Daily Brief - Turbulent Tides

TLDR: Amid the serene waters of the Red Sea, a storm is brewing. This strategic maritime corridor, typically a beacon of global trade, now finds itself at the heart of a brewing conflict with far-reaching financial implications.

Shipping costs have skyrocketed due to the conflict, particularly on the Asia-Europe trade route, where container rates have more than tripled as companies reroute vessels to avoid the troubled waters.

As a result, companies dependent on timely deliveries face higher costs and complexities, potentially affecting consumer prices. Retail giants like Ikea are already signaling potential supply chain impacts, indicating a broader effect on consumer markets.

Also crucial for oil transport, the Red Sea's unrest has injected uncertainty into oil supply and prices. Despite Brent crude staying below $80, analysts warn that prolonged diversions could notably sway oil prices, affecting inflation trends.

Moreover, the increased shipping costs, potential for delayed deliveries and rising energy prices could exacerbate inflationary pressures. Oxford Economics estimates that if container transport costs remain elevated, global inflation could rise by approximately 0.6 percentage points.

This is especially significant as central banks worldwide strive to rein in inflation.

Market Movers: If Oil prices rise?

Here are the historically best and worst performing stocks on a 6-month horizon:

Top 3 Performers:

1. Netflix (NFLX): Exceptional 78.58% gain.
2. Chipotle (CMG): Robust 42.98% increase.
3. Ulta Beauty (ULTA): Strong 36.98% growth.

Bottom 3 Performers:

1. Paypal (PYPL): Steep 52.22% decline.
2. EPAM Systems (EPAM): Fell 44.47%.
3. Ceridian HCM Holding Inc (CDAY): Dropped 40.05%.

Earnings Update: Interactive Brokers reports tonight

Interactive Brokers is scheduled to announce an EPS of $1.48 for the quarter, a figure which has been slightly revised downward by 1.3% over the last 30 days.

It's important to note that IBKR stock typically exhibits negative median returns in the subsequent week post results, no matter if estimates are beaten or missed.

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

Asset Spotlight: How low can Boeing go?

Toggle analyzed 16 similar occasions in the past where Boeing stock fell for consecutive days and historically has been followed by median upside in the stock's price over the following 6 months.

However, in March 2019 when BA's RSI crossed below 15 post two crashes of the Max 8 aircraft, the stock continued to fall over the subsequent week.