"9 Takeaways from the JP Morgan Chase Energy Study..."

The headline continues "...You Won't Want to Miss" but how the heck would I know what you want to miss?

In certain circles that sort of presumptuousness could lead to a tiny button being pressed, the meeting coming to a sudden end, two large gentlemen appearing as if by magic, and your being escorted off the premises, all before you had a chance to demonstrate your brilliance.

Or worse, the button isn't pressed but a judgement has been made. And not communicated to you. 

From the Energy Bad Boys substack, March 28:

We read it so you don't have to

We appeared on the Energy Central podcast this week, where we discussed the causes of rising prices, utility green plating, and that there is no easy way out of the affordability pickle we find ourselves in.

Please take a second to check it out by clicking this YouTube link. We would like to crush the competition with respect to total views, and every click counts. Thank you for your attention to this matter.

On March 3rd, JPMorgan Chase released its 16th Annual Eye on the Market Energy Paper. This year’s report, written by Michael Cembalest, is titled “Fighting Words,” and it is a 98-page analysis with hundreds of graphs and charts on the state of the energy industry.

It spans most aspects of the energy industry, but as with all things energy, much of this year’s report centers on the impact of data centers on cost and reliability. Also of note are discussions on the cost of solar and storage, conventional fuels, small modular reactors (SMRs), electricity prices, and battery storage economics.

Here are the nine takeaways we found most interesting from the study, hereafter referred to as the JPMC report.

1. The Data Center Price Debate: A PJM Deep Dive

Data center impacts on customer costs continue to dominate the headlines for electricity affordability. The JPCM report notes:

The PJM region (data center alley: VA, PA, MD, OH) has 67 GW of existing and planned data center capacity, the largest cluster in the U.S. PJM has attracted attention due to spikes in its capacity payments, which are “insurance premiums” paid to generators to commit future supply or commit to demand response reductions during peak demand. Without the cap, the recent PJM auction would have cleared at $530 per MW per day.

 

While capacity payments take place in wholesale markets, they’re partially flowing through to retail power prices in MD and NJ. Factors driving the spike in PJM capacity payments include retirement of thermal assets, data centers and declines in capacity accreditation for solar and storage.

 

The reductions in capacity accreditation for solar and storage were overdue, and the recent increase in accreditation for onshore wind seems risky to us, as MISO, which, in fairness, has much more wind capacity than PJM, has the capacity value in the mid-teens.

On a final PJM note, Cembalest seems to think data centers could end the electricity “deregulation” experiment. “Last point: some utilities within PJM are questioning whether re-regulation would be the better option (Exelon, First Energy, PPL, and PSEG); I agree with them.”

2. Data Centers Are Likely Causing Nighttime Load Growth

The JPMC report provides evidence that data centers are materially increasing electricity demand at night, which also happens to be the period when the sun doesn’t shine.

 

Nighttime loads have increased in Virginia and ERCOT since 2023. Nighttime loads are less influenced by industrial production or population. The increase in nighttime loads in data-center-heavy areas such as the Northern Virginia Dominion Zone and ERCOT suggests these facilities are driving evening demand, as JPMC notes, electric vehicles are not drawing enough power to be significant drivers of demand yet.

Cembalest writes “Nighttime load can be viewed as positive as it represents consistent load that allows utilities to monetize capital deployed assets and does not put additional strain during peak hours; but it’s another sign of rising data center demand.”....

....MUCH MORE 

If interested see also 2025's "9 Takeaways from the JP Morgan Chase Energy Study You Won't Want to Miss". 

 Or maybe you will want to miss it, your call.

"AI's biggest critic has lost the plot: Ed Zitron vs. reality"

I never really understood why so many seemingly smart people gave Mr. Zitron any of their time and/or mental bandwidth. He was wrong and very loudly so.

We have had a total of one post that even mentions him and it has nothing to do with AI, though this one, truth be told, links to his blog:

June 1, 2024
"The Man Who Killed Google Search"

From Ed Zitron's substack, Where's Your Ed At?, Apr 23, 2024:

This is the story of how Google Search died, and the people responsible for killing it.

The story begins on February 5th 2019, when Ben Gomes, Google’s head of search, had a problem. Jerry Dischler, then the VP and General Manager of Ads at Google, and Shiv Venkataraman, then the VP of Engineering, Search and Ads on Google properties, had called a “code yellow” for search revenue due to, and I quote, “steady weakness in the daily numbers” and a likeliness that it would end the quarter significantly behind....

For what it's worth, I think AI is a bubble.* 

And the headline story from The Argument, April 28:

Ed Zitron thinks that AI is a bubble.

The tech columnist — whose newsletter reportedly has 80,000 subscribers and who has bylines in The Atlantic and The Guardian — first made his case in March 2024, quoting analysts who were saying things like we were “at the peak of the hype cycle around Large Language Models and other generative AI.”

He doubled down that summer: AI was a bubble and it wasn’t clear anyone but Nvidia would make money. Zitron is today one of the most prominent people, and certainly the most prolific person, making this case — but while I’m glad someone’s making it, reading through several hundred thousand words of his recent coverage on the topic left me wishing it was being made better.

When you read “AI is a bubble,” think of the dot-com boom of the late 1990s: Yes, the internet was going to be a big deal, but valuations soared for specific companies that had small or speculative revenue, often on the assumption that they would capture the value the internet would one day deliver. They didn’t, their stocks crashed, and the invested money was mostly lost. The internet was as big as imagined — bigger, even — but Pets.com didn’t survive to see it.

In 2024, Ed Zitron was hardly alone in wondering if AI would take this route; it seemed plausible to me too. Models like GPT-4 were tantalizing mostly because of what they suggested might be possible in the future, rather than for their direct economic utility. If building bigger models didn’t pan out, it was easy to imagine that we’d see some bankruptcies.

But time passes and situations evolve. Ed Zitron, though, clearly does not.

Over the last two years, he has called the top repeatedly: The AI bubble was definitely about to burst here, and here, and here, and here, and here, and here. His conclusion hasn’t changed, but his arguments have.

The 2024 and 2025 articles make, basically, the business case against AI: that companies aren’t really using it, it isn’t adding value, and AI investors are betting that will change before they run out of cash. In 2026, the focus is much more on alleging widespread, Enron- or FTX-tier outright fraud.

This is basically an admission that he can’t make the case in terms of the economics anymore. And in deciding how seriously to take his case in 2026, I think it’s valuable to read it in parallel with his case from 2024 and 2025.

“Have we reached Peak AI?” he asked on March 18, 2024. “Things are beginning to unwind in the most annoying bubble in history,” he told us on April 21, 2026. Let’s compare the two articles.

In 2024, Zitron’s coverage of the Bubble Question was rich with admissions from businesses that they weren’t really using AI yet and did not expect AI to have significant impacts on their revenues. He quoted from earning calls in which companies said that AI-related business impacts were zero. In order to be profitable in the future, he pointed out, AI would have to get a lot better — was there any reason to think it would?

Zitron repeatedly made a specific prediction that it would not and could not. “Generative AI,” he wrote in the summer of 2024, “is peaking, if it hasn’t already peaked. It cannot do much more than it is currently doing, other than doing more of it faster with some new inputs. It isn’t getting much more efficient.”....

