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Crude oil prices declined and stocks rallied on Tuesday after Iran’s official news agency said the Islamic Republic is ready to end hostilities, subject to certain conditions. With markets appearing to absorb the initial impact of an energy shock, the main U.S. equity indexes all rose at least 2.5%. And the biggest theme for stocks before the war remains a major upside catalyst.
President Masoud Pezeshkian told EU Council President Antonio Costa that Iran has “the necessary will to end this war” but requires “essential guarantees to prevent the recurrence of aggression,” according to the Islamic Republic News Agency.
Pezeshkian seeks a complete halt to U.S. and Israeli attacks on Iran, the end of the war on all fronts, pledges against future attacks and payment of war damages and reparations as well as international recognition of Iran’s sovereign right to exercise authority over the Strait of Hormuz.
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The front-month West Texas Intermediate crude futures was up as much as 3.9% on Tuesday but immediately reversed course on the IRNA report and closed down 1% at $101.89. WTI is still up more than 50% since the war started and closed the first quarter with a gain of more than 77%.
By the closing bell, the blue-chip Dow Jones Industrial Average had added 2.5% at 46.341, but the index was down 3.6% for the first quarter. The broad-based S&P 500 was up 2.9% to 6,528, narrowing its first-quarter loss to 4.6%. The tech-heavy Nasdaq Composite had rallied 3.8% to 21,590, closing out a 7.1% decline for the first three months of the year.
CoreWeave gets an $8.5 billion AI loan
CoreWeave (CRWV, +12.0%) bounced on Tuesday after the cloud computing platform provider said it finalized an $8.5 billion loan facility to help fund its build-out of more infrastructure to support the AI boom.
According to CoreWeave, the loan represents the first investment-grade rated financing secured by high-performance computing infrastructure and a customer contract. The customer at the other end of the master service agreement (MSA) here is Meta Platforms (META, +6.7%). Moody’s deemed the loan worthy of an A3 rating.
“The A3 rating reflects the Borrower’s highly predictable revenue profile, underpinned by a long term, fixed payment take or pay MSA with Meta,” Moody’s writes. “Robust structural protections support the A3 rating as they ensure the project either continues to operate or lenders can access their collateral if needed.”
Buffett’s love letter to Apple on its 50th birthday
“I sold it too soon. But I bought it even sooner, so…,” the Oracle of Omaha said about Apple (AAPL, +2.9%), still the biggest of Warren Buffett stocks, in an interview on CNBC. “I’m very happy to have it be our largest holding. I was not happy to have it be as large as almost everything else combined.”
Indeed, Buffett would buy “a lot of it,” but not at these levels. The chairman of Berkshire Hathaway (BRK.B, +0.9%) also said he’ll host a charity lunch for the first time since 2022.
Meanwhile, as Wedbush analyst Dan Ives observes, Apple will celebrate the 50th anniversary of its founding on April 1, “marking one of the most transformative tech companies in history.” Ives reiterated his Outperform (Buy) rating and his $350 12-month target price for AAPL stock.
“The company has influenced the build out of multiple industries,” the analyst explains, citing computers and the Macintosh in 1984, music with the iPod in 2001, phones with the iPhone in 2007 and watches with the Apple Watch in 2015, “breaking multiple barriers with how different industries operated.”
It’s what comes next that’s on the market’s mind, though: “Apple will be hosting WWDC in early June with all investors focused on the company’s AI advancements across its portfolio including the much-anticipated launch of Siri AI.”
There’s “confidence,” and then there’s “confidence”
The Conference Board’s Consumer Confidence Index rose to 91.8 in March from 91.0 in February, as survey respondents’ improved outlook on current conditions outweighed their slightly more pessimistic future expectations.
Results of this survey provide interesting contrasts and comparisons with University of Michigan data released on Friday that showed sentiment down in March due to “escalating gas prices and volatile financial markets in the wake of the Iran conflict.”
Three of five components firmed in the March Conference Board survey, and it was better at the headline level. “Nonetheless,” Conference Board Chief Economist Dana Peterson said, “the Index has been on a general downward trend since 2021.”
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As William Blair economist Richard de Chazal notes, “In line with views that the oil supply shock will only exacerbate inflation pressures that were already moderately reaccelerating even before the war, a greater share of consumers this month expected both interest rates and inflation to persist at higher levels.”
At the same time, the differential between consumers who say jobs are hard to get and those who say jobs are plentiful “was only marginally lower and still consistent with an increase in March nonfarm payrolls.” That report, the final highlight on this week’s economic calendar, will be released on Friday.
“From the Fed’s perspective,” de Chazal concludes, “this report supports its decision to hold rates steady and to prioritize inflation over addressing labor market conditions.”
