Welcome back,

The second quarter kicked off today with oil at center stage.

Let’s keep it concise.

Market Headlines 👀

• BofA’s (BAC) Sell Side Indicator shows sentiment is worse than Financial Crisis lows.

• Tesla (TSLA) deliveries rise to record after slashing prices on EVs.

• Bed Bath & Beyond (BBBY) begins three-week countdown to possible bankruptcy.

• McDonald’s (MCD) temporarily shuts US offices, prepares layoff notices.

• OPEC+ makes surprise 1 million-barrel cut.

• US ISM Manufacturing PMI for March comes in at 46.3 (exp. 47.5; prev. 47.7).

• WWE (WWE) shares slide after $9.3B deal with Endeavor’s (EDR) UFC.

• Ovintiv (OVV) to buy EnCap Permian oil and gas assets for $4.3B.

• Extra Space Storage (EXR) to combine with Life Storage (LSI) in $12.7B deal.

• Rivian (RIVN) stands by EV output goal despite production slowdown.

• SoFi (SOFI) acquires Wyndham Capital Mortgage, a leading fintech mortgage lender.

• Banks brave junk debt jitters with $3.8B Citrix (CTX) bond sale.

• UBS (UBS) to slash staff up to 30%.

• Apple (AAPL) is two months away from debuting its first reality headset.

• Apellis (APLS), a US biotech firm, is said to have attracted takeover interest.

• Cineworld (CINE.L) to raise $2.26B as part of restructuring plan.

• HSBC’s (HSBC) top executives face HK shareholders amid spinoff pressure.

• Credit Suisse (CS) takeover probe opened by Swiss prosecutor.

Earnings 💸

No notable earnings for today! Tune back in tomorrow for Acuity Brands (AYI).

S&P 500 Heap Map

Recap Around the Street 🧠

Oil prices are on track for their biggest jump in nearly a year after Saudi Arabia and other leading members of OPEC said they would cut production by more than 1 million barrels of daily output starting next month. It marks a surprise move that stands to boost gasoline bills and inflation in the West.

Markets were quick to react:

• Oil prices were on track for their largest single-day jump since April 12. Most-actively traded futures for Brent crude rose 6.2% to $84.82 a barrel.

• Equivalent contracts for WTI, the U.S. marker, rose 6.1% to $80.39 a barrel.

• Gasoline futures in New York rose 3.9% to nearly $2.79 a gallon.

• Exxon Mobil (XOM) shares jumped 3.9% before the bell. BP and Shell were up around 4.5% to 5% in London trading.

The jump extends a spell of volatility for oil prices. It also adds another complication for central bankers, who are trying to gauge the direction of the economy and inflation.

Tesla (TSLA) was only able to achieve a marginal increase in vehicle deliveries, despite reducing prices on its entire range of vehicles. It now raises questions about the sustainability of the demand growth that Elon Musk had predicted earlier this year.

In the first quarter of 2023, the EV maker supplied 422,875 cars to its customers. That represents a modest 4% increase from the previous quarter.

Although there was a more significant increase in deliveries compared to the same period last year, it should be noted that Tesla has been ramping up production at two new plants located in Berlin and Austin.

Market Preview 🎞️

• Tuesday, April 4: Factory, durable goods and capital goods orders; JOLTS job openings; Cleveland Fed’s Mester and Cook speak

• Tuesday earnings: Acuity Brands (AYI)

• Wednesday, April 5: MBA mortgage applications; ADP employment change; trade balance; S&P Global US services PMI; ISM services index

• Wednesday earnings: Simply Good Foods (SMPL)

• Thursday, April 6: Weekly jobless claims; Challenger job cuts; St. Louis Fed’s Bullard speaks

• Thursday earnings: Constellation Brands (STZ)

• Friday, April 7: US monthly jobs report

That’s all for today, folks! We’ll be back around the same time tomorrow with a curated list of important news, economic data and market highlights. 

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