The U.S. is implementing an economic chokehold on Iran. The U.S. is continuing to cut off the revenue to the Iranian Republican Guard Corps (IRGC) to get them back to the negotiation table and/or cause an Iranian regime change. The good news is that the ceasefire has been extended to facilitate ongoing negotiations. President Trump told Maria Bartiromo on Wednesday that the war with Iran is “close to over.”
There are now a reported 121 tankers, including 68 very large crude carriers (VLCC), headed to the U.S. to load up on crude oil. As a result, the U.S. trade deficit is expected to plunge due to soaring energy exports. President Trump was immensely proud that so many crude oil tankers were headed to the U.S. and that energy exports are surging. Whether or not expanding the U.S. energy exports was part of the “master plan” after the attacks on Iran commenced is subject to debate. Regardless, the U.S. influence over world energy markets remains now more dominant than ever.
This is a good time to remind all investors that the U.S. remains largely unaffected by the goods that are transmitted through the Strait of Hormuz. Although energy inflation has surged, U.S. economic growth is expected to accelerate due to booming exports and to approach 5% annual GDP growth.
Speaking of energy, one of the fundamentally superior stocks right now, , surged on the news that is expanding its purchase of the company’s natural gas fuel cells for its data centers. Oracle’s goal is to become the largest data center company in the U.S., so naturally, Bloom Energy is a beneficiary. With Bloom Energy’s natural gas fuel cells, the Oracle data centers do not have to depend on utilities to provide electricity for its aggressive expansion plans.
The Labor Department on Tuesday announced that the Producer Price Index () rose 0.5% in March and 3.6% in the past 12 months. This was substantially better than the economists’ consensus estimate of a 1.1% increase. Wholesale energy prices soared 8.5% in March, while food prices decline 0.3%. The , excluding food and energy, rose only 0.1% in March, which was much better than economists’ consensus estimate of a 0.5% increase. However, wholesale service costs were unchanged in March. Trade services declined 0.3% in March after also declining 0.4% in February, so it appears that a stronger U.S. dollar is putting downward pressure on some wholesale prices. Overall, the PPI was substantially better than expected, and great news that inflation is largely energy related.