....MUCH MORE 

*And on AI as bubble:

July 2025 - "Microsoft and Meta’s earnings are making every part of the AI supply chain surge" (Ride the Bubble) MSFT; META; NVDA

As reiterated in January 7 2025's:
"Everything (retail) Nvidia Announced at CES 2025"
Reminder: We believe AI is a bubble and have made the decision to ride the bubble.

June 18, 2024: Nvidia's Financial Dominance (NVDA)

For the last year we have been referring to the AI phenomena as a bubble, perhaps not so much in financial terms but rather in terms of the psychology, the speculative frenzy. It's true in Nvidia's case, the stock could be cut in half and still be discounting the future with a 2-3% discount factor i.e. 33 to 50 times free cash flow.

However! Despite this we have been pitching a "Ride the Bubble" approach to the stock for over a year (we have an almost full decade with this one but it was in the last thirteen months that we thought it bubblelicious). Here's a July 1, 2023 post:

....So, we are faced with the decision whether-or-not to play a dangerous little game, riding the bubble knowing full well it is a bubble, or retiring to the sidelines.

For now one of our favorite economists with one of our favorite stories.

Here's the version hosted at MIT:

Riding the South Sea Bubble

By PETER TEMIN AND HANS-JOACHIM VOTH

This paper presents a case study of a well-informed investor in the South Sea bubble. We argue that Hoare’s Bank, a fledgling West End London bank, knew that a bubble was in progress and nonetheless invested in the stock: it was profitable to “ride the bubble.” Using a unique dataset on daily trades, we show that this sophisticated investor was not constrained by such institutional factors as restrictions on short sales or agency problems...

The two most important parts of the paper "II. Hoare’s Trading Performance" and "III. Causes of Success" are definitely worth a couple minutes....

***** 

....We'll have more on the big stories, autonomous vehicles, agentic AI and humanoid robots later today.

Mr. Huang believes they are each trillion dollar+ addressable markets.

*We reiterated the ride the bubble pitch a few more times, despite some trepidation. 

note: stock prices should be divided by 10 to adjust for the most recent stock split.

January 19, 2024 at $594.91 "AI: Lessons From The South Sea Bubble". 

February 6, 2024:

Nvidia Collapses (gives back half yesterday's gains) plus Isaac Newton and Daniel Defoe do a drive by (NVDA)

The stock is down $11.87, so a little less than half yesterday's up-move. $681.45 last after trading as low as $663.00 (down $30.31 and almost the entire Monday $31.72 up-move.) Unfortunately there is a gap on the chart at $660 so it didn't completely fill. Nervous-making....

By-the-bye, that $660 ($66, new style) is the "cut in half" number.

March 6, 2024:

WSJ: An in-depth look at Nvidia's DGX H100 setup: 32 DGX boxes, each weighing 300lb, that house eight individual $25K H100 GPUs, cooling, and other chips....

Earlier this morning the stock got to $889.68 and we are still pitching the "ride the bubble" approach—up $220 since the last mention, Feb. 6—but that could change anywhere between today and the end of the NVDA GTC conference (Mar. 21)....

If interested in some of our history with the big dog there are links embedded in January 2024's "Nvidia expands its reach in China’s electric vehicle sector" (NVD 

Finally, as Adam Smith put it in his book on the 'sixties bull market, The Money Game:

“Now you know and I know that one day the orchestra will stop playing and the
wind will rattle through the broken window panes, and the anticipation of this
freezes us. All of these kids but one will be broke, and that one will be the multi-
millionaire, the Arthur Rock of the new generation. There is always one, and
maybe we will find him.”

—As seen in February 2024's "JPMorgan's Jamie Dimon On The Business Case For AI: "This Is Not Hype" (JPM)" 

Not being in government, I don't have the authoritarian type of authority so I tend toward Burkeian humble and lovable: 

"All which a man without authority can give--
His unbiased opinion, his honest advice, and his best reasons."
—Edmund Burke (1791)*

—Power Politics For Outsiders, March 2023 (and elsewhere)

*Potential downside: Burke was described by Edward Gibbon (he of The...Decline and Fall...) as:
"The most eloquent and rational madman that I ever knew". 

"How Iran’s Regime Stays in Control"

Looking at the IRGC as an occupying army (as distinct from and possibly opposed to Iran's actual army the Islamic Republic of Iran Armed Forces—Artesh) helps clarify and guide potential tactics. 

From The National Interest, April 29:

Permanent internet blackouts, child mobilization, and foreign militias have emerged as new features of the Islamic Republic’s crisis governance.

In the conversation about Iran’s future, it’s the dog that isn’t barking. More than two months into the US conflict with the Islamic Republic, Operation Epic Fury didn’t deliver the regime change in Tehran that many initially anticipated. While there are growing signs that the country has transitioned into something that, despite theocratic window-dressing, closely resembles a military dictatorship, it’s also apparent that Washington hasn’t achieved a fundamental change in its behavior—at least not yet. 

All eyes are now understandably on the sporadic diplomatic contacts between Washington and Tehran, as well as the punishing economic effects of the US blockade, which is already reshaping Iran’s oil sector. But the internal political balance in Iran may prove even more decisive, as it will help determine whether the regime’s remaining leadership can maintain its grip on power.

Doing so is clearly preoccupying the new powers-that-be in Tehran. A recent meeting of the country’s Supreme National Security Council reportedly highlighted deepening anxiety among regime security agencies about the potential for renewed domestic unrest driven by economic hardship and political disaffection. In response, the Iranian regime has moved aggressively to reinforce its control through a number of parallel measures....

....MUCH MORE 

During the street protests inn January the Associated Press reported NetBlocks estimate that the internet shutdown was costing Iran's economy, and thus its people, over $37 millionper day. 

Related: the intro to and outro from April 7's "Iran’s supreme leader ‘unconscious and receiving treatment in Qom’".

Prysmian S.p.A., World's Largest Electrical Cable Manufacturer Reports Earnings, Beats Expectations, Trades To All-Time High (PRY:Milan)

Another member of our hyper-concentrated electrical mini-portfolio.

From TradingView through April 30:

 

127.95 euros up 3.60 (+2.90%) at the close. The ATH was at 131.00 euros intraday. 

Up 47.75% Year-to-date and 167.57% over the last twelve months.

From Investing.com, April 30, 2026:

Earnings call transcript: Prysmian Q1 2026 beats expectations, stock rises 

Prysmian reported robust Q1 2026 results, with revenue reaching EUR 5.2 billion, surpassing the forecast of USD 5.11 billion. The company demonstrated strong organic growth and a significant increase in EBITDA, driving a 3.96% rise in its stock price. This performance reflects Prysmian’s strategic initiatives and operational efficiency, positioning it well for future growth.

Key Takeaways

• Revenue exceeded forecasts, reaching EUR 5.2 billion with 5% organic growth.
• EBITDA grew by EUR 80 million year-over-year, with a notable margin expansion.
• Stock price increased by 3.96%, reflecting strong market confidence.
• Strategic contracts with hyperscalers indicate future growth potential.
• Forex impact was a headwind but is expected to decrease in upcoming quarters.

