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Wednesday, April 1

Noteworthy macro moves today: Nikkei 225 Index (Japan) +3.9%. DAX 30 Index (Germany) +2.3%. Hang Seng 50 Index (China) +2.4%. Noteworthy US mega-cap moves today: Exxon Mobil Corp (XOM) -3.0%. Tesla Inc (TSLA) +2.4%. Broadcom Inc (AVGO) +2.0%. 

Global equity markets are trading higher following optimism surrounding potential de-escalation in the Middle East conflict, as U.S. President Donald Trump indicated that the Iran war could end within two to three weeks without a formal agreement to reopen the Strait of Hormuz. This sentiment has contributed to significant gains across major indices, including a notable rise in Japan's Nikkei 225 Index by approximately 3.9%.

In economic data released this morning, U.S. retail sales rose by 0.6% month-over-month in February, exceeding expectations and marking the strongest performance in seven months. Additionally, the ADP Employment Report showed an increase of 62,000 jobs in March, significantly surpassing forecasts of only 40,000 new jobs added and reflecting resilience in the labor market despite ongoing economic uncertainties.

Market reactions have also been influenced by rising mortgage rates; the average U.S. 30-year mortgage rate increased to 6.57%, its highest level since August last year, leading to a decline in mortgage applications by over 10%. This development raises concerns about housing affordability and buyer confidence amid geopolitical tensions affecting inflation expectations and overall economic stability.

Energy Select Sector SPDR Fund (XLE) [-2.5%]
U.S. crude oil stocks surged significantly, defying forecasts of a decrease and indicating potential oversupply in the market, which could negatively impact energy prices and assets like the Energy Select Sector SPDR Fund (XLE). Concurrently, President Trump's announcement to end military operations in Iran without reopening the Strait of Hormuz has contributed to easing geopolitical tensions, further pressuring crude oil values. These developments are likely influencing the recent performance of XLE, which is trading lower in pre-market hours, reflecting a continuation of the downward trend observed since Tuesday's close. The top contributors to XLE's performance include major holdings such as ExxonMobil and Chevron, both of which have experienced notable declines. Additionally, WTI oil prices have also dropped, further aligning with the negative movement in the ETF.

iShares MSCI Japan ETF (EWJ) [+2.4%]
The iShares MSCI Japan ETF is trading higher following the release of Japan's latest Tankan survey data, which indicates a mixed economic outlook. Capital expenditure for Q1 has dropped significantly, reported at 3.3%, down from 12.6% in the previous period. However, the Big Manufacturing Outlook Index improved to 14, exceeding estimates, while the Large Non-Manufacturers Index rose to 36, surpassing expectations as well. Additionally, the Large Manufacturers Index slightly increased to 17, indicating some resilience within the manufacturing sector. This positive data is coinciding with broader market trends, as Asian and global stock markets are also experiencing gains, particularly following optimistic news regarding the potential de-escalation of geopolitical tensions. In pre-market trading, the ETF has shown notable gains since Tuesday's close.

NKE | -11.3% | -8.0B
Nike Inc | Footwear
Nike Inc's stock has experienced significant downward pressure following its recent earnings report, which revealed a cautious outlook for Q4. The company anticipates a revenue decline of 2% to 4%, markedly below analyst expectations, with a particularly concerning forecast of a 20% drop in its Greater China market. Despite exceeding Q3 earnings expectations with revenues of $11.28 billion and earnings per share of $0.35, the stock fell sharply in after-hours trading due to the negative guidance and ongoing issues related to excess inventory and tariffs. This morning, shares continued to decline in premarket trading, reflecting heightened concerns among analysts who have downgraded their price targets, emphasizing worries about Nike's recovery timeline and performance in China. The company's revenue guidance for Q4 FY2026 has been set at $10.7 billion to $10.9 billion.

MRVL | +3.6% | +47.8B
Marvell Technology Inc | Semiconductors
Marvell Technology Inc. has seen a notable increase in its stock price, primarily due to a recent upgrade from Bank of America Merrill Lynch, which raised its price target from $110 to $125 while maintaining a Buy rating. Additionally, the announcement of a partnership with Nvidia is expected to integrate Marvell's products with Nvidia's AI systems, further enhancing the company's market position. This collaboration is already yielding positive results, with shares surging significantly following the news. In the broader context, Marvell's stock is trading higher alongside a generally strong market, as indicated by the upward movement in the Nasdaq 100 Index.

LI | +4.6% | +1.4B
Li Auto Inc | Automobile Manufacturers
Li Auto Inc. reported vehicle deliveries of 41,053 for March 2026, marking a 12% year-over-year increase and a substantial 55% rise from February. This brings the company's cumulative deliveries to 1,635,357 as of March 31. The firm has successfully resolved production bottlenecks, with over 24,000 units of the Li L6 model delivered monthly. Additionally, Li Auto plans to launch an updated Li L9 model in the second quarter of 2026. The company operates 517 retail stores and 552 service centers across China, supported by a network of over 4,000 supercharging stations. In pre-market trading, shares are up significantly since Tuesday's close, reflecting positive sentiment around these delivery figures and operational developments.

UL | -4.0% | -5.5B
Unilever PLC | Personal Care Products
Investor Artisan Partners has expressed support for Unilever's strategy to divest its food unit, highlighting that this move would create a clearer distinction between its food and personal care segments. David Samra, managing director of Artisan Partners, described the potential transaction with McCormick as both "logical" and "tax-efficient," suggesting that this restructuring could yield an attractive sale price for shareholders. These developments have coincided with a significant decline in Unilever's stock price, reflecting investor sentiment regarding the company's operational focus. Currently, shares are trading lower, having dropped notably since Tuesday's close, indicating ongoing weakness in performance.

CVX | -2.2% | -8.1B
Chevron Corp | Integrated Oil & Gas
Chevron Corp's recent price decline is closely aligned with the broader Integrated Oil & Gas sub-sector, which is also experiencing significant downward movement. In addition, Chevron is engaged in exclusive discussions with Microsoft and Engine No. 1 regarding a long-term power supply agreement to establish a $7 billion natural gas-fired facility in West Texas. This facility aims to generate 2,500 megawatts of electricity for a major data center campus. While this strategic partnership reflects a notable development in Chevron's operations, the overall market sentiment remains pressured, contributing to the stock's lower performance during pre-market hours. Overall, Chevron is trading lower, continuing a trend observed over the past few sessions.

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