U.S. stock futures were mixed ahead of Friday's trading session. Dow Jones futures dipped 0.04%, while S&P 500 futures rose 0.46% and Nasdaq 100 futures climbed 1.40%.
In European markets, Germany's DAX index was up 0.16% at the time of writing. Conversely, Britain's FTSE 100 index fell 0.25%, France's CAC 40 declined 0.41%, and the Euro Stoxx 50 index gained 0.21%.
Oil prices retreated, with WTI crude down 0.91% to $94.98 per barrel. Brent crude decreased 0.45% to $104.60 per barrel.
Market sources indicate that a breakthrough in U.S.-Iran negotiations is "highly likely," with the Iranian foreign minister expected to lead a delegation to Islamabad. A government source confirmed that talks in Islamabad are highly probable to yield a breakthrough. The delegation, headed by Iranian Foreign Minister Araghchi, is anticipated to arrive in the Pakistani capital. Earlier, the Iranian foreign minister held a phone conversation with the Pakistani deputy prime minister and foreign minister, with both sides confirming the discussion. Pakistan's foreign ministry stated that the two parties exchanged views on regional developments, ceasefire efforts, and ongoing diplomatic initiatives within the context of U.S.-Iran engagement. Multiple media outlets reported that a U.S. negotiation delegation might arrive in Islamabad tomorrow.
In a move to hedge against wartime supply-driven inflation, the Trump administration has extended a shipping waiver for 90 days. This waiver simplifies the domestic transport of oil, fuel, and fertilizer, representing the latest White House effort to counter supply disruptions stemming from the Iran conflict. The decision extends the existing waiver, originally set to expire on May 17, for approximately three more months, permitting foreign-flagged vessels to transport goods between U.S. ports until mid-August. The waiver temporarily lifts restrictions on coal, crude oil, refined products, natural gas, liquefied natural gas, fertilizer, and other energy derivatives. The initial waiver applied to about 659 specific products identified by U.S. Customs and Border Protection, and the extension does not narrow the scope of covered goods.
Despite a U.S. blockade on Iranian shipping, Iran continues to load millions of barrels of crude onto Very Large Crude Carriers (VLCCs), although this operation is expected to become increasingly difficult. Satellite imagery from the EU's Sentinel-1 satellite on Monday showed a VLCC, capable of carrying about 2 million barrels of crude, docked at Kharg Island terminal. Earlier imagery from Saturday showed no vessels at the island. There is no evidence of significant volumes of crude circumventing the U.S. blockade, suggesting the loaded crude is likely filling available Iranian tankers in the region. Monday's imagery showed 13 vessels, mostly VLCCs, anchored east of the island, compared to roughly half that number seen in images from the day before the blockade began.
Has the U.S. stock market rally run its course? Fidelity warns that without a decline in oil prices, the market correction may persist. Jurrien Timmer, Fidelity's Global Director of Macro, noted that the longer oil prices remain elevated, the more prolonged the recent U.S. equity adjustment will be. Given that oil prices are currently dictating stock market movements, Timmer reviewed historical oil price shocks to assess potential future trends. Timmer stated, "The 1990 Gulf War pushed oil prices from $41 to $100 (in today's dollars), but this shock was short-lived, resulting in only a brief 19% price-to-earnings ratio contraction." He indicated that the market is now pricing in a similar outcome, and since the rebound appears complete, "we need to see this narrative continue for the current gains to be sustained." Timmer also compared the current situation to the post-2022 pandemic inflation surge, when oil prices rose from $79 to $136 (in today's dollars).
In corporate news, Intel (INTC) reported first-quarter results and second-quarter guidance that significantly exceeded market expectations, indicating the long-struggling chipmaker is benefiting from the massive AI infrastructure build-out wave. First-quarter revenue grew 7% year-over-year to $13.6 billion, well above the average analyst estimate of $12.4 billion. Non-GAAP net income was $1.5 billion, a 156% increase, while adjusted earnings per share were $0.29, up 123% and substantially higher than the average analyst estimate of $0.01. The gross margin was 41.0%, compared to 39.2% a year ago. Revenue from the Client Computing Group (CCG) was $7.7 billion, up 1% year-over-year; the Data Center and AI (DCAI) business generated $5.1 billion, a 22% increase; and the foundry business revenue reached $5.4 billion, growing 16%. The stock surged over 25% in pre-market trading, boosting the broader technology sector.
Newmont Mining (NEM) reported first-quarter profit that exceeded Wall Street expectations, as record high gold prices helped offset a decline in production. Adjusted earnings per share for the quarter ended March 31 were $2.90, compared to the average analyst estimate of $2.18 per share. First-quarter revenue surged 45.9% year-over-year to $7.31 billion, significantly surpassing market expectations of approximately $6.36 billion. The company's free cash flow hit a record $3.1 billion, skyrocketing 161% year-over-year. Adjusted EBITDA was $5.2 billion. CEO Natascha Viljoen described it as "one of the strongest quarters in Newmont's history," adding, "We have doubled the size of our share repurchase program with an additional $6 billion authorization."
