Charlie Wells

Micron's blowout earnings and strong demand outlook directly benefit ASML, a major supplier of semiconductor equipment to Micron. The positive read-across is lifting ASML shares and the broader European tech sector.

SpaceX shares slumped 16% after the company announced a $20 billion investment-grade debt raise, which is unusual for a cash-burning, unprofitable company early in its lifespan. The grandiose mission language used for debt investors is mismatched for debt instruments, raising questions about remaining equity upside. Upcoming IPOs from OpenAI and Anthropic could further dampen demand for SpaceX equity.

Bank stocks, particularly those with strong trading desks like Goldman Sachs and Morgan Stanley, are expected to report solid Q1 earnings boosted by recent market volatility, though uncertainty from geopolitics and private credit redemptions pose headline risks.

Bank stocks, particularly those with strong trading desks like Goldman Sachs and Morgan Stanley, are expected to report solid Q1 earnings boosted by recent market volatility, though uncertainty from geopolitics and private credit redemptions pose headline risks.

The key unanswered macro question is whether the Iran conflict will be inflationary or demand-destructive. If inflationary, it would lead to rate hikes; if demand-destructive, it could lead to cuts. The conflict has already caused damage and supply chain disruptions. Further escalation could lead to significantly higher oil prices (scenarios of $130-$150 are mentioned), which would force this inflationary/demand-destruction decision. WATCH the sector as the source of the core macro catalyst. The direction for energy equities depends on which scenario unfolds, but physical shortages and price spikes are a clear near-term risk. A swift and peaceful resolution that reopens the Strait of Hormuz without further damage.

Morgan Stanley upgraded both BP and Repsol to Overweight, arguing the oil market is unlikely to return to its pre-conflict regime. These two European majors have greater upstream (production) exposure, making their earnings more sensitive to elevated oil prices, which the bank believes will persist. In a higher-for-longer oil price environment driven by geopolitical disruption, these companies are positioned to outperform. A rapid and sustained de-escalation in the Iran conflict leading to a swift reopening of the Strait of Hormuz and a collapse in oil prices.

The speaker reported that oil stocks, the majors, are advancing, with Exxon Mobil up 1.8% and ConocoPhillips up 1.6%. The ongoing conflict in the Middle East has shut the Strait of Hormuz, a critical oil chokepoint, driving up crude oil and fuel prices (Brent ~$102, diesel >$5). Major integrated oil companies are direct beneficiaries of higher hydrocarbon prices, leading to immediate stock price appreciation. A rapid diplomatic resolution that reopens the strait and normalizes oil flows, collapsing the geopolitical risk premium.

The speaker reported that oil stocks, the majors, are advancing, with Exxon Mobil up 1.8% and ConocoPhillips up 1.6%. The ongoing conflict in the Middle East has shut the Strait of Hormuz, a critical oil chokepoint, driving up crude oil and fuel prices (Brent ~$102, diesel >$5). Major integrated oil companies are direct beneficiaries of higher hydrocarbon prices, leading to immediate stock price appreciation. A rapid diplomatic resolution that reopens the strait and normalizes oil flows, collapsing the geopolitical risk premium.

"We've got to talk about defense. This has been such a big story in the news... We know given this environment and the concerns we see a lot of defense companies getting upgrades." A protracted conflict in the Middle East, combined with explicit pressure from the US for European allies to increase their naval presence and military contributions, will drive sustained government budget allocations toward defense contractors. LONG. Rapid de-escalation of the conflict or domestic political gridlock preventing the approval of increased defense budgets.

"We've got to talk about defense. This has been such a big story in the news... We know given this environment and the concerns we see a lot of defense companies getting upgrades." A protracted conflict in the Middle East, combined with explicit pressure from the US for European allies to increase their naval presence and military contributions, will drive sustained government budget allocations toward defense contractors. LONG. Rapid de-escalation of the conflict or domestic political gridlock preventing the approval of increased defense budgets.

"We've got to talk about defense. This has been such a big story in the news... We know given this environment and the concerns we see a lot of defense companies getting upgrades." A protracted conflict in the Middle East, combined with explicit pressure from the US for European allies to increase their naval presence and military contributions, will drive sustained government budget allocations toward defense contractors. LONG. Rapid de-escalation of the conflict or domestic political gridlock preventing the approval of increased defense budgets.