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Wednesday, April 8

Noteworthy macro moves today: Oil (WTI) -16.2%. DAX 30 Index (Germany) +5.3%. Nasdaq 100 Index (US) +3.2%. Noteworthy US mega-cap moves today: Exxon Mobil Corp (XOM) -5.7%. Meta Platforms Inc (META) +5.1%. Tesla Inc (TSLA) +4.8%. 

Global equity markets are trading higher following the announcement of a two-week ceasefire agreement between the U.S. and Iran, which has eased concerns over oil supply disruptions in the Strait of Hormuz and contributed to a significant drop in oil prices, with WTI crude falling by over 16%. This development has led to a surge in major indices across regions, including a notable rise of approximately 5.3% in Germany's DAX and gains exceeding 3% in both the Nasdaq and other U.S. indices.

In economic data released this morning, U.S. mortgage applications fell by 0.8%, marking the fourth consecutive week of declines amid rising mortgage rates that have now dropped to an average of 6.51%. The decline in applications reflects ongoing uncertainty among consumers regarding housing affordability and market conditions influenced by geopolitical tensions.

Additionally, Germany's factory orders rose by only 0.9%, falling short of expectations for a stronger recovery after January's sharp decline of over 11%. This disappointing figure has contributed to negative sentiment among investors as they assess the broader implications for economic stability amidst mixed signals from various sectors within Europe’s economy.

United States Oil Fund LP (USO) [-13.8%]
The United States Oil Fund LP is experiencing significant downward pressure, largely due to the announcement of a two-week ceasefire between the U.S. and Iran, which has raised expectations for increased regional stability. This development coincided with a notable drop in WTI crude oil prices, which fell sharply following indications that military actions would be paused. The market reacted negatively, anticipating an easing of supply pressures, leading to substantial sell-offs in oil-related assets. Additionally, geopolitical risks remain heightened, as evidenced by a recent drone attack on Saudi Arabia's oil pipeline. In pre-market trading, the fund is down significantly since Tuesday's close, reflecting broader declines in oil prices and ongoing concerns about supply dynamics.

VanEck Gold Miners ETF (GDX) [+6.4%]
The VanEck Gold Miners ETF is experiencing a significant increase, driven by a ceasefire agreement between the U.S. and Iran that has eased geopolitical tensions, positively impacting gold prices. This favorable development has also led to the ETF being added to Evercore's TAP Outperform list, indicating strong analyst support. The surge in gold prices has alleviated inflation concerns and reduced expectations for Federal Reserve rate hikes, contributing to the ETF's notable daily return. Additionally, key holdings such as Newmont Corporation and Agnico Eagle Mines have made substantial contributions to the ETF's performance, reflecting the overall strength in gold equities amidst the current market environment.

DAL | +12.6% | +6.0B
Delta Air Lines Inc | Passenger Airlines
Delta Air Lines Inc reported its first-quarter earnings earlier this morning, revealing an adjusted EPS of $0.64 and revenue of $15.854 billion, both exceeding analyst expectations. Despite this strong performance, the company provided second-quarter guidance of an adjusted EPS between $1.00 and $1.50, which falls short of the consensus estimate of $2.28. The airline's stock surged following news of a ceasefire in the U.S.-Iran conflict, which contributed to a significant drop in oil prices, enhancing profitability prospects for airlines. Delta anticipates a $300 million benefit from its refinery operations in the upcoming quarter, aiding a projected pre-tax profit of $1 billion. The company's operating income for Q1 was $652 million, with an operating margin of 4.6%. In pre-market trading, Delta shares are moving higher alongside the broader market, reflecting overall positive sentiment in the Passenger Airlines sector.

AMZN | +4.1% | +95.2B
Amazon.com Inc | Broadline Retail
Amazon.com Inc. is experiencing a notable increase, buoyed by the overall market's upward momentum. The company's involvement in quantum computing through AWS has been highlighted by the recent launch of Rigetti Computing's 108-qubit quantum system, available via Amazon Braket, showcasing Amazon's commitment to technological advancement. Additionally, Amazon's strong financial performance is underscored by a revenue growth rate of 13.63%, superior EBITDA, and a favorable debt-to-equity ratio compared to its competitors in the Broadline Retail sector. This solidifies its competitive position and operational efficiency within the retail landscape. Concurrently, the asset is trading higher in pre-market hours, following a robust after-market session yesterday and remaining above its 20-day moving average.

TSLA | +4.7% | +54.2B
Tesla Inc | Automobile Manufacturers
Cathie Wood's ARK Investment has acquired 6,900 shares of Tesla, reflecting ongoing institutional interest in the company. Concurrently, an industry analysis highlighted Tesla's high valuation ratios, including a P/E ratio of 320.97 and a gross profit of $5.01 billion, which surpass industry averages despite a reported revenue decline of -3.14%. This data underscores Tesla's strong operational performance amid challenges in revenue growth. In the broader market context, Tesla is trading lower in pre-market hours, reversing from a recent peak, while discussions on social media noted a recovery in price after hitting a low, with users expressing optimism about the company's competitive positioning and recent advancements in its Full Self-Driving technology.

XOM | -5.5% | -38.5B
Exxon Mobil Corp | Integrated Oil & Gas
Exxon Mobil Corp's shares are trading significantly lower, primarily influenced by anticipated disruptions in the Middle East that are expected to impact first-quarter earnings. The company has projected a 6% decrease in upstream production due to these disruptions, which began in early March and affect assets accounting for about 20% of global oil-equivalent production. This situation is expected to result in upstream earnings declining by $300 million to $500 million and energy products earnings decreasing by $100 million to $300 million. These developments follow a recent SEC filing detailing the adverse effects of ongoing geopolitical tensions on production and earnings. The Integrated Oil & Gas sub-sector is also moving significantly lower, contributing to the broader market context surrounding Exxon Mobil's price movement.

HOOD | +8.2% | +5.5B
Robinhood Markets Inc | Investment Banking & Brokerage
Cathie Wood's ARK Investment has acquired 183,000 shares of Robinhood Markets Inc, amounting to an investment of approximately $13 million, which aligns with a broader trend in retail trading and has garnered significant attention. Additionally, Keefe, Bruyette & Woods has initiated coverage on Robinhood with a Market Perform rating and a price target of $75. These developments contribute to the positive sentiment surrounding the company. Robinhood is also trading higher alongside the broader market, reflecting an overall uplift in investor activity. The stock has notably reached the upper end of its one-month trading range, indicating robust market interest.

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