WS #7955

The dominant signal in this window is the final University of Michigan consumer sentiment data for May, which was revised sharply lower to 44.8 (consensus 48.2, prior 49.8), a fresh record low. Inflation expectations surged: 1-year to 4.8% (prelim 4.5%) and 5-year to 3.9% (prelim 3.4%, prior 3.5%). This stagflationary surprise is cross-corroborated by CNBC, Seeking Alpha, and multiple Bloomberg/Bluesky posts. The data reinforces the bearish consumer discretionary thesis and supports Fed hawkishness—Waller's speech (also in this window) explicitly cites rising inflation expectations as a reason to hold rates steady. Separately, the Iran/Strait of Hormuz narrative remains elevated: CENTCOM reports 97 vessels redirected, Iran rejects US nuclear talks, and Pakistan's Field Marshal is traveling to Tehran to mediate. OilPrice.com notes Brent over $103 and the Strait remains shut. The Conference Board LEI inched up 0.1% vs -0.1% expected, a modest positive but insufficient to offset the consumer sentiment shock. Intel is reportedly joining the race to buy AI startup Tenstorrent, a bullish signal for INTC and the AI chip space. Dell continues to surge on AI server demand (Wells Fargo PT raise). The consumer sentiment data is the highest-significance item, ESCALATING the stagflation narrative. The Iran situation remains STABLE but elevated. The LEI beat is a minor positive but does not change the bearish macro tilt.