Market Watches U.S.-Iran Situation; European Stocks Open Mostly Lower, Netflix Down 10% Premarket

The strong rebound momentum of global stock markets over the past three weeks has come to a halt. With the suspense over whether the U.S.-Iran temporary ceasefire agreement can be smoothly extended yet to be resolved, investors have taken the initiative to reduce their positions ahead of the weekend, while the S&P 500 Index is on the verge of a historic milestone of three consecutive weeks of gains exceeding 3%.

During Friday's trading session, S&P 500 Index futures were stable and basically flat. Prior to this, the index had set new all-time highs for two consecutive trading days. As both the U.S. and Iran continued to release signals of de-escalation, the significant volatility pressure previously endured by the energy market has been somewhat alleviated. Combined with the market's optimistic expectations in the field of artificial intelligence and strong corporate earnings performance, the rebound momentum of global stock markets in this round has been particularly prominent.

According to CCTV News, Trump stated publicly on the 16th that the United States has obtained a "highly significant" relevant statement, which will ensure that Iran does not possess nuclear weapons with a validity period of more than 20 years. He also said that "Iran has agreed to almost all relevant requirements" and that the prospect of reaching a peace agreement between the U.S. and Iran "looks very optimistic." Affected by this news, the price of Brent crude oil immediately fell by 0.4% to around $99 per barrel; the U.S. dollar exchange rate fluctuated near the low level since February, and the 10-year U.S. Treasury bond yield was basically flat at 4.31%.

Daniel Murray, Deputy Chief Investment Officer of EFG Asset Management, said: "As the uncertainty in the Middle East gradually fades, the market's focus will return to economic fundamentals, especially the newly launched corporate earnings season. Currently, market expectations for corporate earnings are still relatively optimistic, which is consistent with the basic trend of stable macroeconomic operation."

In terms of the performance of core market varieties, S&P 500 Index futures were basically flat, and Nasdaq 100 futures fluctuated little; Netflix's U.S. stock fell nearly 10% premarket, mainly because although the company's first-quarter performance achieved better-than-expected growth, its subsequent performance guidance was lower than market expectations, and the upcoming departure of the company's chairman triggered market concerns.

European stocks opened mostly lower. Among them, the Euro Stoxx 50 Index fell by 0.19%, the FTSE 100 Index edged down by 0.04%, the CAC 40 Index rose slightly by 0.06%, and the DAX Index fell by 0.06%.

In the foreign exchange market, the U.S. dollar exchange rate continued to hover near the February low, and the Japanese yen exchange rate fell by 0.1% to the 159.37 level.

In the bond market, the 10-year U.S. Treasury bond yield was basically flat, maintaining at 4.31%.

In the energy market, the price of Brent crude oil fell by 0.4% to around $99 per barrel.

In the precious metals market, the gold price was basically flat at $4,781 per ounce; spot silver rose more than 1% intraday, currently trading at $79.20 per ounce.

In the cryptocurrency market, the price of Bitcoin fell by 0.4% to $74,969.26.

Market Takes Initiative to Slow Down After Record Rebound

The rebound momentum of global stock markets in this round is rare in recent years, and the S&P 500 Index is approaching the milestone of three consecutive weeks of gains exceeding 3%. This round of rebound was mainly a rapid recovery triggered by the market after obvious signs of easing in U.S.-Iran tensions.

However, entering Friday's trading session, many global markets fell into a wait-and-see state. European stocks traded sideways, while Asian stock indexes ended their three consecutive trading days of gains. Investors generally chose to take profits and reduce positions ahead of the weekend, waiting for the direction of U.S.-Iran relations to become clearer before deploying.

French engineering manufacturer Alstom SA became one of the main factors dragging down the European market—after the company announced the withdrawal of its current fiscal year financial guidance, its stock price immediately hit the largest single-day drop in more than two years. It is reported that Alstom's withdrawal of financial guidance is mainly affected by factors such as current economic uncertainty and rising raw material prices, making the original financial forecast unsustainable.

Trump Says Iran Concedes, Oil Price Hovers Near $100 Mark

Oil price trends remain one of the core barometers of the current global market. The price of Brent crude oil softened after Trump made remarks related to U.S.-Iran negotiations, currently trading at around $99 per barrel, still hovering near the $100 mark and not completely breaking away from the high range.

Garfield Reynolds, Head of Bloomberg MLIV Asia Team, issued a warning about this. He pointed out that although U.S.-Iran conflicts have shown obvious signs of cooling down, the recovery of material circulation in the Strait of Hormuz is extremely limited. "This means that crude oil futures prices still have the potential to return above $100, and stock markets also have great potential to pull back from this week's highs."

The gold price was basically flat at $4,781 per ounce. Market risk aversion has eased compared with before, but it is still potentially supported by the uncertainty of the U.S.-Iran situation.

Earnings Season Starts, Fundamentals Return to Center Stage

As the Middle East geopolitical premium gradually fades, the focus of the global market is gradually shifting to corporate fundamentals. The current global corporate earnings season has just kicked off, and the trend of corporate earnings data in the next few weeks will become a key variable leading market trends.

Daniel Murray further stated that current market expectations for corporate earnings are still at a high level, which is consistent with the underlying trend of overall stable macroeconomics. In addition, the optimistic sentiment around the field of artificial intelligence continues to ferment, providing strong support for the technology sector, which is also one of the important driving forces for the rebound of global stock markets in this round.

For most investors, the core question at this stage is: if the Middle East geopolitical risk premium continues to fade, can corporate earnings data take over the "baton" of market support, provide effective support for stock market valuations that are already at historical highs, and avoid a market correction?

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