-acquisition consensus estimate of $161 million.

Management projects this deal will be accretive to adjusted earnings per share in fiscal 2027.

Shares of Credo boomed after Broadcom reported earnings last month, as the custom chip specialist said that its clients were sticking with direct attach copper cables through 2028. But going forward, connectivity demand appears to be a story of both copper-centric and light-centric solutions to transmit information within and between racks.

Claire Yubin Oh2h

Amazon reportedly nears deal for Globalstar in bid to take on SpaceX’s Starlink

Globalstar is up 17% in premarket trading on Tuesday after Bloomberg reported that Amazon is nearing a deal to acquire the satellite company, as it moves to keep up with Elon Musk’s Starlink.

A transaction could be announced as soon as today, though final terms haven’t yet been reached and the timing of the announcement could change, according to people familiar with the matter.

Globalstar shares have almost tripled in the past year, including a jump at the start of this month after the Financial Times reported early negotiations between the two companies.

The deal would potentially accelerate Amazon’s efforts to build out its own low-earth-orbit satellite network, Bloomberg Intelligence analyst Jon Davies observed, with Amazon reportedly planning to have 700 satellites in space by the middle of 2026.

But there’s a small caveat — Apple’s 20% stake in Globalstar, which it took after a $1.5 billion investment in 2024, might give Amazon’s tech peer a say in Globalstar’s future, per people familiar with the matter. Globalstar’s buildout may already be linked with Apple’s product road map, and the iPhone maker “will not want to alter its plans,” said Davies.

Amazon Nears Deal for Globalstar in Push to Rival Musk’s Starlink

Globalstar shares have almost tripled in the past year, including a jump at the start of this month after the Financial Times reported early negotiations between the two companies.

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