"Stunning Quarter": Highest Earnings Growth In Over Two Decades

Yesterday, Deutsche Bank's head of thematic research published his latest chartbook, "The Great 2026 Reset," which delves into the market and political implications of the Iran conflict (available here to pro subs).

One key topic explored by Reid is the remarkable US Q1 earnings season. As we previewed ahead of the start of reporting seasons, earnings are significantly exceeding consensus estimates across all metrics, despite a high bar.

S&P 500 earnings growth is projected to accelerate sharply from 13.4% in Q4 to 24.6% in Q1 – a four-year high and a level rarely seen outside of post-shock recoveries. Excluding special factors, this represents arguably the strongest earnings growth in two decades.

The AI boom is a clear contributor, but strength is widespread, with double-digit growth seen in average and median companies, and all 11 sectors posting positive growth for the first time in four years. This strong performance has in many places been driven by higher prices amid supply constraints, surging demand within the AI value chain, and other disruptions.

In light of these robust Q1 results, DB has raised its 2026 EPS forecast from $320 to $342, driven by strong Q1 beats, gravity-defying performance in MCG & Tech, and higher oil and commodity prices.

Reid says it's worth noting that while the US equity market has outperformed many markets since the start of the Iran conflict, this has only moved it from the bottom quartile to the middle of the global pack year-to-date.

Even with a surge since the conflict began, tech performance over the past six months (since the end of October) shows only a modest increase.

Given current high valuations, strong earnings growth is helping the US market "grow into" these valuations, yet other markets have demonstrated notably better performance over the last 18 months.

More in the full DB note available here.

Tyler Durden Thu, 05/07/2026 - 13:55

Iranian President Says Iran Willing To Prove Peaceful Nature Of Nuclear Program

Iran has told other regional countries that it is ready to 'prove' that its nuclear program is peaceful in nature, and that it is willing to meet international standards in that regard, according to the Iranian presidency.

This comes as Iran's Foreign Ministry has insisted that the nuclear issue be left out of talks related to ending the war with the US, with a statement saying that "at this stage, we do not have nuclear negotiations" - but which remains a key demand by Washington.

Within years after the first Trump administration unilaterally pulling out of the earlier Obama JCPOA nuclear deal, the Iranians had booted IAEA inspectors from the country, citing that the deal was collapsing due to Washington policies, which included the reimposition of far-reaching sanctions.

Anadolu Agency

The appeal for international verification that its program is for peaceful nuclear energy and domestic consumption comes via Turkish media this week:

Iran is fully prepared to meet global standards to demonstrate the peaceful nature of its nuclear program, the presidency said on Tuesday.

The remarks came during a phone call between President Masoud Pezeshkian and Iraqi Prime Minister-designate Ali al-Zaidi, according to a statement from Iran’s presidency.

Pezeshkian said Iran had shown full readiness in all negotiations to offer assurances within the framework of international regulations and global monitoring mechanisms. He criticized what he described as contradictory US policies, saying Washington continues to apply pressure while simultaneously calling for negotiations.

Iraq's Zaidi in turn said Baghdad is prepared to support de-escalation efforts and could host talks between Iran and the United States, according to the statement. Iraq itself has been deeply impacted by the war, and Iran has even fired ballistic missiles and drones on the north, reportedly targeting US troop installations in or near Erbil in Kurdistan.

Also, earlier this week widely a Reuters report raised eyebrows and serious questions related to the effectiveness of the 38-day aerial campaign which saw US-Israel bombs unleashed in the many thousands (combined: some 20,000+ munitions expended) on the Islamic Republic.

"US intelligence assessments indicate that the time Iran would need to build a nuclear weapon has not changed since last summer, when analysts estimated that a US-Israeli attack had pushed back the timeline to up to a year, according to three sources familiar with the matter," the report lays out.

"The assessments of Tehran's nuclear program remain broadly unchanged even after two months of a war that US President Donald Trump launched in part to stop the Islamic Republic from developing a nuclear bomb," it continued.

