Earnings announcements and guidance are expected to overpower Wall Street since five of the Magnificent Seven stocks are reporting this week. All I can tell you is that order backlogs have become a big deal for data center-related companies, since they continue to grow. Although there is a pushback against data centers, in the U.S., the vast majority of states are still allowing data center construction.
There are simply too many states welcoming the data center boom, so I do not expect the data center boom to slow. Since data centers tend to go where there is fast internet, cheaper electricity, and cold climates to vent heat at night, Georgia, Idaho, Kansas, Louisiana, Michigan, Nevada, North Carolina, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Utah, and Virginia are all big winners from the data center boom.
The Naval blockade on Iran is reaching a critical point, since Iran has minimal storage facilities, so its oil wells will have to be capped soon. Once Iran’s oil wells are capped, it could take months to reactivate these wells. So, it will be interesting if the infighting within Iran will result in economic sanity. The goal of the Naval blockade is to cut off funds to the Iranian Republican Guard Corps (IRGC).
It is obvious that are expected to remain high, since even if the Strait of Hormuz reopens, world energy and fertilizer markets have been profoundly impacted. I am now not expecting any crude oil price relief until October, when worldwide demand has its normal seasonal decline.
In general, the bottleneck at the Strait of Hormuz remains a problem for the rest of the world, since the U.S. is largely unaffected, with the exception of California, which imports up to 30% of its gasoline from India and South Korea.