Company Performance

Prysmian’s performance in Q1 2026 was notably strong, with revenue and EBITDA significantly exceeding expectations. The company achieved a 5% organic growth in revenue, driven by robust performance across multiple business segments. This growth underscores Prysmian’s effective operational strategy and its ability to capitalize on market opportunities.

Financial Highlights

• Revenue: EUR 5.2 billion, up 5% organically.
• EBITDA: Increased by EUR 80 million year-over-year.
• EBITDA Margin: Expanded to 14.2% from 13.1% in Q1 2025.
• Net Profit: Nearly EUR 250 million, described as "outstanding."

Market Reaction

Following the earnings announcement, Prysmian’s stock rose by 3.96%, trading near its 52-week high of $148.90. This positive market reaction reflects investor confidence in the company’s strategic direction and its ability to deliver strong financial results. The stock has delivered a remarkable 162% return over the past year, though InvestingPro analysis suggests the shares are currently trading above their Fair Value. According to InvestingPro, Prysmian boasts a perfect Piotroski Score of 9, indicating exceptional financial strength. The company’s "GREAT" financial health rating and attractive PEG ratio of 0.41 suggest strong earnings growth potential relative to its P/E ratio of 29.81. Investors seeking deeper insights can access 14 additional ProTips and comprehensive metrics on the platform.

Outlook & Guidance

Prysmian’s forward guidance remains positive, with EPS forecast to reach $5.41 for FY2026, up from $5.06 in the last twelve months. Revenue forecasts indicate 6% growth ahead. The company is pursuing long-term agreements with hyperscalers, which are expected to drive future revenue. Additionally, Prysmian plans a 40% increase in global optical fiber and cable capacity to support its growth strategy. For investors seeking comprehensive analysis, the company is among the 1,400+ US equities covered by InvestingPro’s detailed Pro Research Reports, which transform complex financial data into actionable intelligence.

Executive Commentary

CEO Valerio Battista stated, "Our strong Q1 2026 results demonstrate the effectiveness of our strategic initiatives and our commitment to delivering value to our shareholders." He emphasized the importance of the company’s agreements with hyperscalers as a key growth driver.

Risks and Challenges

• Forex impacts, although expected to decrease, remain a concern.
• Margin pressure in the Power Grid segment due to cost inflation.
• Potential supply chain disruptions could affect future performance.
• Competitive market dynamics in the fiber optics industry.
• Economic uncertainties that may impact global demand.

Q&A

During the earnings call, analysts inquired about the impact of forex fluctuations on future earnings and the company’s strategy to mitigate these effects. Prysmian’s management highlighted their focus on operational efficiency and strategic contracts to offset potential challenges.

Full transcript - Prysmian L (0NUX) Q1 2026:

Operator: Good day, and thank you for standing by. Welcome to Prysmian Q1 2026 Integrated Results webcast and conference call. I’d now like to hand the conference over to Massimo Battaini, Chief Executive Officer of Prysmian. Please go ahead, sir.

Massimo Battaini, Chief Executive Officer, Prysmian: Thank you. Good morning to everyone, and welcome to the earnings call for Q1 2026. We’re very excited to share our Q1 result that is well ahead of our expectation. When I say well ahead, I mean almost EUR 50 million upside over what we budgeted for Q1 2026. What is mostly settling is that the growth in EBITDA between Q1 2025, 2026 has been mainly achieved organically. If you take this EUR 80 million increase and you harmonize and neutralize the Forex, this will lead to a EUR 120 million growth in EBITDA, out of which China representing only EUR 40 million of this EUR 120 million. Also outstanding is the EBITDA margin in the quarter, 14.2%. 1.1 percentage point higher than what we recorded for last year.

With this set of result, can confirm that we are well on track to achieve the 2028 Capital Markets Day target of EUR 3 billion and plus, and also very confident to be able to hit the upper part of our guidance for 2026. Namely, well above the EUR 2.7 billion, EUR 2.7 billion of the midpoint. Before moving to the usual business by business review, I like to share with you some exciting news about the further expansion that we can have in the data center space through striking long-term agreements with the hyperscalers. These agreement are gonna be finalized in the coming weeks. Instrumental and fundamental to achieving this agreement is our footprint in terms of product and asset that we have in U.S....

....MUCH MORE 

The Q&A gives some insight into how the various markets addressed by the mini-portfolio, PWR; CCJ; FSLR; GEV come together.

 

For what it's worth this is, like the four above symbols, another "Best of breed" sort of company.

 

As noted in October 2025's "Electric Cable Giant, Prysmian S.p.A. Closes At All-Time High (PRY.MI)":

They are also big in optical fiber cabling but since they bought America's General Cable Prysmian is far-and-away the class of the field....

That was at 88.00 euros.

If interested see also:

July 2024 - Transmission/Grid: Prysmian Has Received A €450 million Contract From The European Investment Bank (PRY:Milan)
Time to string some lines.This is the name for transmission cable.

January 2024
"There’s a Shortage of Electrical Wires, Transformers. That’s Good for These Stocks."
April 2024
Grid: How U.S. Electrical Transmission Lines Will Be Rebuilt—Reconductoring
April 2024
Electrical Transmission: Speaking Of The Farsighted Italians...

Our interest had been in General Cable which PRY snatched up in 2017, as noted in the reconductoring post.

June 2025

"Reconductoring: Building Tomorrow’s Grid Today" ("same towers, better wires")

Capital Markets: "May Day: Market Looks for US Leadership"

From Marc to Market:

In holiday-thinned markets, the dollar is mostly softer as North American leadership is awaited.  In light of yesterday’s surge in the yen, and contrary to our expectation, it does appear that Japanese officials materially intervened yesterday. The intervention may have been for around $34.5 bln (~JPY5.4 trillion), which if accurate, would be larger than the average size of the intervention operations in 2024. Better confirmation will likely be available at the end of next week. 

Five G10 central banks met this week. The derivatives market adjusted expectations for this year’s course the 22 bp for the Bank of Canada. Two hikes are now fully discounted. There was a 19 bp increase in the implied year-end target rate for the European Central Bank, where three hikes are now fully discounted. The Bank of England’s hawkish hold saw the expected year-end base rate rise 15 bp to 68.5 bp. The Federal Reserve remains the only major central bank expected to cut rates, but the futures market has a little more than a basis point is discounted, down from nearly a dozen basis points at the end of last week....

....MUCH MORE  

"Russia’s Economy Is on the Brink of Collapse"

Not yet "on the brink" but moving closer to the brink with each passing day. 

From 19FortyFive, April 27:

Putin is the Head of a Russian State on the Brink of Economic Collapse: Leonid Putin, meet Vladimir Brezhnev. Serious Russian economists are increasingly of the opinion that Russia is in deep trouble and that Putin’s policies are bringing it to the point of collapse.

In that sense, Putin’s Russia is following in the footsteps of Brezhnev’s USSR.

The Russian Economy Is in Trouble

A case in point is the view of one of Russia’s leading mathematicians, Academician Robert Nigmatulin, who told the Moscow Economic Forum in April 2026 that Russia’s economy is experiencing an existential crisis.

Reform won’t do the trick anymore. Restructuring—shades of Mikhail Gorbachev’s perestroika!—is imperative. But economic restructuring presupposes political restructuring, which is impossible as long as Putin remains in power and believes, correctly, that his survival hinges on continuing the war against Ukraine.