New satellite imagery: Iran may have taken fresh "passive defensive measures" near Natanz nuclear facility...

IRAN NUCLEAR UPDATE: Possible NEW Passive Defensive Measures Noted at Pickaxe Mountain

Based upon newly available satellite imagery of the Pickaxe Mountain underground complex, just south of the Natanz Nuclear Complex, it appears that as early as April 22nd, the two eastern… pic.twitter.com/KGAhBkLks8

— Inst for Science (@TheGoodISIS) May 6, 2026

President Trump as well as Israeli leadership have persisted in advancing the narrative than Tehran is bent on achieving a nuclear bomb, something which the Iranians have repeatedly denied. But there's a concern over deep division between the IRGC and civilian leadership, with 'hardliners' in the former camp seen as more ready to seek a nuke.

Tyler Durden Thu, 05/07/2026 - 13:35

DOJ To Ask Supreme Court To Intervene In E. Jean Carroll's Lawsuit Against Trump

Authored by Matthew Vadum via The Epoch Times,

The U.S. Department of Justice (DOJ) said it will ask the U.S. Supreme Court to allow it to intervene in President Donald Trump’s appeal of the $83.3 million jury award E. Jean Carroll won against him in a defamation lawsuit.

The DOJ will ask the Supreme Court to substitute the United States for Trump in the lawsuit, arguing that in 2019, during his first term as president, when Trump denied Carroll’s sexual assault claims against him, he was acting as an employee of the government.

Assistant U.S. Attorney General Brett Shumate said in a filing with the U.S. Court of Appeals for the Second Circuit on May 5 that the DOJ will invoke the federal Westfall Act in a bid to substitute the federal government for Trump as the defendant in the lawsuit. The appeals court previously denied the request to replace Trump as the defendant.

The DOJ argues that Trump is immune from suit because he was acting within the scope of his presidential duties and speaking on matters of public concern when he made the statements about Carroll that led to the $83.3 million verdict.

A federal jury ordered Trump to pay those damages over the statements in which he denied the sexual assault allegations and accused Carroll of lying.

The Westfall Act shields federal employees from common law tort lawsuits arising from their government employment.

Common law refers to the body of law developed over centuries by court rulings, as opposed to statutes passed by legislatures. A tort is a wrongful act or infringement of a right that gives rise to civil liability.

If a federal employee is sued in his individual capacity for a tort that occurred while he was acting within the scope of his employment for the government, the act states that “the United States shall be substituted as the party defendant,” and the court will dismiss the employee from the lawsuit.

Carroll, an author, testified during a 2023 trial that Trump attacked her around 1996 in a dressing room in a department store near Trump Tower in New York City. Trump denied the allegations.

In its May 2023 verdict, a federal jury held Trump liable both for sexually abusing Carroll and defaming her when he made statements in October 2022 denying her allegations. The jury awarded Carroll $5 million in damages.

The Second Circuit upheld both the $5 million verdict and the $83.3 million verdict on appeal.

Shumate urged the Second Circuit to stay the award, noting that the DOJ intends to file a petition with the Supreme Court challenging the circuit’s denial of a request to substitute the government as defendant in the lawsuit.

The Epoch Times reached out to Carroll’s attorney, Roberta A. Kaplan, for comment. No reply was received by publication time.

Separately, on May 5, Trump asked the Second Circuit to stay the award to give him time to prepare an appeal to the Supreme Court over the circuit court’s rulings.

Trump previously filed a petition with the Supreme Court in November 2025 to challenge the $5 million verdict. It is unclear when the high court will act on it.

Tyler Durden Thu, 05/07/2026 - 13:15

Inflation Expectations Jump To 3 Year High As Financial Pessimism Surges: NY Fed Survey

Ahead of tomorrow's jobs report which is expected to show a substantial slowdown from last month's 178K surge, moments ago we got another reminder that the stagflationary iceberg remains front and center ahead of the US, after the NY Fed's latest monthly survey of consumer expectations reported that Inflation expectations at the one-year horizon rose again to 3.64% in April from the previous month’s 3.42%, the highest since September 2023. Inflation expectations were unchanged at 3.15% for the three-year-ahead horizon and also unchanged at 3.01% at the five-year-ahead horizon in April. 

