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“In the earnings call, several of the CEOs struck a notably cautious tone as geopolitical uncertainty lingers. Jamie Dimon warned of wars, energy price volatility, trade uncertainty, large global fiscal deficits and elevated asset prices. Goldman Sachs CEO David Solomon also pointed out heightened uncertainty in parts of private credit and the conflict in the Middle East. And Citigroup CEO Jane Fraser warned that one great first quarter does not a full year make.”

“Unemployment is really important here. As long as people are employed and wages are going up, they're spending. We hear a lot about the two-speed economy and the K-shaped economy. I think a better way to frame it is an E-shaped economy, where the high end is growing more, spending more than the low end. But there's no delta, there's no inflection in terms of the trends right now. There's not a worsening at the low end. It's kind of stable.”

“We think of it as trying to build advanced science that can say, when are we getting to the point that AI systems could improve themselves or speed up the pace of AI development? When will AI research feed on itself? The core capability for that might be software engineering and machine learning research ability.”

“There is a fundamental difference between financial markets and the real economy. They are not the same thing. Markets can be at all time highs while the economy is struggling. Now, where we are right now is not a struggling economy. It is a labor market that is a bit more weak, a bit weaker than it was last year. It's a consumer that is a bit more strained by inflationary pressures.”

“Traders have abandoned their bets on a stronger dollar, and the greenback is on course for its worst month since August. Dollar index is down 2.3% from its late March peak. The euro has recovered almost all the losses it made in the conflict's first week. The dollar's loss ground against every major currency except the yen so far in April.”

“So year-over-year inflation through the CPI index, which is a broad measurement of inflation, is up 3.3% from a year ago. And the Federal Reserve uses 2% as a target for where it wants inflation to be. Even before the war with Iran started, inflation was above that target level. And what we have now is an energy shock that is sending gasoline and diesel prices on one of their steepest climbs in decades, if not ever.”

“HF Sinclair Corporation (DINO), The International Monetary Fund and Global Economy, Sandisk Corporation (SNDK), Western Digital Corporation (WDC), The Curve Steepener and the War.”

“Historically high volatility has not been good for investment banking, but it has been good for sales and trading. But right now, we're hitting on all cylinders where trading results are really strong and benefiting from volatility, but it's not undermining deal-making. I think a lot of corporates have now come to the conclusion that volatility may be a feature of the system as opposed to a bug and have to continue investing and raising capital and doing deals.”

“The industries where they said we'd see the most wage gains from reduced labor supply are actually seeing slower growth in the broader economy. Employment in those 41 immigrant dependent industries fell by 90,400 in February from the previous February, while overall employment grew 298,000. The fundamental economic concept at work here is a lump of labor fallacy.”

“There is a fundamental difference between financial markets and the real economy. They are not the same thing. Markets can be at all time highs while the economy is struggling. Now, where we are right now is not a struggling economy. It is a labor market that is a bit more weak, a bit weaker than it was last year. It's a consumer that is a bit more strained by inflationary pressures.”

“And what that ends up meaning is that you keep on having these doublings of capabilities every, let's say, four months, it seems, on recent trends, where the next model is not merely going to have necessarily an hour longer time horizon, but perhaps be having some multiple of the time horizon of the previous model that's come out.”

“The Iran war is a major wildcard for the global economic outlook.”

“But the business has changed some, so it's not just intermediation, which you're talking about, but there's a financing piece of it. Things like prime brokerage and where investment banks are providing loans to hedge funds, that has grown a lot. If you look at the segment disclosures, for example, and you look at the markets businesses and the size of the balance sheets of these businesses, they are growing quite a bit. And that tends to be a little bit more durable than the intermediation side.”

“Israel says that it will have full control of the Lebanese town of Bin Shabeel, quote, within days. The town has become the center of intense fighting. It's part of land that Israel says it's seizing from Lebanon to create what it calls a buffer zone so Hezbollah can't fire rockets into Israel.”

“OpenAI and Anthropic are burning through cash at a staggering rate.”

“And while we can make up some of that gap, because countries and companies have stockpiles, we can sort of like massage it a little bit here and there for the moment. The longer this situation goes on, the longer the tankers can't make it out of the Strait of Hormuz, the longer that 10% will continue compounding. And the longer that the supply disruption will end up rippling through the global economy.”