An ethnic Bashkir, the 85-year-old Nigmatulin is a distinguished member of the Russian Academy of Sciences. He served as the president of Bashkortostan’s Academy of Sciences and is a laureate of the USSR State Prize. In a word, he’s an authority, a full-fledged member of the Russian establishment, and no rabble-rouser.

His views must be taken seriously.

The Challenges Are Big for Moscow 

Nigmatulin identified the following critical problems:

-Russians have the lowest disposable income in all of Europe, and China’s poorest regions are better off than Russia’s.

-Russia suffers from Europe’s highest mortality rate.

-In 2015-2025, GDP grew 1.5 percent per annum, while consumer prices rose 77 percent, and yearly inflation stood at 7 percent.

-Since 2012, none of Vladimir Putin’s economic decrees has been implemented.

-Investments are low and inefficient.

This is “no way to run the economy,” thundered Nigmatulin. Indeed, “the existing situation is a threat to the stability of the President’s rule under conditions of war ‘fatigue’ and horrific corruption…. The crisis will last long, and we are obligated to warn the President and society.”....

....MUCH MORE 

Similar sentiments from Madame Nabiullina:

Russian central bank chief calls for honesty in economic data after Western allegations 

And Radio Free Europe/Radio Liberty on what this means for her, personally:

Entangled In Russia's Faltering Economy: The Fate Of Its Respected Central Banker

In Case You Missed It: The Cost Of California's High-Speed Rail Project Is Now Approaching A QUARTER-TRILLION Dollars

Two from the New York Post:

April 28 - California’s high-speed rail now ‘worst project in history’ — as insiders reveal unbelievable new cost 

April 30 - California punts on high-speed rail plan as furor grows over new $231B price tag 

Also at the Post:

Chick-fil-A employee accused of stealing $80,000 with mac & cheese scheme

That at least seems less cheesy and more realistic than the California story.  

By January 2022 the railroad was already being headlined:

California’s High-Speed Rail Went From a $33 Billion Project to the Single Largest Public Infrastructure Disaster in U.S. History

We've been following this one for a while, some links below.

From Tech Startups, January 21:

California’s $100 Billion High-Speed Rail Boondoggle Project: How California’s High-Speed Rail Went From a $33 Billion Project to Become the Single Largest Public Infrastructure Disaster in U.S. History

A few months later we saw:

October 2022
France Tried To Warn California That The California High-Speed Rail Plan Was A $100 Billion Farce  

....The state was warned repeatedly that its plans were too complex. SNCF, the French national railroad, was among bullet train operators from Europe and Japan that came to California in the early 2000s with hopes of getting a contract to help develop the system.

The company’s recommendations for a direct route out of Los Angeles and a focus on moving people between Los Angeles and San Francisco were cast aside, said Dan McNamara, a career project manager for SNCF.‌

The company‌ ‌pulled out in 2011. “There were so many things that went wrong,” Mr. McNamara said. “SNCF was very angry. They told the state they were leaving for North Africa, which was less politically dysfunctional. They went to Morocco and helped them build a rail system.”

Morocco’s bullet train started service in 2018.....

There you have it, North Africa is less politically corrupt than California. Just amazing.

Here are a couple posts from 2011:

California High-speed Rail Costs Triple to $100 Billion (and it will be arriving late)   

California High Speed Rail: The Man Who Predicted The Cost and the Delay

"Quanta (PWR) Q1 2026 Earnings Call Transcript" April 30, 2026

The stock closed at a new all-time high, up $99.17 (+15.78%) at $727.77. The new intra-day high was $728.85. It is usually a good sign when a stock closes at or near the daily or all-time, high.

From Motley Fool Transcribing, Apr. 30:

CALL PARTICIPANTS

    President & Chief Executive Officer — Earl Austin
    Chief Financial Officer — Jayshree Desai
    Vice President, Investor Relations — Kip Rupp  

TAKEAWAYS

• Revenue -- $7.9 billion reported for the quarter, reflecting double-digit growth according to management.
• Net income attributable to common stock -- $221 million, or $1.45 per diluted share.
• Adjusted diluted EPS -- $2.68 for the quarter, with management highlighting margin improvements in the Underground Utility and Infrastructure Solutions (UI) segment.
• Adjusted EBITDA -- $686 million, representing double-digit growth per management's commentary.
• Backlog -- Record $48.5 billion at quarter-end, with increases observed broadly across all segments, not driven by any single project.
• Full-year 2026 guidance -- Revenue expected between $34.7 billion and $35.2 billion; adjusted EBITDA guidance raised to a range of $3.49 billion to $3.65 billion; adjusted EPS projected at $13.55-$14.25.
• Power transformer manufacturing investment -- Management reiterated an ongoing $500 million to $700 million multi-year capital program to double transformer manufacturing capacity.
• Off-site manufacturing expansion -- Near doubling of off-site fabrication, manufacturing, and logistics facilities underway, targeting roughly 6.7 million square feet in aggregate.
• Technology and load center revenue outlook -- Management noted technology and load center revenue growth expectation moved from 70% to 110%; acquisitions and organic growth both contributing.
• Adjusted EPS growth target -- Company targets 15%-20% adjusted EPS growth annually, with an aim to more than double earnings power by 2030.
• Leverage policy -- Quanta Services intends to maintain an investment-grade balance sheet with a leverage profile of 1.5x-2x, prioritizing returns over repurchases.
• Acquisition strategy -- No acquisitions in the quarter, but management stated, "I expect us to do some M&A over the next 9 months," with future acquisitions to be additive to current guidance.
• Order trends -- Management emphasized a shift toward negotiated, programmatic contracts and noted daily inbound opportunities in data centers, transmission, and generation.

SUMMARY

Quanta Services (PWR +15.50%) raised its full-year revenue, adjusted EBITDA, and adjusted EPS guidance, citing broad-based demand and a record backlog spanning all major business segments. The company detailed a significant capital commitment to double transformer manufacturing capacity and expand off-site fabrication, positioning for emerging opportunities in grid modernization and large-load customers. Management outlined that margin improvement in the Underground Utility and Infrastructure Solutions segment was a principal earnings driver, and that technology and load center markets are seeing accelerated growth fueled by both strategic acquisitions and organic expansion.

• President & CEO Austin said, "We are in the rooms where customers are planning their entire multiyear capital spend," highlighting growing direct negotiation of major projects.
• Chief Financial Officer Desai stated, "while we were pleased with the performance in the first quarter, it's just early," indicating that confidence in higher-end free cash flow will be reassessed as the year progresses.
• Management highlighted that a major portion of backlog growth was driven by Master Service Agreements (MSAs) rather than single large project awards.
• Strategic objectives through 2030 remain unchanged, with Austin clarifying, "We have outlined an opportunity to more than double the earnings power of this company by 2030."
• Quanta does not factor future M&A into current guidance, but leadership expects incremental acquisitions to supplement organic growth during the remainder of the year.
• The company maintains that future transformer supply chain capacity investments and fabrication expansion serve as major differentiators in supporting both utility and hyperscaler demand.