The jump in year-ahead expectations took place even though 1 year gas inflation expectations tumbled sharply in April to 5.11% from 9.42% in April, which had been the highest reading since March 2022.

Other commodity price change expectations also rose, but to a more limited degree: food prices are now expected to rise 5.2%, down from 6%; medical costs to rise 9.6%, also a bit lower than the 9.7% in March; the price of a college education to rise 8.8% (down from 9%); and rent prices should drop from 7.1% to 6.0%.

Turning to the labor market, sentiment has continued to deteriorate fast with respondents saying that the mean probability the US unemployment rate will be higher next year rose another 0.4% (after the 3.6% jump a month ago) to 43.9%; highest reading since April 2025

On the other end, median one-year-ahead earnings growth expectations rose by 0.3% to 2.7% in March, tied for the highest since April 2025.

More bad news: the mean perceived probability of losing one’s job in the next 12 months increased again, this time by 0.2% to 14.6%, tied with the series’ 12-month trailing average of 14.6%. The mean probability of leaving one’s job voluntarily, or the expected quit rate, in the next 12 months declined by 0.1% to 18.2%.

A silver lining: the mean perceived probability of finding a job if one’s current job was increased modestly by 0.1% to 46.0%, while remaining below its 12-month trailing average of 47.5%. The increase was broad-based across age, education, and income groups.

Perceptions about households’ current financial situations also deteriorated compared to a year ago, with a larger share of households reporting a worse financial situation and a smaller share reporting a better financial situation. Year-ahead expectations about households’ financial situations also worsened, with the share of households expecting a worse financial situation at its highest level since April 2025, and a smaller share of households expecting a better financial situation in one year from now.

Perceptions of credit access compared to a year ago also deteriorated, with a higher share of households reporting it is harder to get credit and a smaller share of households reporting it is easier to get credit. Expectations for future credit availability deteriorated, with the net share of respondents expecting it will be harder to obtain credit in the year ahead increasing.

 There was a glimmer of good news when it comes to household debt: the average perceived probability of missing a minimum debt payment over the next three months decreased by 0.9% to 11.4% the lowest reading in more than two years and below the 12-month trailing average of 13.2%. 

But the most concerning data was that expectations for household income dropped again, for a 5th straight months, sliding to just 2.8%, the lowest since Oct 2025...

... while spending growth expectations jumped to 5.4% - after all those inflation-adjusted prices aren't going down without a recession - the highest since July 2023.

And some more Household Finance observations:

• The median expectation regarding a year-ahead change in taxes at current income level increased by 0.3 percentage point to 3.4%.
• Median year-ahead expected growth in government debt increased by 0.2 percentage point to 10.0%, its highest reading since June 2023.
• The mean perceived probability that the average interest rate on saving accounts will be higher in 12 months increased to 26.7%, its highest reading since November 2024.
• The mean perceived probability that U.S. stock prices will be higher 12 months from now increased by 2.1 percentage points to 38.4%

More in the full report from the NY Fed.

Tyler Durden Thu, 05/07/2026 - 12:44

Boeing Shares Rise As CEO Set To Join Trump On China Trip, Fueling Aircraft Order Speculation

Boeing shares rose in late-morning trading in New York after CNBC reported that CEO Kelly Ortberg will join President Trump on his trip to Beijing next week for talks with President Xi Jinping.

Boeing shares climbed a little more than 2% on the news as traders began to price in the possibility of a Chinese aircraft order, potentially covering both narrow-body and wide-body jets from the U.S.-based aircraft manufacturer.

Senator Steve Daines, who is leading the bipartisan delegation to China, has called for stability and peaceful cooperation between the U.S. and China.