“Alternative Asset Managers are very rate-sensitive. Higher for longer rates, they compress private equity deal activity, they slow realizations, they reduce fundraising momentum. There's definitely a lot of downside risk because of how private investments are valued and oftentimes you don't know how bad things are in private markets until they get really bad.”

“I think clearly the central reason is that we are bottlenecked on technical talent, on incredibly capable people to come work on these questions. I was on a METR work retreat recently where we were brainstorming 20, 30 of these, what seemed like world important problems, problems that we think no one else is going to get to if we do not get to them.”

“According to a study by the Associated Press, Major League Baseball's average salary has climbed 3.4% to a record of more than $5,300,000. The AP says the New York Mets topped spending at the season start for the fourth straight year with Mets' outfielder, Juan Soto, the highest paid player for the second consecutive season.”

“Maryland attorney general Anthony Brown says the states reached a settlement with Grace Ocean Private and Synergy Marine Group, the owner and manager of the Dali. The insurance company paid out $350,000,000 to the state of Maryland after the incident. There are still more than 50 parties, including the city of Baltimore, suing Grace Ocean and Synergy over the crash.”

“Natural gas, which is a huge part of what the Middle East exports in terms of energy, that is key for global power generation. It's key for air conditioning. It's also a key input for manufacturers around the world. If we're thinking about companies that build everything from chips to companies that create steel and need high heat, to companies that produce fertilizer for farming, all of that requires an immense amount of natural gas.”

“Riverside County sheriff Chad Bianco, a Republican, obtained them to investigate an alleged vote count discrepancy in a statewide election last year. Most disturbingly, there doesn't seem to be any indication of criminal wrongdoing. The California Supreme Court has halted Bianco's investigation while it reviews the case.”

“METR is a research nonprofit based in the Bay Area... dedicated to advancing the science of measuring whether and when AI systems might pose catastrophic risks to humanity as a whole, focused specifically on threats that come from AI autonomy or AI systems themselves. We think it sets the stakes for conversations about AI misalignment.”

“We are a net exporter of energy. We are the largest oil producer the world has ever seen. So why the heck am I paying higher gasoline prices when all of this is happening 7,000 miles away? The reason why is oil is the most global market. So we are a huge exporter of crude oil, of gasoline, of jet fuel, mainly from the US Gulf Coast. So that tethers us to the global market in a really big way.”

“Now, on the trading side that you mentioned, yes, the war did help. I do think, though, that trading was already tracking—the markets businesses were already tracking to pretty good results even before the war. On average, I think you had 17% year-on-year growth overall. As you mentioned, equities was a particular standout. I think one of the big questions, though, as we go forward is how durable these results are, especially in markets.”

“You cannot have a Iran. Pope Leo would not be happy with the end result. You have hundreds of millions of people dead, and it's not gonna happen. So I can't, I think he's very weak on crime and other things. So I'm not I mean, he he went public. I'm just responding to Pope Leo.”

“The acquisition of TBPN reveals exactly where media is headed.”

“US Southern Command posted grainy videos on social media showing explosions that destroyed two small boats alleged to be smuggling drugs. Many legal experts say these strikes amount to execution without trial or simply murder, and some allies in South America and Europe have stopped sharing some intelligence with the US military as a result.”

“We examine the economic impact of this policy, who really benefits, and what it might mean for consumer spending patterns.”

“Zeldin celebrated the EPA's decision to stop regulating carbon dioxide as a pollutant. He says that policy was government overreach and focused too much on the worst case scenarios. Zeldin spoke at a conference of the Heartland Institute, a free market group that denies that humans are contributing to climate change.”

“The tasks that come up in the wild are more likely to be messy in some sense. They involve working with other people. They involve working in much larger code bases or more open-ended problems, maybe with something even adversarial going on. We do tend to see that the AIs are less capable of working on these more messy problems.”

“One extraordinary fact from my perspective... is something like the R&D spend on compute of these companies has risen exponentially, of course, and in fact, it's risen exponentially at essentially the same rate as time horizon progress. You know, I think there's nothing necessary about that. You know, it doesn't mean by itself that if compute progress slows, then capabilities progress will also slow.”

“From Iran's perspective, they feel emboldened... It discovered the Strait Of Hormuz and what havoc it can wreak, not only on The Gulf, but on the entire globe. Brent crude oil, the international standard, is above $96 a barrel in Asia ahead of talks in Pakistan Saturday on a potential permanent ceasefire.”

