Global finances are in a tizzy, while stocks generally remain firm. Even the brief pullback by big-techs didn't derail the Oil-led scramble to a higher S&P. Besides Oil, selected AI stocks were really at the helm of significant upside.

Freepik

Days ago we saw Brazil cut a currency trading deal with China, and some feel that's a retort by Brasilia for what they perceive as poor U.S. treatment. That's a topic for elsewhere, but it won't make much of a dent, nor give BRIC control or any (mostly embraced by big bears) Dollar-reserve-ending major leverage.

We also have a significant realignment continuing in the Middle East, of which the rising Oil price is the most obvious manifestation (that the Saudi's pan-off on Biden's non-adherence to price supports, but that may be just convenient, although some truth to it). I put more emphasis geopolitically on rising drone or aircraft penetrations in Syria, and Iraqi fraternization again with Iran, plus of course the Iranian (or proxy) attacks on the U.S.-supported Kurds.

A meeting between Egypt's President al-Sisi and (controversial) Saudi Crown Prince Mohammed bin Salman isn't widely reported. It comes as Egypt faces a deepening economic crisis and the region witnesses major alliance changes that might even relate to Saudi's deal to build a Chinese petrochemical plant. I suggest heads-up about tensions, as forging ties that might be irreparable if we even want to play-ball with this kind of relationship (perhaps little choice).

More significant of course was the weekend OPEC+ production-cut decision, with implications for the Fed, for inflation and brings back $100/bbl Oil chatter. Well, we were bullish on Oil very recently suggesting the upper 60's/bbl was a low point, and view as quizzical the White House saying they weren't buying.

I presumed Washington was the buyer for the Strategic Petroleum Reserve as President Biden had essentially said so (price support influence). Presumably the Saudi's (disdain them to a degree as I do) agreed about U.S. intentions as not only did POTUS say so publicly, but then now denies any plan to do so. It isn't necessary to say it, because Riyadh simply quietly arrange a production cutback with other OPEC members, so hence a million/bbl per day reduction.

Of that 500,000/day comes from Saudi Arabia, and a similar aggregate slice by the others. This makes it harder to grow some economies, dislocation for the most part 'other than' in the USA, but it doesn't help the inflation fight and probably means the Fed stops hiking rates, but they stay fairly high for longer.

The tech rally was textbook, and doesn't have much overhead potential for a while, even though seasonals can keep this going temporarily. This is different for next-generation (and leading edge current) capital equipment needs, such as AEHR provides in the testing realm for Silicon Carbide. Since it's now in a 'trading modality' while retaining core holdings, we were optimistic once again to buy the washout dip (following the CFO's retirement announcement), which should not be an overall inhibitor given they are in the Bay Area (lots of CFO's with semiconductor experience should be available with the right arrangement of course). We also thought tripping stops just under 30 would be a washout.

It was a washout and turnaround and yes we played it, plus suspect new deal and sales between now and Fiscal Year-end next month will at least challenge the recent highs (upper 30's/40 area) or even higher. For investors not trading we simply view AEHR as a strong hold. One Semiconductor analyst slammed it early Monday, which I thought was a 'hit-piece' against the stock, and I even posted a response since that analyst's contentions were incorrect in my view.

In-sum: 

banking scandals, inflation, currency worries and higher Oil induced by a 'frienemy'.. all contribute to the confusion which got lots of folks short and as forewarned, had them run-in approaching Quarter's end. Ensuing action in the start of April is actually encouraging, as allowed-consolidation is minimal in big-tech, while selected small-caps (especially Ai) are taking off once again.

With a trading hiatus on Good Friday, there's trading momentum compressed a bit this week, and in a constructive way. It's still in limited sectors however.

More By This Author:

Market Briefing For Monday, Apr. 3
Market Briefing For Thursday, Mar. 30
Market Briefing For Wednesday, Mar. 29