WS #4985

The dominant signal in this window is a strong earnings rotation into financials, with JPMorgan Chase (JPM) and BlackRock (BLK) delivering significant beats, while Wells Fargo (WFC) posted a mixed result with a revenue miss. JPM's Q1 EPS of $5.94 beat estimates by $0.48, with revenue of $50.5B exceeding expectations by $1.59B, driven by investment banking and trading strength. BlackRock reported adjusted EPS of $12.53 vs. $11.48 estimate, fueled by record iShares inflows of $130B. This robust performance from major banks, corroborated by Fed H.8 data showing 7.5% YoY loan growth, supports a bullish rotation into financials, potentially lifting the broader sector (XLF) and indices like SPY. Concurrently, geopolitical tensions show signs of de-escalation: Bloomberg reports emerging-market assets are rallying on Iran war resolution bets, and a Chinese tanker successfully transited the Strait of Hormuz despite the US blockade, challenging its effectiveness and dampening bullish energy pressures. However, counter-signals persist, with the WSJ reporting more than 15 US warships enforcing the blockade, and the IEA warning of the strongest quarterly drop in oil demand since the pandemic if the Strait remains closed, underscoring ongoing tail risks. In tech, Amazon (AMZN) is in advanced talks to acquire satellite operator Globalstar (GSAT), a move to accelerate its Kuiper network against SpaceX, bullish for AMZN and GSAT. Additionally, Germany and Ukraine signed a defense and economic cooperation deal, including digital battlefield tech collaboration, which could benefit European defense and tech sectors.