Situation Awareness
Situation Awareness: Cautious. Markets are grappling with rising geopolitical tensions and mixed futures signals following a robust earnings season. Trade mode: selective and defensive. Escalating tensions between the U.S. and Iran, evidenced by rising oil prices and conflicting reports, are triggering concerns despite positive earnings momentum. Regime context — 70.12% of stocks trade above their 40-day SMA, and the 4% Bull/Bear gauge shows 0 bulls vs. 0 bears. The 5-day trend lacks definitive data, therefore direction is indeterminate.
SIP: BRK.B COIN EBAY NCLH
- What’s working: Earnings beats and acquisition news driving individual stock gains, but broader market signals are mixed. Reversal signals are showing up today, indicating that we may be near a key inflection point.
- Leading sectors: Financials at 2.39, Technology at 2.04 and Industrials at 1.5; leading themes: Data unavailable.
- Key event: US-Iran tension impacting oil prices and market sentiment.
- Market read: Positive earnings reactions are being tempered by macro and geopolitical worries, warranting careful navigation.
- DEP watchlist: AUR, EWY, GOOG
- SIPS: CYH, KREF, RIG
Today’s Market Narrative
Equity futures indicate a mixed open following a winning week, where the S&P 500 and Nasdaq Composite repeatedly reached record highs. S&P futures are below fair value at -4.00, while Nasdaq futures are above fair value at +36.00, according to Briefing.com. Last week’s market buoyancy stemmed from impressive mega-cap earnings, despite oil price volatility. This morning, geopolitical risks are resurfacing, particularly escalating U.S.-Iran tensions. Crude oil is up $2.04 (+2.0%) at $103.98 per barrel, reflecting these anxieties. Asian markets closed higher overall, while European markets are trading in the red this morning.
Earnings continue to influence individual stocks. Berkshire Hathaway (BRK.B) is up modestly in premarket trading, +0.4% at $375.06, after a Q1 earnings and revenue beat. Conversely, Norwegian Cruise Line Holdings (NCLH),currently at $17.62, is down -6.3% after beating EPS estimates but missing revenue and issuing weak guidance. GameStop’s (GME), currently at $25.85, acquisition proposal to acquire eBay (EBAY) at $125 per share in cash and stock is sending EBAY higher in premarket, up +7.8% to $112.05. Cryptocurrency-related stocks, such as Coinbase (COIN), also higher, up +3.7% to $198.30, buoyed by bipartisan agreement on crypto regulation.
The market largely benefited from impressive earnings growth, with the S&P 500 Q1 earnings growth reported at 27.2%, signaling a broadening of earnings contributions beyond technology. This has allowed the market to rally in the face of rising oil prices and the uncertainty of the Iran War. News that Iran has responded to U.S. amendments on an agreement to end the war had lifted equity futures, along with Apple (AAPL) trading 3.5% higher in pre-market action on Friday following its impressive earnings report. However, some exhaustion of these gains was felt with Sandisk (SNDK) and Western Digital (WDC) declining after blowout quarterly results.
Today’s focus will likely remain on geopolitical developments and how they impact energy prices and overall risk sentiment. Investors will also be watching for reactions to corporate news and any significant sector rotation. Earnings are not expected to be front and center the way they were last week, however the market will always respond to news from individual companies.
Macro & Policy
U.S. Treasuries are expected to open lower this morning, diminishing recent gains. Overnight, treasury futures initially opened positively on Sunday evening before trending lower. Concurrently, crude oil opened below $100/bbl but then rose, approaching $108/bbl in response to Iran-related headlines. President Trump’s announcement to guide ships through the Strait of Hormuz contrasts with Iran’s warning against approaching the strait, further contributing to geopolitical tensions. Overnight economic data indicated better-than-expected Manufacturing PMI readings across major economies.
The 10-year Treasury yield is at 4.404%, a slight increase from the past couple of days. The U.S. Dollar Index is up 0.2% at 98.38. A senior Bank of Korea policymaker suggested considering a rate hike, and Japan’s Prime Minister pledged increased defense cooperation with Australia. ECB forecasters raised the 2026 harmonized inflation forecast for the EU to 2.2% from 1.8%, while growth outlook was reduced to 1.0% from 1.2%. ECB policymakers also cautioned war impacts haven’t been fully reflected in economic data and second-round inflation effects should be addressed quickly. Overall, the overnight bond market activity reflects concerns around geopolitical events.
Economic Calendar Today
- 10:00 ET: March Factory Orders — Expected: 0.5% | Prior: 0.0% — Provides insight into manufacturing demand and economic activity.
- 14:00 ET: Senior Loan Officer Opinion Survey from the New York Fed — Influences lending conditions and credit availability.
- 15:00 ET: Quarterly Refunding Financing Estimates from the Treasury — Impacts bond supply and yields.
Earnings & Corporate News
Berkshire Hathaway (BRK.B) is trading higher after beating earnings expectations. GameStop (GME) proposed to buy eBay, which is pushing EBAY higher by +7.8% to $112.05 in premarket. Other corporate news includes Exxon considering increased investment in Venezuela. The most negative reaction is seen with Norwegian Cruise Line Holdings, which fell after missing revenue expectations and lowering FY26 EPS guidance. NCLH beat EPS expectations by $0.09 but guided Q2 and FY26 EPS below consensus.
Western Digital (WDC) showed a very strong quarter and demonstrated the powerful tailwinds behind high-capacity HDDs as AI workloads continue to scale. WDC’s UltraSMR adoption is expanding, with three of WDC’s largest customers now using the ePMR and HAMR compatible technology. WDC expects all major customers to be qualified by the end of CY27. Reddit delivered a strong Q1, with results comfortably surpassing expectations on both the top and bottom line, driven by robust advertising demand, accelerating monetization, and growing relevance in the AI ecosystem.
WaveFinder Signal Summary
The scan environment reflects overall market caution. Continuation scans are somewhat rich with 114 signals, indicating some level of bullish continuation opportunities, while D9M scans are seeing 122 signals, offering a slightly stronger signal for potential dip-buying opportunities. However, with 0 bulls vs. 0 bears on the 4% Bull/Bear gauge, it is hard to tell which direction will prevail. Sector Volatility ATR data indicates heightened volatility in Financials +2.39 and Technology 2.04, with relatively lower values in sectors such as Consumer Staples and Utilities.
Top setups worth watching include breakout opportunity in CYH, given its 2LYNCH signal alongside growing tension in Energy sector represented by RIG, but traders should be aware of the higher levels of volatility in those particular sectors. The number of stocks above their 40-day SMA has increased slightly, from 69.62% to 70.12% on the 40 SMA. However, the 20 SMA shows a decrease from 58% to 38% indicating some level of negative momentum.
Today’s Watchlist
- BRK.B — Earnings beat, monitoring for sustained upward momentum.
- COIN — Crypto regulation agreement, potential upside if momentum continues.
- EBAY — Acquisition proposal, looking for further gains on deal news.
- CYH — 2LYNCH setup, breakout watch.
- AUR — D9M setup in the auto sector (strong bounce candidate).
- RIG — Responding to Mideast conflict volatility, watching for breakout.
Action Codes of the Day
CRT Controlled Risk Taking — With escalating geopolitical tensions, it is prudent to manage exposures selectively and defensively.
BTFD Buy The Dip — Earnings growth remains strong, so buying pullbacks on fundamentally sound names could be advantageous.