Rise and shine everyone.

Markets are nervous this morning with Middle East tensions. Israel counter-attacked Iran but, it would seem that escalation has been contained for now. Iran has not announced further retaliation for now, as there was no damage to their nuclear reactor at the central city of Isfahan. It’s still early and there are reports that Israel is debating whether the attack was a strong enough response, given Iran is now calling it a failed attempt.

Markets

Oil shrugged off the spike earlier in the day but commodities continue to remain elevated.

Global Markets opened lower and remained under pressure. US Equity Futures are also trading lower in the pre-market. Today is Options Expiration so some further caution is warranted.

Yields have pulled back marginally, quite likely due to mixed messages coming from Fed speakers. While ECB speakers continue to focus on June as the first cut and are now signaling two back-to-back cuts in the summer.

Netflix

Netflix beat earnings yesterday but, the news that they will stop reporting subscriber numbers from next year wasn’t well received. The stock price fell -6% in the pre-market.

Netflix delivered a double beat with Revenues increasing 14.8% YoY. Global subscriber growth was up beating estimates at +9.33 million additions during the quarter. T

The company provided softer guidance on revenues and net additions due to seasonality and inline guidance for this year but expects an improved operating margin because of FX.

Bitcoin Halving

Finally, today is also Bitcoin halving day. Bitcoin prices recovered overnight, to cross 62k.

“The Bitcoin Halving is when Bitcoin's mining reward is split in half. It takes the blockchain network about four years to open 210,000 more blocks, a standard set by the blockchain's creators to continuously reduce the rate at which the cryptocurrency is introduced. At the halving, the amount of bitcoin available as rewards for miners is cut in half. This makes mining less profitable and slows the production of new bitcoins.”

According to reports, many suggest that the halving has resulted in higher prices but, that could just be market sentiment. When the last halving happened on May 11, 2020, the price rose around 12% in the following week and 659% in the following 12 months.

Quote of the Day

Fed Speakers continue to come out hawkish trying to put pressure on rates to bring down inflation.

WILLIAMS: Rate hike not baseline but possible if data warrants.

BOSTIC: Inflation was still too high, still had a way to go to get to 2%; economy was slowing down, but slowing down slowly; Reiterated sees one rate cut this year

KASHKARI: Could potentially wait until 2025 to cut rates; Need to be patient until we are convinced that inflation is falling.

Chart of the Day

BofA’s Bull & Bear indicator has slipped further and is currently signaling neutral.

BofA’s Flow Show: Bonds & Crypto saw inflows while Gold, Stocks and Cash saw outflows.

Other Stories

• S&P cut Israel's long-term sovereign ratings to A+ from AA-; Outlook negative

• Apple said to remove Whatsapp and Threads from China app store; cites order from the China government related to national security concerns

• BOJ Gov Ueda stated that there was a chance that the weak Yen currency might affect trend inflation and if so it could lead to a policy change

• Before the hostilities, Taiwan Semi reported its fastest quarterly revenue growth since 2022, however, the stock fell nearly -5% during US trading. When Asia opened Tokyo Electron -7% and Advantest -4.0%. Analysts were concerned that among the positive TSM figures was the company forecasting lower chip demand related to some sectors such as autos and smartphones.

• Japan's national CPI for March decelerated more than expected across all prints, including prior month prints.

• Potential trouble with Vietnam as the Central Bank Gov said it was prepared to intervene in FX markets even from today, that it was planning to auction gold bars on Monday, and that it was selling USD to banks today at a rate of VND25,400 v the VND24260 reference rate earlier.

• Mexico’s govt, under pressure from the US, reportedly refused to offer Chinese automakers incentives such as low-cost public land or tax cuts for investment in EV production

Calendars

(news taken from Reuters, FT, Bloomberg; Calendar from Trading Economics)