Trump Escalates Iran Conflict, Crude Oil Hits $110 & TSLA China EVs Climb

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Trump Escalates Iran Conflict, Crude Oil Hits $110 & TSLA China EVs Climb

WTI

United Airlines → 120
Southwest Airlines → 46
Alaska Air → 45
American Airlines → 15

ndx

Yesterday's high beta tech rally (Micron, Sandisk, Western Digital) propelling Nasdaq now pacing for lower open; market disappointed by lack of de-escalation clarity from Trump's address

wti

Crude up almost ten bucks for WTI - crude rallying today with vengeance Oil surging after Trump's address warning of further military aggression against Iran; continued conflict in Strait of Hormuz creating supply bottlenecks; energy prices will be higher

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reliably incorrect, often opposite to market

Welcome Jenny Horne, co-host on NextGen Investing. What do you make of the market setup?

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Market was bracing for binary outcome from Trump's address - either favorable response signaling war exit/exhalation, or continued escalation. We're on latter path.

Oil surging after news; Trump warned of further military aggression against Iran in 2-3 weeks, dampening hopes for imminent de-escalation.
speaker2

Yesterday's high beta tech rally (Micron, Sandisk, Western Digital) propelling Nasdaq now pacing for lower open, while energy equities rally.

Back and forth pattern we've seen for several weeks.
Market was looking for specific answers but got more of the same aggressive language.

Too much hope/confidence from market based on leaks about talks happening.

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We were bracing for news we hadn't gotten yet - markets rallied on de-escalation headlines that hadn't actually happened.

Went into address hoping for clarity/answers but didn't get them.
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President's address not enough to ease concerns about Strait of Hormuz traffic bottleneck and supply chain ripple effects.

Energy prices will be higher; fertilizer and other products will eventually impact global agriculture/trade and equities.
French President Macron says reopening Strait through military means unrealistic, must be done in consultation with Iran.

Strategic for energy, fertilizer and international trade; lack of international military support from traditional allies.

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Crude up almost ten bucks for WTI - crude rallying today with vengeance.
Brent at $109, WTI at $97 - $12 spread indicates international impact but more Asia/Europe than US.

US still pretty self-sufficient on energy products.

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Tesla facing delivery challenges - expected sequential decline of 12% but year-over-year growth of 9.6%.

Intensifying competition in Europe/China, expiration of US tax credit weighing on demand; global EV sales lowest in nearly two years.
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Market trying to separate Tesla from delivery narrative but declining deliveries become part of growth story.

Tesla's rise was based on growing deliveries; autonomy/FSD/SpaceX are distractions but deliveries still important.
Tesla March shipments up 8.7% YoY, potentially winning back market share as industry wholesale deliveries flat.

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TD Cowen reducing airline price targets due to skepticism on travel demand resilience given higher energy prices and decelerating credit card data.

Estimates below consensus for six major airlines; view Delta as most defensive, United as most attractive long-term.
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Airline adjustments make sense as stretched timelines weigh on profitability and future pricing.

American Airlines trimmed to $15 from $17; investors would take $15 (almost 50% rally).

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