INDUSTRY GLOSSARY

• Master Service Agreement (MSA): A long-term contractual arrangement with a customer covering multiple projects or scopes of work, enabling streamlined execution and negotiation for ongoing services.
• CCGT (Combined Cycle Gas Turbine): Power plants utilizing gas turbines combined with steam turbines to generate electricity more efficiently, often referenced in discussions of new generation capacity.
• Balance of plant: All supporting components and auxiliary systems of a power plant, excluding the prime mover and generator, critical in data center and renewable project builds.
• Fungibility (labor): The capability of reallocating skilled labor resources fluidly across projects, segments, or geographies as market conditions and customer needs require.

Full Conference Call Transcript

Kip Rupp: Thank you, and welcome, everyone, to the Quanta Services First Quarter 2026 Earnings Conference Call. This morning, we issued a press release announcing our first quarter 2026 results, which can be found in the Investor Relations section of our website at quantaservices.com. This morning, we also posted our first quarter 2026 operational and financial commentary and our 2026 outlook expectation summary on Quanta's Investor Relations website. While management will make brief introductory remarks during this morning's call, the operational and financial commentary is intended to largely replace management's prepared remarks, allowing additional time for questions from the institutional investment community.

Please remember that information reported on this call speaks only as of today, April 30, 2026, and therefore, you're advised that any time-sensitive information may no longer be accurate as of any replay of this call. This call will include forward-looking statements intended to qualify under the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995, including statements reflecting expectations, intentions, assumptions or beliefs about future events or financial performance. You should not place undue reliance on these statements as they involve certain risks, uncertainties and assumptions that are difficult to predict or beyond Quanta's control, and actual results may differ materially from those expressed or implied.

We also present certain historical and forecasted non-GAAP financial measures. Reconciliations of these financial measures to their most directly comparable GAAP financial measures are included in our earnings release and operational and financial commentary. Please refer to these documents for additional information regarding our forward-looking statements and non-GAAP financial measures. Lastly, please sign up for e-mail alerts through the Investor Relations section of quantaservices.com to receive notifications of news releases and other information and follow Quanta IR and Quanta Services on the social media channels listed on our website. With that, I would like to now turn the call over to Mr. Duke Austin, Quanta's President and CEO. Duke?

Earl Austin: Thanks, Kip. Good morning, everyone, and welcome to the Quanta Services First Quarter 2026 Earnings Conference Call. I want to begin by thanking our employees for their continued absolute performance mindset, dedication to safety and commitment to delivering mission-critical infrastructure solutions for our customers. Your work and dedication is what makes everything possible. Quanta is off to a strong start of the year with our first quarter results reflecting robust double-digit growth in revenues, adjusted EBITDA and adjusted earnings per share, along with record backlog.

These results reflect the strength of our diversified solutions-based business model and our portfolio approach, enabling us to adapt to the evolving industry dynamics while consistently delivering execution certainty and profitable growth across varied market conditions. I want to spend a moment on what we shared at our Investor Day on March 31 because I think it is the right context for everything we are doing. Quanta has transformed, and our strategy for the next 5 years is firmly in place. What ran through everything we presented in our Investor Day was one word, certainty, execution certainty, labor certainty, supply chain certainty, schedule certainty.

That is what our customers need right now, and that is what this company is built to deliver. Utilities are being asked to double in size. Technology customers are demanding speed at scale they haven't dealt with before. Everything we have built over the past decade, our craft workforce, the integrated solutions model, the vertical supply chain investments, it all comes back to delivering that certainty at scale. And that is the conversation we are having with the customers every single day. We listen to our customers, and we are becoming more deeply embedded in the way they plan and execute their capital programs. We are in the rooms where customers are planning their entire multiyear capital spend.

We are negotiating much of the work directly. Our success is aligned with their success and with positive outcomes for the rate payer. That was not the case 5 years ago. We are there now. The trust we have built over decades, combined with the investments we have made in our craft workforce and integrated solutions model is how we created a durable compounding business that is well positioned to capitalize on large visible and durable market opportunities. To that end, on the fourth quarter call, we announced an investment of $500 million to $700 million over the next several years in our power transformer manufacturing facilities and vertical supply chain strategy, which will double our power transformer manufacturing capacity.

Additionally, we're nearly doubling our off-site manufacturing, fabrication and logistics facilities over the next several years for an aggregate of approximately 6.7 million square feet of facilities as part of our integrated fabrication and supply chain solutions. We are experiencing significant demand for these services, particularly for data centers, and these programs are just a couple of examples of Quanta's ability to provide total solutions across converging markets that are designed to deliver speed and certainty. The versatility of our craft workforce and our solution-based approach is what derisks all of us for our customers and for our investors.

That fungibility, the ability to move our people across a $2.4 trillion total addressable market converging around utility, generation and large load is what allows us to flex across markets, expand scope and keep delivering. We have outlined an opportunity to more than double the earnings power of this company by 2030. When we look at our 15% to 20% adjusted EPS growth target with the opportunity to stack above that. I want to be clear, this is not easy, and the strategy has to be in place to deliver those numbers. We believe it is. Our guidance is prudent. It has always been prudent.

And the results we reported this morning reflect exactly the kind of execution this plan is built on. I will now turn it over to Jayshree Desai, Quanta's CFO, to provide a few remarks about our results and 2026 guidance. And then we will take your questions. Jayshree?

Jayshree Desai: Thanks, Duke, and good morning, everyone. This morning, we reported first quarter results with revenues of $7.9 billion, net income attributable to common stock of $221 million or $1.45 per diluted share, adjusted diluted earnings per share of $2.68 and adjusted EBITDA of $686 million. Based on the continued momentum evidenced by our record $48.5 billion of backlog, the strong performance during the quarter and improved visibility into the remainder of the year, we are raising our full year financial expectations. We now expect revenues to range between $34.7 billion to $35.2 billion, adjusted EBITDA to range between $3.49 billion to $3.65 billion, and adjusted EPS to range between $13.55 and $14.25.

As Duke mentioned, we hosted an Investor Day on March 31 and outlined an opportunity to more than double the earnings power of this company by 2030. This quarter represents a great start to a 20-quarter stretch during which time we intend to deliver against that expectation along with continued improvement in our consolidated margins and returns. Over the course of our 5-year plan, we remain committed to maintaining an investment-grade balance sheet and an acquisition strategy that's governed by our target leverage profile of 1.5 to 2x, and the returns that we would otherwise generate by repurchasing our stock....

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"Goldman Sachs finds individual investors are piling into leveraged semiconductor ETFs"

Things that make you think "Hmmm..."

From MarketWatch, April 30:

Forget buy the dip. Now retail investors are ‘trading the mania’ in chip stocks, and it’s about to get messy.

The Thursday morning setup is looking a bit messy as oil bounces around and as investors sift through earnings from the U.S. tech giants.

Qualcomm is standing out among the newsmakers of Wednesday’s after-hours crush. Despite a weak outlook, shares are rocketing higher on news the chip manufacturer will enter the lucrative custom silicon market and already has a hyperscaler lined up as a customer.

Qualcomm’s reception fits a recent narrative of resurgent semiconductor stocks. The PHLX Semiconductor Index has surged 35% in April, marking its second-best month on record behind February 2000. That has some technical analysts warning that “parabolic moves” tend not to end well for investors.

More caution comes from our call of the day wherein Goldman Sachs’s trading desk discusses how retail investors have shifted from the old “buy the dip” approach to “trade the mania,” piling into riskier bets on chip stocks in particular.

