WS #11136

The dominant narrative remains the de-escalation of the Iran-US conflict and its impact on oil markets, which is now shifting from supply-crisis to potential-glut fears. Goldman Sachs states the global oil market is set to swing back into oversupply as Strait of Hormuz traffic recovers, and Vice President JD Vance confirms oil traffic through the Strait has reached pre-war levels. Iran has exported 50 million barrels since the blockade was lifted, and Nayara Energy cut petrol prices by ₹5/litre in India, reflecting lower global crude. This oil-price collapse is a powerful counter-signal to the earlier war-driven bullish energy thesis, directly bullish for consumer-discretionary, airlines, and transport stocks while bearish for energy producers. Separately, the US lifted export restrictions on Anthropic's Fable 5 and Mythos 5 AI models, a high-signal development for AI/tech stocks, corroborated by Bloomberg, Al Jazeera, and multiple GDELT sources. Microsoft is reportedly planning layoffs of ~2.5% of its workforce, a counter-signal to the hiring boom narrative. The AI theme remains dominant but with mixed signals. The overall narrative arc is STABLE for the tech/AI rally, but DE-ESCALATING for the oil/energy crisis. China's Xi Jinping made multiple hawkish statements on Taiwan and military strength, but these are largely rhetorical and not yet actionable for markets. The yen hit a fresh 40-year low against the dollar, keeping traders alert for possible FX intervention. Nike reported Q4 earnings that beat estimates, boosted by a tariff refund, but China revenue fell 12%, and the company expects flat earnings in H1 FY2027.