April 13th Pre-Market

Good Morning

After everything that went down last night I was bracing for a lot worse than this. Nobody in Europe has backed the blockade yet. Oil is above $100 but the Strait is still supposed to be open to non-Iranian traffic. I think this thing has an expiration date.

Let's dig in...

Today's Big Picture

1. The Blockade Has No Allies Yet

The UK said this morning it's not supporting the blockade. France and the UK are hosting a separate conference to reopen the Strait. Germany clarified this is a blockade on Iranian ports, not the Strait itself, meaning non-Iranian shipping should be unaffected. No European or Gulf state has signed on.

2. Both Sides Are Still Posturing 

Dow futures bottomed at negative 580 overnight and have recovered to around 300. Iran's state media says no plans for another round of talks. The WSJ reports the door for diplomacy remains open. Physical crude near $150 a barrel, paper at $104.

3. Goldman Beat Earnings but the War Desk Missed Goldman Sachs 

$GS beat on earnings and revenue this morning.

Goldman's fixed income and commodities trading desk, the one that should be printing money in a war environment with oil above $100, missed expectations by nearly $900 million. Record quarter everywhere else. That desk couldn't capitalize.

Market Overview

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Stock Spotlight (pre-market)

Best Buy $BBY ( ▼ 3.35% )  

Downgraded to sell at Goldman. The call is about what comes after Q1 memory costs are rising and they're going to eat into laptop and PC margins. If you're long this name on the consumer electronics rebound thesis, Goldman just put a clock on it.

Williams-Sonoma $WSM ( ▼ 1.14% )  

Upgraded to buy by Goldman. The bank thinks the selloff overshot and the brand portfolio is best in class retail. This is a valuation call, not a momentum call. It needs a stable consumer to work.

Exxon Mobil $XOM ( ▼ 1.63% )  

Moving with crude. The new detail this morning: Saudi Arabia restored full East-West pipeline capacity to 7 million barrels per day overnight. That's the first supply side positive since the war started. Energy longs need to decide if that caps the upside here or if the blockade outweighs it.

Carnival $CCL ( ▲ 0.47% )  

Down again on fuel costs. Norwegian $NCLH ( 0.0% )  and Royal Caribbean $RCL ( ▲ 0.38% )  lower too. This isn't new, it's the same war trade that's been bleeding cruise lines for weeks. It doesn't reverse until oil does.

Palantir $PLTR ( ▼ 1.86% )  

bouncing after a 13 point selloff last week on AI disruption fears. Shorts are likely covering. I think the selloff was overdone but the AI disruption narrative isn't going away.

SanDisk $SNDK ( ▲ 0.02% )  

joins the Nasdaq-100 on April 20. Passive funds have to add the name before then.

What to Watch

The 10 AM Window 
Blockade enforcement starts at 10 AM ET. Iran's Revolutionary Guard already said any military approach is a ceasefire violation. If noon passes without incident, dip buyers show up.

Trump's China Tariff Threat 
Trump threatened 50 additional on China if Beijing supplies defense equipment to Iran. He's tying the trade war to the shooting war. If China responds today, you have two fronts to price.

Have a good day 🙂

- John

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