Investors have embraced chip stocks on the view that as hyperscalers plan to spend billions on data centers, demand for AI chips will stay high.

Tearing a page out of the institutional-investor playbook, the retail crowd has been chasing momentum in that hot market sector, rather than the usual levered ETFs aimed at tracking and amplifying the moves of the S&P 500 or the Nasdaq Composite, a team led by Gail Hafif told clients in a note late Wednesday.

Individual-investor participation in the Direxion Daily Semiconductor Bear 3X ETF,, and Direxion Daily Semiconductor Bull 3X ETF, is now at the 97th and 99th percentiles, respectively, over five years, said Goldman. Those extreme bearish and bullish bets offer three times leverage either way on chip stocks....

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Now, as a general rule, the momo mamas aren't wrong to be enamored with momentum.

Of all the critters in the factor zoo (Fama-French 5 factor+momo) the momentum factor is the one most likely to put food on the table and cash in the bank. However! Trend>Friend>Bend>End means you are going to be trading which means you are going to have fees and slippage grinding against you.

Furthermore, using a triple-leveraged vehicle implies you had better be manipulating the market to get the timing of the turns correct. Otherwise just the variance will wipe you out, leaving aside whether you are right or wrong on the directional moves. 

PCE Inflation: "Core inflation rate hit 3.2% in March, as expected; GDP grew 2% in first quarter"

From CNBC, April 30:

Consumers faced escalating prices in March as the Iran war sent oil soaring and created a new level of challenges for the Federal Reserve.

The core personal consumption expenditures price index, which excludes food and energy, accelerated a seasonally adjusted 0.3% for the month, pushing the 12-month inflation rate to 3.2%, the Commerce Department reported Thursday. The readings matched the Dow Jones consensus estimates.

Including the volatile gas and groceries components saw higher readings, with the monthly gain at 0.7% and the annual rate hitting 3.5%, also in line with forecasts....

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And at the Bureau of Economic Analysis, April 30:

Personal Income and Outlays, March 2026  

Table 2.8.11. Real Personal Consumption Expenditures by Major Type of Product: Percent Change from Month One Year Ago 

Table 2.8.7. Percent Change From Preceding Period in Prices for Personal Consumption Expenditures by Major Type of Product, Monthly 

"Electrical current might be the key to a better cup of coffee"

Electricity, is there anything it can't do?

From ArsTechnica, April 28:

University of Oregon scientists repurposed battery-testing tool to better measure coffee’s flavor profile

University of Oregon chemist Christopher Hendon loves his coffee—so much so that studying all the factors that go into creating the perfect cuppa constitutes a significant area of research for him. His latest project: discovering a novel means of measuring the flavor profile of coffee simply by sending an electrical current through a sample beverage. The results appear in a new paper published in the journal Nature Communications.

We’ve been following Hendon’s work for several years now. For instance, in 2020, Hendon’s lab helped devise a mathematical model for brewing the perfect cup of espresso, over and over, while minimizing waste. The flavors in espresso derive from roughly 2,000 different compounds that are extracted from the coffee grounds during brewing. So it can be challenging for baristas to reproduce the same perfect cup over and over again.

That’s why Hendon and his colleagues built their model for a more easily measurable property known as the extraction yield (EY): the fraction of coffee that dissolves into the final beverage. That, in turn, depends on controlling water flow and pressure as the liquid percolates through the coffee grounds. The model is based on how lithium ions propagate through a battery’s electrodes, similar to how caffeine molecules dissolve from coffee grounds.

Three years later, Hendon’s team turned their attention to studying why the microscopic clumps form in the first place, particularly at very fine grind levels. The culprit is static electricity arising from the fracturing and friction between the beans during grinding. Hendon thought reducing that static would be a good way to eliminate those clumps. The technical term is triboelectricity, which arises from the accumulation of opposite electric charges on the surfaces of two different materials due to contact with each other.

A similar charge build-up also occurs during volcanic eruptions. So Hendon collaborated with volcanologists Josef Dufek and Joshua Méndez Harper, who were regulars at the same local coffee house and had noted striking similarities between the science of coffee and plumes of volcanic ash, magma, and water....

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 If interested see also:

Quanta Services

GE Vernova 

"Quanta Services soars 10% on earnings beat and raised outlook" (PWR)

In pre-market trade the stock is up $58.35 (+9.29%) $686.68. 

From Investing.com, April 30: 

NEW YORK - Quanta Services Inc. (NYSE:PWR) reported first-quarter results that significantly exceeded analyst expectations and raised its full-year financial outlook, sending shares up 10%.

The infrastructure services provider posted adjusted earnings per share of $2.68, beating the analyst consensus of $2.06 by $0.62. Revenue reached $7.87 billion, surpassing the $6.99 billion estimate and representing strong double-digit growth from the prior year. The company also reported GAAP diluted EPS of $1.45 and net income attributable to common stock of $220.6 million.

Quanta raised its fiscal 2026 guidance substantially across key metrics. The company now expects full-year EPS of $13.55 to $14.25, with a midpoint of $13.90 that exceeds the analyst consensus of $13.11. Revenue guidance was set at $34.7 billion to $35.2 billion, with the $34.95 billion midpoint above the $33.31 billion consensus estimate.

"Quanta delivered an exceptional first quarter, reflected by strong double-digit growth in revenue, adjusted EBITDA and adjusted earnings per share, along with record backlog of $48.5 billion," said Duke Austin, President and Chief Executive Officer....

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Here's the press release:

QUANTA SERVICES REPORTS FIRST QUARTER 2026 RESULTS 

But wait! There's even more!

https://investors.quantaservices.com/news-events/ir-calendar/detail/20260430-first-quarter-2026-earnings-conference-call 

Stock performance through yesterday's close:

YTD Return

PWR
49.00%
S&P 500

4.24%

 

1-Year Return
PWR
115.20%
S&P 500 

28.33%

3-Year Return
PWR
272.00%
S&P 500 
71.15%

Capital Markets: "The Yen Recovers on Verbal Intervention"

From Marc Chandler at Bannockburn Global Forex:

The North American market understood yesterday’s Fed statement and the three dissents in favor of a neutral bias as a hawkish hold and rallied the dollar in response. Follow-through selling today has been minimal and the greenback is sporting a softer profile. The strongest currency today is the Japanese yen, which had fallen to its lowest level since July 2024, before heightened Japanese verbal intervention. The threats of material intervention were successful, and the dollar reversed lower from the JPY160.70 area to fray JPY159.00 in the European morning. 

Meanwhile, reports suggesting that the US is considering new military strikes on Iran amid the stalled talks after President Trump reject Iran’s proposal. However, after the initial flurry that lifted oil futures to new highs, both the June WTI and July Brent contracts have reversed lower and ahead of the North American open, both are off around half-of-a-dollar. The outcome of the BOE and ECB meetings are awaited. Both are expected to attempt a hawkish hold.  Lastly, on the back of strong capex, the US reports its first look at Q1 GDP today. The median forecast in Bloomberg’s survey is for a 2.3% annualized pace, while the Atlanta Fed’s tracker is almost half of it (1.2%)....

