Good morning,
Investment advice doesn’t usually come from foreign political leaders. On Sunday, it did... and so far, it’s working like clockwork.
Mohammad Bagher Ghalibaf, Iran’s parliament speaker and a central power broker, called out a pattern many have suspected but haven't said out loud.
Pre-market headlines on the Iran war, he said, are often setups for profit-taking. The idea isn’t to follow them, but to bet against the initial reaction.
“If they pump it, short it. If they dump it, go long,” Ghalibaf said.
Within hours, markets followed the script to a tee:
S&P 500 futures opened down nearly 1% late Sunday and approached correction territory
Five hours later, losses fully reversed and futures turned positive
Early Monday, President Trump posted “great progress” on Iran talks
The S&P 500 then surged, rising roughly 100 points and adding about $900 billion in market value
This roller coaster pattern has become familiar over the past month: early-week optimism before markets open, followed by more cautious or negative messaging into the weekend.
Whether U.S.-Iran peace talks are actually progressing remains unclear. What is clear is that investors are increasingly reacting to headlines… then quickly reversing course.
The lesson: in highly unpredictable markets, the first move is often the wrong one.
Let's break it down!
— Sam Bourgi, Interim Editor
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Five things to know before opening bell
📈 Nasdaq speeds up index entry on IPO wave
Nasdaq is moving ahead with a rule change that would shorten the timeline for newly listed large-cap companies to enter its main index. The shift could give companies like SpaceX quicker access to index-tracking funds, boosting early demand for their stock. It also comes as a new wave of AI companies prepares to go public, increasing the chances of bigger, faster moves after listing.
🔥 German inflation jumps on energy shock
Germany’s headline inflation rose from 1.9% in February to 2.7% in March, marking the first full month in which higher oil prices from the Iran conflict were fully reflected in the data. Core inflation held steady at 2.5%, while services remained unchanged at 3.2%, suggesting underlying pressures haven’t accelerated yet. But if energy costs remain elevated, headline inflation is likely to follow.
🛢️ Brent crude tops $115 before pulling back
Brent crude opened the week above $115 per barrel, hitting fresh highs. Prices later eased after President Trump signaled potential negotiations with Iran, underscoring how quickly sentiment can flip on headlines tied to the Iran war.
✈️ European jet fuel prices surge
The Iran war is hitting aviation hard, with European jet fuel prices doubling since the conflict began. Benchmark prices have climbed above $1,600 per metric ton, up from under $800 in February. The immediate consequence is likely to be higher airfares, as airlines pass rising fuel costs on to travelers.
🏦 Rate hike bets cool after Powell comments
Expectations for further Fed rate hikes faded after Chair Jerome Powell said longer-term inflation expectations remain contained, suggesting the energy shock may be temporary. Bond yields fell and stocks moved higher as markets adjusted. The S&P 500 rallied before pulling back later in the day.
Fuel costs are breaking Carnival’s “no recession” signal
Carnival was supposed to be proof that the economy wasn’t heading toward a recession.
Record bookings. Record revenue. Full ships charging premium prices. If consumers were still dropping four figures on cruises, the narrative that the economy was losing steam didn’t hold up.
No longer does that seem to be the case. And not because demand is fading. Because fuel is.
The hidden costs are building up
Carnival just told investors to brace for an unprecedented surge in fuel expenses:
It expects $610 million in fuel costs across the three months ending in May, up 53% from the previous three-month period
That’s roughly $80 million above analysts’ expectations
Full-year fuel expenses are now expected to hit about $2.15 billion, up roughly a third
That alone has already forced a 5% cut to profit forecasts. That may not sound like much, but to the travel business, that means the world because of razor-thin margins.
Not only that, Carnival is more exposed to higher fuel costs than its peers.
Most transport-oriented companies hedge fuel to smooth out price spikes. In other words, they lock in fuel prices in advance to avoid surprises. Carnival doesn’t.
So when oil prices jump, it pays more right away. Unlike other expenses, this isn’t something Carnival can cut back on. Ships still have to sail, no matter what fuel costs.
Can Carnival just charge more?
Cruises are already priced in a relatively premium range, about $700 to $1,300 for a week-long trip. There’s some room to raise prices, but only to a point, especially since Carnival has already increased fares in recent years.
The bigger constraint is that the trip is getting more expensive for travelers, even before Carnival raises prices. Airfare to major cruise ports like Miami or Barcelona has increased alongside fuel prices. Driving to a port costs more as gas prices rise.
At the same time, higher spending on food and utilities leaves travelers with less money available for vacations.
That matters because cruises are planned purchases. When the full trip cost climbs by a few hundred dollars, some travelers delay booking or choose shorter, cheaper options instead.
📌 Bottom line: Carnival is still in good shape. People are booking trips, ships are full, and demand hasn’t broken. But fuel is starting to eat into profits and that is already priced in, with the stock down about 20% this year.
Did luxury’s 15-year boom finally break?
High-income households emerged from the pandemic with higher asset prices, strong income growth, and less sensitivity to inflation…
...and they poured billions into luxury brands such as LVMH, Hermès, Kering, and Estée Lauder.
But it looks like the luxury boom is starting to slow for the first time since the Great Recession, signaling that even top-quintile consumers are starting to pinch pennies.
The luxury boom hits a wall
According to data from Fiscal.ai, 2025 was the first year since 2009 that luxury sales declined outside the pandemic.
The data tracks major luxury groups, including LVMH (MC), Kering (KER), Hermès (RMS), Estée Lauder (EL), Richemont (CFR), and Capri Holdings (RACE).
According to Fiscal.ai:
Luxury grew from a $41 billion industry in 2006 to $171 billion in 2024
Total sales slipped to $169 billion in 2025, led by weaker performance at Kering and LVMH
That’s a small drop on paper, but it breaks a nearly 15-year growth streak.
It also points to a shift in demand beneath the surface. Entry-level luxury buyers, customers who helped drive growth over the past decade, are starting to pull back.
At the same time, even higher-end shoppers are no longer increasing spending at the same pace.
The rare setup that made luxury boom
The surge in luxury was built on three very specific forces that emerged from the financial crisis and accelerated during the pandemic:
Asset inflation: The S&P 500 rose from roughly 1,400 in 2006 to over 6,000 by 2025, more than tripling. That created a massive wealth effect, especially for higher-income households that own most financial assets.
Wealth concentration: The top 10% of U.S. households now control roughly 70% of total wealth. Luxury brands are heavily exposed to this group, which benefited the most from rising asset prices.
Strong consumer confidence: For most of the post-2009 period, job markets were stable and incomes were rising, allowing even “aspirational” buyers to stretch into luxury purchases.
All of these drivers are now either flat or reversing.
Inflation has stayed elevated longer than expected, eating into disposable income. Stock market gains have become more uneven, reducing the broad-based wealth effect.
And hiring has slowed, particularly in higher-paying sectors that feed discretionary spending.
📌 Bottom line: The luxury industry remains large and profitable, but the conditions that powered its post-2009 expansion are starting to fade. The result is a clear slowdown, especially among the marginal buyers who helped fuel the boom.