When it comes to Middle East news, oil hears it and trades higher. The bond market hears it and pushes yields higher. But stock investors? They’re hearing something completely different. And then there’s earnings — because this is where the rubber meets the road, says Kenny Polcari, chief market strategist at SlateStone Wealth.
Stocks are 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 might — then higher energy prices stick, inflation stays sticky, and the idea that rates are coming down anytime soon gets challenged…which they already are. So yes, the market wants to believe the best-case scenario…but the reality on the ground is a lot messier.
GEV, BA, MAS, PM (YTD % Change)
Data by YCharts
As for earnings, companies are delivering. So far, we have an 80% beat rate on the top and bottom lines. Look across the board and you see an economy that’s not breaking — but it’s evolving and getting more selective. We just got...
- GE Vernova Inc. (GEV) absolutely crushing it, as demand for power tied to AI data centers explodes — a true “picks and shovels” winner. That stock advanced by 13.6%
- Boeing Co. (BA) stabilizing – not booming, but getting better. Investors celebrated, taking that stock up 5.5%
- Masco Corp. (MAS) showing that the consumer is still spending. Investors ate it up, pushing that stock up by 10.8%
- Philip Morris International Inc. (PM) surging 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 its 4% dividend yield)
Put it all together and the message is clear: the economy is holding up, but growth is getting more expensive, expectations are high, and this market is rewarding strength — while punishing anything less.