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"Iranians Feel the Pain as Their Economy Descends Into a Death Spiral"

 From the Wall Street Journal, April 29:

Businesses are closing, unemployment is soaring and food is increasingly unaffordable

War has imposed a heavy cost on Iran’s economy: more than a million people out of work, soaring food prices and a prolonged internet shutdown that has slammed online businesses.

The question is how much more pain Iran’s leaders are willing to tolerate as they try to negotiate a favorable end to the war.

Talks between the U.S. and Iran have stalled. American officials are betting that Iran will soon crack because of the deepening economic crisis. Iran is betting the U.S. will crack first and end its blockade of Iranian ports to calm global markets and bring down American gasoline prices.

To contain the economic fallout, the Iranian government has raised wages, subsidized basic goods and handed out cash to the poor. But authorities are confronting a level of hardship not seen in decades, according to residents.

“It is an authoritarian regime, and it can claim that resisting economic pressure is a question of national pride,” said Alex Vatanka, a senior fellow and Iran expert at the Middle East Institute. At the same time, “as the money dries up because of the blockade, we may find that more and more folks have no choice but to mobilize politically,” he said.

At the center of the fight is the continued closure of the Strait of Hormuz, the conduit for roughly a fifth of the world’s oil and liquefied natural gas.

Iran closed the strait early on in the conflict, effectively using the waterway to hold the world economy hostage. The U.S. responded with a naval blockade of its own, dealing a devastating blow to Iran’s already-battered economy.

Daily struggles
Government revenue has dried up just as the needs of its population are rising.

The war has thrown around one million people out of work directly and another million indirectly, according to early estimates cited by Gholamhossein Mohammadi, an official at Iran’s Labor and Social-Affairs ministry. That is a significant portion of the roughly 25 million people who are normally employed in Iran.

The cost of living has soared, with the annual inflation rate reaching 67% in the month through mid-April from the same period a year earlier, according to Iran’s central bank. The subsidized price of red meat, which was mostly imported through sea routes, has gone up to the equivalent of around $3.60 a pound, beyond the reach of most in a country where the minimum wage is around $130 a month.

Iran’s national currency on Wednesday hit a record low of 1.8 million rial to the dollar.

“Living is not affordable anymore,” said Mahdi Ghodsi of the Vienna Institute for International Economic Studies. “Iran is at its weakest point.”

Businesses across the country—from manufacturers to retailers—are closing, residents said. The lack of steel and other raw materials is hampering production in various industries. Electronic goods, which are mostly imported, are in short supply and expensive.

War damage
Iran’s economic meltdown predates the war, crippled by years of U.S. and international sanctions. The collapse in the value of the local currency and fast-rising prices triggered mass antigovernment protests at the turn of the year. The regime crushed the protests with lethal force. The economic woes that underpinned the protests have worsened since the start of the war, raising the possibility that the unrest could flare up again.

The bombing campaign by Israel and the U.S. caused extensive physical damage to roads, ports and residential buildings. It also hit vital industries, including the country’s main steelmaking and petrochemical factories. Iranian state media estimates that postwar reconstruction could cost around $270 billion, a crippling sum for a country with an annual gross domestic product last year of $341 billion. 

Before the blockade, most of Iran’s oil exports and most of its imports—from food to pharmaceuticals to raw materials—transited through the Strait of Hormuz.

Now, Iran is struggling to ship oil and other commodities that generated most of its revenue, shipping records show. As recently as March, Iran exported 1.85 million barrels of crude oil a day, worth $191 million at international prices. There is no evidence any Iranian oil cargo has breached the U.S. blockade and reached Chinese customers or other buyers, said Homayoun Falakshahi, a senior oil analyst at the commodities-data company Kpler.

Iran is pushing for a quick reopening of the Strait of Hormuz, an indication of how vital it is to its economy. Tehran has presented regional mediators with an offer to stop its attacks in the strait in exchange for a full end to the war and a lifting of the U.S. blockade of Iranian ports, The Wall Street Journal has reported. Tehran wants to postpone discussions about Iran’s nuclear program.

“The government sees the end of the war as the beginning of a new problem: having to cope with a disillusioned, impoverished citizenry,” said Djavad Salehi-Isfahani, a professor of economics who studies Iran at Virginia Tech. “If crude exports resume, they have some cushion. Iran can project an upward path to recovery, and people can say: these are terrible times, but we will recover.”

Coping mechanisms
The Iranian government has taken steps to contain the economic fallout. It has increased the minimum wage and raised the salary of government employees and continued to subsidize the price of bread, fuel and other essential goods. It is giving cash handouts to the poor and issuing coupons for the purchase of rice, chicken, cooking oil and other goods. It drew from strategic reserves of household staples to soften the economic blow for regular people.

The government has appealed to Iranians to do their part by limiting their consumption of water, electricity and gas. Tehran residents were encouraged to drive less and use public transportation instead....

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That last paragraph sounds like California. 

On April 6 the Journal published "The Next Target for the U.S. and Israel Is Iran’s Economy"

TEL AVIV—The U.S. and Israel have a set of targets lined up in Iran designed to cripple the country’s economy and ensure the regime’s recovery from this war is long and painful.

And as noted introducing what was then an Iran International exclusive, April 27:

"Iran's top security council holds meeting over fears of renewed protests"
Reaching back into the mists of time, December 2025 - January 2026. Iran was already reeling from the water crisis and the collapse of the currency. And then Israel and the U.S. attacked....

The Iranian Internet down-detector has the system running at 4/10% of capacity.

note: the down-detector says the current outage is 14 days old. That is only because there was a brief surge of activity one day in mid-April. Sans that the Iranian internet has been down since February 28.

Oil: "Why UAE's OPEC exit is a blow to Saudi Arabia"

From Deutsche-Welle, April 29:

The United Arab Emirates is leaving OPEC to pump more oil on its own terms. The break strips Saudi Arabia of a key partner and adds to growing uncertainty over the cartel's future.

Why has the UAE decided to quit OPEC now? 
OPEC, the global cartel of oil-producing nations, operates a quota system that limits how much oil each member can produce.

For years, the United Arab Emirates (UAE) has clashed with Saudi Arabia, OPEC’s most powerful member, over these quotas. The UAE has invested heavily to expand its oil industry and grow its market share, but OPEC limits have repeatedly held it back.

Energy Minister Suhail Al Mazrouei told the New York Times on Tuesday: "The world needs more energy. The world needs more resources, and [the] UAE wanted to be unconstrained by any groups."

The UAE is now betting it can sell more oil once the Iran war and Strait of Hormuz crisis ends, both in the medium and the longer term. Analysts, meanwhile, see the move as a calculated step by a producer ready to act independently.

"Losing a member with 4.8 million barrels per day of capacity, and the ambition to produce more, takes a real tool out of the group's [OPEC] hands," said Jorge Leon, head of geopolitical analysis at research consultancy Rystad Energy.

"With demand nearing a peak, the calculation for producers with low-cost barrels is changing fast, and waiting your turn inside a quota system starts to look like leaving money on the table."

The UAE, which joined OPEC in 1967 through Abu Dhabi, will leave both OPEC and the wider OPEC+ alliance, which includes Russia, on May 1.

