Daily Brief - Fueling the Flames

TLDR: Oil markets are currently experiencing a mix of upward momentum and geopolitical unease, presenting a complex landscape for investors.

As of recent reports, crude oil futures have shown signs of tightening, with both West Texas Intermediate (WTI) and Brent Crude witnessing gains. The WTI contract for April rose by 0.9% to $78.61 a barrel, while the Brent contract for the same month increased by 0.77% to $83.67 a barrel.

The backdrop to these fluctuations is a tapestry of factors including winter storms in North America affecting production, rising oil demand from India, and OPEC+ production cuts.

Furthermore, geopolitical tensions in the Middle East add another layer of complexity, with the ongoing conflict and potential disruptions in crude supplies prompting market vigilance.

The immediate versus later delivery price premium suggests a tightening market. With a modestly positive outlook, the expectation is for the oil market to remain slightly undersupplied throughout the year. However, the U.S. has seen an increase in commercial crude stockpiles, indicating a potential easing on the supply side.

Market watchers are also keeping a close eye on the Middle East. Efforts towards a cease-fire in Gaza and the implications for regional stability are in focus. Any progress could alleviate concerns over supply disruptions, though the situation remains fluid and uncertain.

Market Movers: When WTI rises?

Here are the best and worst performing sectors when WTI rises but remains under $80/barrel:

Top 3 Performing Sectors:

1. Information Technology: 2.13% average return
2. Financials: 1.12% average return
3. Communication Services: 1.02% average return

Bottom 3 Performing Sectors:

1. Energy: -0.28% average return
2. Real Estate: 0.39% average return
3. Utilities: 0.61% average return

Earnings Update: Li Auto reports on Monday

Li Auto is set to report its next quarterly earnings on Monday, February 26th, 2024. The consensus among analysts suggests an expected Earnings Per Share (EPS) of $0.91 for the current year and a forecast of $1.67 EPS for the next year.

The company's earnings history shows a pattern of beating or meeting expectations in recent quarters, indicating a potentially positive outlook for the upcoming report.

Discover how other companies could react post earnings with the help of TOGGLE's WhatIF Earnings tool.

Asset Spotlight: Will Boeing recover?

In the 6 past occurrences when Boeing price dropped, analysis from Toggle indicated a pattern of a median upward movement in the stock's price over the next 6 months.

Wall Street analysts have expressed a range of views, with some maintaining a positive outlook on Boeing despite the recent incident. The sentiment is that while the 737 MAX 9 accident is not helpful, it does not fundamentally change the investment thesis for Boeing.