“Today's Stocks & Topics: Dutch Bros Inc. (BROS), Market Wrap, Nestlé S.A. (NSRGF), Nestlé S.A. (NSRGY), No Tax on Tips: What the IRS Ruling Actually Means for Workers and the Economy...”

“Goldman Sachs published a note late last Thursday, revealing that systematic hedge funds, the algorithm driven funds known as CTAs or Commodity Trading Advisors, bought 86 billion of stock exposure over the last five trading sessions. That ranks as one of the largest buying surges in the history of these funds. They further estimated another 90 billion could follow over the next five sessions if the signal stays aligned.”

“Canadian prime minister Mark Carney has secured a parliamentary majority. His Liberal party won the majority Monday night following two special election victories. Carney has said that a win would help him deal more effectively with the trade war started by president Trump.”

“The IPO race for AI is more of a marathon than a sprint.”

“The industries where they said we'd see the most wage gains from reduced labor supply are actually seeing slower growth in the broader economy. Employment in those 41 immigrant dependent industries fell by 90,400 in February from the previous February, while overall employment grew 298,000. The fundamental economic concept at work here is a lump of labor fallacy.”

“CTA flows are a short-term momentum signal. They are not, not, not, not, a fundamental endorsement. The algorithms are buying because prices are rising. They don't know and they don't care whether the war ends, whether earnings hold, or whether the consumer cracks. The smart money is in. But the smart money isn't always right. It's just faster.”

“Goldman Sachs published a note late last Thursday, revealing that systematic hedge funds, the algorithm driven funds known as CTAs or Commodity Trading Advisors, bought 86 billion of stock exposure over the last five trading sessions. That ranks as one of the largest buying surges in the history of these funds. They further estimated another 90 billion could follow over the next five sessions if the signal stays aligned.”

“CTA flows are a short-term momentum signal. They are not, not, not, not, a fundamental endorsement. The algorithms are buying because prices are rising. They don't know and they don't care whether the war ends, whether earnings hold, or whether the consumer cracks. The smart money is in. But the smart money isn't always right. It's just faster.”

“In a way, it is a toll road on America's aging water pipe replacement cycle. But daily average sales growth is down. There is a clear demand cooling trend. Private construction is soft. Tariff driven input costs, uncertainty, another overhang here. It is, in many ways, a high quality infrastructure distributor at a multi-year low valuation.”

“The IRS has published its official list of occupations that qualify for the new 'no tax on tips' provision, giving millions of service workers potential tax relief.”

“Traders have abandoned their bets on a stronger dollar, and the greenback is on course for its worst month since August. Dollar index is down 2.3% from its late March peak. The euro has recovered almost all the losses it made in the conflict's first week. The dollar's loss ground against every major currency except the yen so far in April.”

“In this case, we're talking about for a bus 4.6, something like tasks that take humans 12 hours to do, we predict that it will succeed at those tasks around 50 percent of the time. It turns out that when you plot using this particular difficulty measure, how performant AIs are relative to how long it takes humans to complete these tasks, we see an exponential increase in capabilities for AIs.”

“In a statement, James says an investigation found people arriving at New York Presbyterian's hospitals in New York City received inadequate care that, quote, put vulnerable patients at risk. Her report alleges people with mental illness weren't properly screened. And in some cases, patients who appear to pose serious risks to themselves or others were left unsupervised or received no care.”

“In a way, it is a toll road on America's aging water pipe replacement cycle. But daily average sales growth is down. There is a clear demand cooling trend. Private construction is soft. Tariff driven input costs, uncertainty, another overhang here. It is, in many ways, a high quality infrastructure distributor at a multi-year low valuation.”

“The International Monetary Fund and Global Economy, Sandisk Corporation (SNDK), Western Digital Corporation (WDC), The Curve Steepener and the War.”

“Alternative Asset Managers are very rate-sensitive. Higher for longer rates, they compress private equity deal activity, they slow realizations, they reduce fundraising momentum. There's definitely a lot of downside risk because of how private investments are valued and oftentimes you don't know how bad things are in private markets until they get really bad.”

“There was a survey from the University of Michigan. It was the lowest ever in 74 years of the survey taking place. And so some of that might be an overreaction in vibes because the economy was pretty strong coming into this. But the direction of travel, how fast that plummeted in just one month as people were seeing those price increases in the gas station, that just goes to show that people hate this.”

“The latest jobs report suggests an economy that is still running hot.”