• Brent crude oil surged 4.63% (+4.71), reflecting ongoing tensions in the Middle East and contributing to inflation fears. • Microsoft shares dropped 3.97% as the company announced substantial layoffs, marking its worst session since early February. • The liquidity regime signal improved to +3.212, indicating expanding conditions despite mixed signals in economic growth data. --- **Recommendations** • Accumulate energy stocks focusing on companies like ExxonMobil and Chevron, as rising oil prices might enhance profitability. • Consider adding to defensive sectors, particularly utilities, given their performance amid technology sector weakness. • Watch upcoming earnings from Amazon on April 24, as sentiment surrounding mega-cap tech could impact broader market direction. --- Today's market activity reflected a complex interplay of rising energy prices and weakness in the technology sector dominated by significant corporate news. Brent crude oil skyrocketed 4.63% to $106.49, driven by concerns over the ongoing Iran conflict and its potential impact on global supply chains, as reported by Reuters. This surge in oil prices contributed to a renewed focus on inflation, particularly as many market participants seek to assess the ramifications for growth and monetary policy. The economic calendar showed a mix of US labor market data and manufacturing PMIs. Initial jobless claims rose to 214,000, up 3.38% from the previous week, exceeding forecasts and suggesting potential fragility in the labor market. The Flash Manufacturing PMI printed at 52.5, slightly above expectations, but the Flash Services PMI fell to 50.5, below the forecast, indicating softer services sector growth. Market reactions were muted, reflecting a cautious approach towards interpretation of these mixed signals in light of previous high inflation readings. US Treasury yields saw minor increases, with the 30-year yield rising to 4.90%, reflecting slight upward pressure from inflation expectations. The yield curve stayed relatively flat, suggesting ongoing uncertainty in growth prospects. Notably, the corporate bond market saw a reduction in high-yield and investment-grade spreads as Moody's AAA corporate yield fell 2 bp to 5.38%, aligning with improved risk sentiment in lower credit quality segments. In equity markets, despite the Wilshire 5000 index rising 0.95%, the heavyweights of the tech sector faced notable declines. Microsoft led the way down, falling 3.97% as the company announced layoffs affecting 10% of its workforce. This shift added to broader investor anxieties regarding tech valuations amid ongoing cost-cutting measures, with other companies like Tesla also experiencing declines. Overall, the S&P 500 and Nasdaq Composite closed lower, reflecting underlying pessimism about economic growth prospects. Foreign exchange markets showed the US dollar index increasing slightly by 0.21% to 98.82, supportive of ongoing risk-off sentiment. Commodities diverged significantly, with precious metals like palladium and platinum losing ground, dropping -5.54% and -3.35%, respectively. This decrease reflects a broader risk-off tilt as market participants reassess inflation expectations and growth projections amid rising energy prices. Our liquidity regime signal, now at +3.212, suggests improving macro liquidity conditions supported by tighter credit spreads and rising inflation expectations. This improvement could bolster risk-taking in certain asset classes. However, the positive momentum appears to be accelerating, contrasting with some economic data suggesting a potential slowdown. In terms of outlook, investors should closely monitor upcoming earnings, particularly from tech firms like Amazon on April 24, as this may serve as a barometer for market sentiment regarding the sector's recovery trajectory. Additionally, ongoing geopolitical tensions will likely continue to impact oil prices, thereby influencing inflationary pressures and central bank responses. Hence, the tone remains cautiously risk-on balanced against headwinds from energy price volatility and tech sector revaluations.