"I strongly believe that we want to de-escalate, not decouple. We want stability; we want mutual respect," Daines said in opening remarks at a meeting with Chinese Foreign Minister Wang Yi on Thursday, according to Reuters.

Daines also released a statement:

Readout of Daines' Congressional Delegation Trip to China

U.S. Senators Steve Daines (R-MT), Maria Cantwell (D-WA), Jerry Moran (R-KS), and Deb Fischer (R-NE) today conducted three official meetings in Beijing with Premier of China Li Qiang, Chairman of the National People's Congress Zhao Leji, and Director of the Office of the Central Foreign Affairs Commission and Foreign Minister Wang Yi.

The bipartisan delegation discussed the importance of direct and open communication between the leadership of the two countries as well as issues of international and local importance. Topics of discussion included cooperation to stop the flow of fentanyl precursors, Iran and the Strait of Hormuz, and supply chain security. The Senators discussed the importance of reciprocal trade and opening up China's markets to sustained agriculture trade across beef, wheat, pulse crops, potatoes, apples, cherries, soybeans, grain sorghum, seafood, and other industries. The delegation also discussed the importance of China's relationship with Boeing and the proposed aircraft purchase currently under consideration. The Senators expressed their hope for an impactful and successful summit between President Trump and President Xi next week.

Readout of Daines’ Congressional Delegation Trip to China pic.twitter.com/0rtj6CZNTj

— Steve Daines (@SteveDaines) May 7, 2026

Related:

• Did Trump Force China's Hand? Beijing Nears 500-Jet Boeing Deal Ahead Of Xi Summit

Semafor speculates that the Trump team will invite "CEOs from Nvidia, Apple, Exxon, Boeing, and other big companies." 

Given Beijing's history of using large commercial aircraft purchases as goodwill gestures, Ortberg's inclusion on the trip raises the likelihood that Boeing could benefit and suggests tensions are cooling between the two superpowers, despite ongoing energy and trade turmoil in the Gulf region.

Tyler Durden Thu, 05/07/2026 - 12:25

Planet Fitness Crashes Most On Record After Membership Slump Hits Outlook

Planet Fitness shares crashed the most on record, according to Bloomberg data going back to 2015, after the budget gym operator slashed its full-year outlook, citing weaker-than-expected new-member sign-ups during the first quarter.

CEO Colleen Keating told analysts, "We faced some internal and external headwinds that impacted our join momentum year-to-date."

Keating said, "Our overall performance reflects the strength and resiliency of our model. However, the addition of more than 700,000 net new members during the quarter did not meet our expectations."

She continued, "Severe cold and winter weather in late January and February disrupted joins, especially as several of the storms fell on Mondays, our busiest join day of the week. We anticipated that our March campaign, Black Card first month free, which was very successful during the same time last year, would improve our join momentum over the remainder of Q1 and into Q2," adding, "Yet as we moved through March and into early April, our join trends remained below our plan."

Planet Fitness now expects 2026 sales growth of about 7%, down from prior guidance of roughly 9%. It also cut its adjusted EPS growth outlook to about 4%, well below the Bloomberg Consensus of 9.7%.

Here's a snapshot of the full-year forecast, courtesy of Bloomberg:

• Sees club sales growth up about 1%, saw up about 4% to 5%

• Sees revenue up about 7%, saw about up 9%

• Sees adjusted EBITDA up about 6%, saw about up 10%

• Still sees system-wide new club openings of about 180 to 190 locations

While first-quarter sales and profit beat Bloomberg Consensus estimates, traders focused on dismal membership trends. Shares crashed 32% in the early U.S. cash session.

In the year, Planet Fitness shares are down nearly 60%, trading at levels last seen in Covid 2020 lows. Shares have fallen 61% since late 2025.

Not one analyst questioned Planet Fitness executives on whether GLP-1 trends impacted membership.

Tyler Durden Thu, 05/07/2026 - 11:55