1. 1Q26 Earnings Update.

The current earnings season is still in its early stages, with only 24% of S&P 500 companies having reported. Initial results nonetheless point to positive trends: corporate confidence in full-year targets remains high, with most companies maintaining or raising guidance even as macroeconomic uncertainty featured prominently across management calls.
Across the companies that have reported, the overarching theme is one of heightened vigilance but limited near-term impact observed to date, with the notable exception of directly exposed sectors like Airlines and Energy. Most companies have acknowledged the conflict as a significant source of macro uncertainty, yet the majority report that, as of 1Q, they have not seen material negative effects flow through to demand, credit quality, or consumer behavior.

Below: % of companies beating expectations

2. Goldman estimates that AI investment will drive roughly 40% of S&P 500 EPS growth in 2026.

“The debate around AI disruption, and therefore uncertainty about many companies' terminal values, will persist for at least several quarters. The threat of disruption will likely represent a persistent overhang until later stages of AI adoption," they added. Goldman noted that in recent quarterly earnings calls, only 5% of S&P 500 firms discussed financial metrics beyond five years.
"We think more managements should prioritize discussions of the long-term outlook (to investors),since the value of a high-growth company is especially sensitive to changes in its long-term growth outlook”.

3. "Whatever it takes".

Merz has pledged to transform the Bundeswehr into the "strongest army in Europe".
Both the FT and Reuters report that the German government will propose to increase 2027 defense spending by another 21%, on track to spend 3.7% of GDP on defense by 2030.
But, since October 2025 the defense stocks are down by an average of 36%. We believe there are three reasons: concerns on a Russia-Ukraine peace deal; concerns on execution risk; concerns over the changing nature of warfare (i.e., drones vs. vehicles and ammo). Whilst all these factors merit consideration, we believe that investor concerns are overdone and more than reflected in the prices. 

Here is Rheinmetall.

4. China is the biggest R&D spender.

Let that sink in!

5. Alphabet/Google delivered the cleanest earnings beat of the night with Cloud growing +63%.

Alphabet plans to invest up to $40 billion in Anthropic (Claude).
Anthropic’s Claude may compete directly with Gemini, but Alphabet is backing it anyway because the infrastructure layer matters more than model loyalty.
Claude is becoming one of the defining products of the AI era, especially in coding, and Anthropic’s annualized revenue run rate reportedly jumped from $9 billion at the end of 2025 to $30 billion by April 2026. Yet Google is still leaning in, because every major winner in AI will need enormous compute, cloud, and networking capacity to operate at scale.
Google wants to win that layer. Q1 FY26 made the case.

Not a subscriber yet?