Morning Note: Ferocious

As I type this morning, 45 minutes before the market open, equity and commodity futures are being traded, I'll say, ferociously... 

Here are the obvious market moving headlines:

• Iran's Revolutionary Guard's Navy, with the end of "threats from aggressors" and in light of new procedures, safe and stable transit through the strait will be possible - State Media
• US & Iran closing in on one-page memo to end war - Axios

Now, while "ferociously" does not necessarily mean ferociously higher -- particularly when we're talking oil, gas and ag futures, and related equities (they're tanking) -- the major averages being up close to 1% in the pre-market is nothing to sneeze add... It's the transaction volume that appears ferocious on my screen; suffice to say that traders are scrambling this morning… Other notables left out of the pre-market party are US consumer staples, utilities and healthcare -- call it rotation into growthier stuff.

For our part, staying uber calm and measured, we continue to work the portfolio to best compensate for the risk and potential reward that our near-term assessment of probabilities dictate, while, most importantly, keeping a steady eye on the longer-term risk/reward setups.

Yesterday we consolidated three positions and, in the process, increased our exposure to grid infrastructure stocks... With more than a $trillion yet to spend on AI datacenters, suffice to say that our nation's energy capacity is in desperate need of expansion!  Two weeks ago we exited a currency position, using the proceeds to expand our weightings in 4 areas that stand to benefit markedly from an ultimate end to the Middle East conflict -- or, at a minimum, from the opening of the Strait of Hormuz.

Here's your succinct morning summation*:

PWA Market Summation — Wednesday, May 6, 2026

This morning's pre-market action is best understood as a relief trade in progress — and, as noted above, not all relief is created equal. Nasdaq 100 futures jumped roughly 1.5% while S&P 500 and Dow futures each added close to 0.9%, following fresh record closes for the major averages on Tuesday. The catalyst is the diplomatic headline cluster noted above: the White House is reportedly near a one-page memorandum of understanding with Tehran — the closest the parties have come to an agreement since the conflict began — with Iran expected to respond on several key points within 48 hours. Iranian state media added its own constructive signal from the Revolutionary Guard's Navy. The energy complex is repricing accordingly and swiftly: Brent crude briefly dipped below $100 per barrel — having traded above $126 just one week ago — while WTI lost as much as 11% to trade below $91 before paring some losses. That is a historically large single-session move in the world's most important commodity market, and it is rippling through the entire energy and agricultural complex. Yahoo Finance 

On the labor front, this morning's April ADP private payrolls report came in at 109,000 — a modest miss against the 120,000 consensus, but nearly double March's upwardly-revised 61,000. The trend is clearly improving, with hiring accelerating for several consecutive months off the conflict-driven lows. That said, the miss carries a subtle stagflationary undertone: the labor market is healing, but not robustly enough to put rate cut expectations back on the table — particularly with oil still north of $90 and the inflation impulse from the Hormuz disruption still working its way through the broader economy. The market is unlikely to dwell on the ADP miss today given the Iran headlines dominating the tape, but Friday's BLS nonfarm payrolls report — with private sector expectations clustered near 90–95k — will be the more definitive read on where the employment cycle actually stands.

The rotation underway in equities is telling its own story. The sectors conspicuously absent from this morning's rally — consumer staples, utilities, healthcare — are the classic capital "hiding places" that get crowded during prolonged geopolitical stress. Their underperformance today is a tell: money is moving back toward growth and cyclicals, pricing a meaningful probability of conflict resolution. Earnings are adding fuel: AMD surged roughly 18–20% on strong guidance and Supermicro rallied approximately 17%, reinforcing the AI infrastructure buildout narrative, while Disney popped roughly 6% after beating on both earnings and revenue. The AI-driven demand for power and grid capacity — a theme we have been positioned around — is showing up in corporate results, not just in projections. Yahoo Finance

Whether this morning's relief is durable or another head fake remains the central question. Trump himself introduced caution into the narrative, calling it a "big assumption" that Iran would agree to the U.S. proposal and warning that military action would resume at "a much higher level and intensity" if talks collapse. The next 48 hours are as binary as any we have seen in this conflict. We are watching carefully, staying measured, and — as always — letting the probabilities, not the headlines, drive the positioning. CNBC

This note is for informational purposes and is not a solicitation to buy or sell any security. Past performance is not indicative of future results. Please contact your advisor with any questions.

*Prepared by Marty Mazorra, Chief Investment Officer, Private Wealth Advisors. Research synthesis and drafting assisted by AI tools under advisor review. All market views, analysis, and recommendations are those of the advisor.