SAP (SAP) reported better-than-expected first-quarter results, with its cloud business transformation accelerating, evidenced by 25% growth. The company maintained its strong full-year guidance. Total first-quarter revenue was €9.56 billion, a 12% year-over-year increase, exceeding market expectations. GAAP earnings per share were $1.94, and adjusted EPS was $2.01, both beating analyst estimates. Driven by the deep integration of business AI into its cloud portfolio, the company's cloud business and operating profit exceeded expectations. The current cloud backlog grew 25% at constant currencies. In terms of core performance, the current cloud backlog was €21.93 billion, up 25% year-over-year; cloud revenue reached €5.96 billion, a 27% increase, with cloud ERP suite revenue rising 30% to €5.21 billion. First-quarter operating profit was €2.87 billion, up 24%, with an operating margin of 30.0%, an improvement of 2.8 percentage points.
Nomura Holdings (NMR) reported record annual profits for the second consecutive year, with core businesses performing strongly across multiple areas. Full-year profit reached ¥362.1 billion. For the quarter ended March 31, net profit increased 2.7% year-over-year to ¥73.9 billion, although this figure fell short of the average estimate of ¥98.9 billion from four analysts. Fourth-quarter revenue was ¥577.2 billion, up 27% year-over-year; full-year total revenue was ¥21.7 trillion, a 15% increase. Benefiting from a recovery in Japanese financial markets, Nomura achieved record profits for the second year, despite its fourth-quarter results missing analyst expectations. Equity trading revenue at Nomura Securities grew 26%, marking the 12th consecutive quarter of growth, keeping pace with Wall Street firms that also reported double-digit increases. Fixed income business revenue rose 18%, the first increase in five quarters.
Procter & Gamble (PG) demonstrated brand resilience against Middle East conflict impacts, reporting its highest organic sales growth in over a year and maintaining its full-year outlook. The company reported stronger-than-expected latest quarterly results, primarily driven by robust performance in its beauty product line. Concurrently, the company significantly raised its full-year commodity-related cost expectations. Overall organic sales for the third fiscal quarter ended March 31 grew 3% year-over-year, exceeding the most optimistic forecasts from Wall Street analysts. Core earnings per share for the quarter were $1.59, above the consensus estimate of approximately $1.56 and the $1.54 reported a year ago. Third-quarter operating profit was about $4.576 billion, significantly higher than consensus estimates and roughly flat compared to the strong profit figure from the same period last year.
Meta Platforms (META) and Amazon have entered a multi-billion dollar, multi-year agreement, with Meta planning to lease tens of millions of Amazon's internally developed Graviton5 CPU chips. This deal elevates Meta to one of the top five global customers for Graviton. While Nvidia GPUs remain core for training, the rise of "agent AI" has surged demand for high-performance CPUs for multi-step task orchestration and real-time inference. This move is a key step in CEO Mark Zuckerberg's "multi-vendor strategy," aimed at reducing reliance on a single supplier by partnering with AMD, leasing Google TPUs, and utilizing Amazon chips to meet massive computing power demands. Simultaneously, Meta is implementing structural layoffs to offset AI infrastructure expenditures potentially reaching hundreds of billions of dollars.
From Nvidia's AI error correction to Cisco's (CSCO) push into "quantum internet," the quantum computing frenzy is creating significant waves as tech giants compete for commercialization. Cisco, one of the world's largest computer networking and internet equipment makers, showcased a high-performance switch chip designed for the quantum computing field. In a statement, the company, a foundational force in the internet era now riding the AI infrastructure wave, emphasized that this switch chip will enable the connection of different types of quantum computers. As quantum enthusiasm sweeps the globe, this move represents another key step for the hardware leader into cutting-edge technology—ultimately aiming to connect large networks of super quantum computers, much like its devices connect existing internet systems.
Tesla (TSLA) has initiated production of its Cybercab, a key milestone in CEO Elon Musk's "Physical AI" grand vision. Musk announced in a post on X that Tesla has begun manufacturing its Robotaxi model, the highly anticipated fully autonomous taxi named Cybercab. This move fulfills Musk's long-promised plan for large-scale Cybercab production, announced earlier in 2024, as the U.S.-based EV leader faces ongoing global declines in electric vehicle sales. Based on Tesla's latest earnings report and a capital expenditure plan exceeding $25 billion, Musk is prioritizing AI, Robotaxi, humanoid robots, and space-based AI data centers. The start of Robotaxi production is a crucial step towards the realization of Musk's "Physical AI super blueprint."
Key economic data and events scheduled for release include the University of Michigan's final Consumer Sentiment Index for April at 10:00 PM Beijing Time. The weekly U.S. rig count report for the week ending April 24 will be released at 01:00 AM Beijing Time the following day. The CFTC's weekly commitments of traders report is scheduled for 03:30 AM Beijing Time the following day.
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