The UAE currently produces roughly 3.2 to 3.6 million barrels per day (bpd) under quotas but holds spare capacity of nearly 4.8 million bpd, Reuters news agency reported. Plans call for a hike in output toward 5 million bpd by next year.

How does the UAE's exit weaken OPEC and Saudi Arabia’s leadership? 
The UAE's exit removes one of the few OPEC members with meaningful spare oil capacity, leaving Saudi Arabia unable to easily share the burden of output adjustments.

The Gulf Kingdom has traditionally managed oil prices by cutting its own production and enforcing discipline across the group. With the UAE gone, Saudi Arabia will have to rely much more on its own oil production cuts to stabilize prices.

This will make defending oil prices more expensive and less effective for Riyadh. It also weakens the Kingdom's ability to manage and discipline the wider OPEC group.

David Oxley, chief climate and commodities economist at the London-based Capital Economics research house, called the move "the thin end of the wedge," warning in an analysis its website that "the ties binding OPEC members together have loosened."....

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"Once-unthinkable 200 yen coming into market view"

A twofer. First up Asia Times via MENAFN, April 7:

TOKYO - The Japanese capital is seeing a bull market in deja vu as policymakers man the battle stations against speculators dumping the yen.

With the Japanese currency on the verge of slipping to the psychologically important 160 to the dollar level, Ministry of Finance officials are pulling out all the stops to keep it from falling further.

Good luck with that, as traders buzz about the yen plummeting to 170, 180 or even the almost-unthinkable 200 level.

This foreign exchange battle comes at the worst possible moment for Japan, which is already grappling with stagflation. With crude oil around US$115 per barrel, Japan's $4.2 trillion economy is uniquely at risk as the Iran war goes awry. Roughly 95% of Japan's oil comes from the Middle East.

As the yen ratchets lower, the risk of higher imported inflation ticks higher. This dynamic worsens as high energy costs food, transportation, and a wide range of industrial goods.

Yet Japanese Prime Minister Sanae Takaichi has another problem - one nearly three decades in the making. Since around 1997, the most consistent policy across the 15 premierships has been prioritizing a weak yen through quantitative easing.

This week, 10-year JGB yields once again returned to 1999 highs as so-called“bong vigilantes” have Tokyo squarely in their sights. That has Japanese Finance Minister Satsuki Katayama pledging to work with G7 countries as the war in Iran sends global bond yields skyward.

Katayama notes that G7 finance ministers and central bankers have“shared views that developments in the Middle East and sharp fluctuations in oil prices are having a broad impact on markets.”

She added that“our stance has been that we will continue to stay in close contact (with G7 officials ) and ensure that we clearly communicate our message.”

Yet the spike in JGB yields also reflects fears about Takaichi's pre-Iran war fiscal priorities, including budget-busting tax cuts....

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And from Nikkei Asia, April 30: 

Yen breaches 160 to dollar; JGB yields surge to highest in nearly 3 decades
Hormuz blockade fuels higher oil prices and inflation fears, putting pressure on BOJ 

TOKYO -- The yen weakened past a psychologically significant threshold of 160 to the dollar, and long-term Japanese government bond (JGB) yields surged to 2.5% on Thursday as fears grew over the consequences of inflation fueled by a deepening energy crisis brought on by the prolonged war in the Middle East.

In early-morning trading, the yen was down 0.4% at around 160.17 against the dollar. The Japanese currency fell to 160.48 per dollar during Wednesday trading in New York, its lowest level in 21 months as investors sought haven assets like the greenback.

The depreciation has raised speculation that Japan's financial authorities might intervene to prop up the yen.

The dollar rallied amid a dearth of signs that U.S.-Iran tensions might be easing and as repercussions from the war are expected to complicate monetary policy management.

U.S. President Donald Trump on Wednesday signaled that the Strait of Hormuz blockade will continue until an agreement is reached with Iran. He told U.S. news outlet Axios, "The blockade is somewhat more effective than the bombing. They are choking like a stuffed pig. And it is going to be worse for them. They can't have a nuclear weapon."

The president also posted on social media the same day, saying Iran "can't get their act together. They don't know how to sign a nonnuclear deal. They better get smart soon!"

The globe has had its supply of energy disrupted since the U.S. and Israel's war with Iran broke out on Feb. 28.

Crude prices spiked anew on Thursday, with Brent climbing to its highest price since 2022, up over 7%, while those for West Texas Intermediate were higher by 6%.

Dollar buying also accelerated as more investors expect elevated oil prices linked to the Iran war to delay U.S. interest rate cuts. On Wednesday, the Federal Reserve held interest rates steady in its most divided decision since 1992....

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If interested see also April 28's Capital Markets: "Three Dissents in Favor of a Rate Hike Fail to Support the Yen" 

"China pushes EU capitals to scrap 'Made in Europe' law or face retaliation"

From EuroNews, April 29:

 As EU countries debate the European Commission’s proposal, Beijing is urging national governments to abandon the planned law. Otherwise, China says it will take countermeasures.

China has called on EU member states to revise the bloc’s proposed “Made in Europe” legislation, according to Suo Peng, trade and economy minister at China’s mission in Brussels.

The European Union is currently debating the draft, which was unveiled by the European Commission in March and aims to impose stricter conditions on foreign companies seeking access to EU public procurement and investment opportunities.

The proposal — widely interpreted as targeting Chinese firms — has already drawn a warning from Beijing. Earlier this week, China’s commerce ministry said it would consider retaliatory measures if the EU proceeds without significant changes.

“Chinese embassies in EU member states have conveyed China’s comments and suggestions to the governments of their hosting countries,” Peng told journalists in Brussels.

He added that if the EU “insists on this punishment and treats China’s enterprises in a discriminatory manner,” Beijing would be forced to respond with countermeasures.

Public procurement rules and investment limits 
The so-called Industrial Accelerator Act would, if adopted by EU governments and the European Parliament, prioritise European-made products in public procurement in sectors considered strategic, including automotive, green technologies, and energy-intensive industries such as aluminium and steel....

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Earnings: Amazon Beats, Stock Retreats (AMZN)

From Investor's Business Daily, April 29:

Amazon Beats Expectations, Reports Strong Cloud Growth. But Stock Slides 

Amazon (AMZN) stock slipped late Wednesday after the tech giant reported first-quarter results that exceeded expectations, helped by strong cloud growth. The company's guidance for the current quarter was mixed.

Amazon said that it earned $2.78 per share for the March-ended quarter, up 74% from a year earlier. Helped by pre-tax gains from Amazon's Anthropic investment, the EPS beat the $1.63 per share that analysts polled by FactSet were forecasting. Sales increased 17% to $181.5 billion, compared to analyst estimates of $177.3 billion.

Amazon Web Services revenue increased 28% to $37.6 billion, compared to analyst expectations for 26.2% growth from the cloud business. Revenue grew 23.6% in the fourth-quarter and 20.2% in the third-quarter.

Investors have been closely watching AWS growth out of fear that Amazon is losing its market-leading cloud position to AI-driven gains by Microsoft (MSFT) and Google-parent Alphabet (GOOGL)....

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The stock is down $5.29 (-2.01%)  

Among the other hyperscalers reporting today:

META is down $44.60 (-6.67%)

MSFT is down $10.07 (-2.37)

Google is up $19.60 (+5.64%)

Conference calls ongoing.