Author: Deep Tide TechFlow

U.S. Stocks: Approaching Historical Highs, Nasdaq Rises for Ten Consecutive Days

On Tuesday, Wall Street surged again amid a convergence of three good news: expectations for a second round of talks, better than expected PPI data, and strong bank earnings.

The S&P 500 rose 1.1-1.2%, nearing the historical high set at the end of January, just a step away from a new record. The Nasdaq surged 1.8%, marking the tenth consecutive trading day of gains, the longest winning streak since 2021. The Dow Jones rose 285 points (+0.6%). All three major indices are now positive for the year.

From the wartime low on March 30, the S&P 500 has rebounded over 10% in less than three weeks. The largest drop of 7% during the war has been completely recovered, and it is now breaking upward.

The most important economic data of the day was the March PPI (Producer Price Index), which came in significantly better than expected. Overall PPI rose 0.5% month-on-month, well below the market expectation of 1.1%. The core PPI, excluding food and energy, rose only 0.1%, also far below the expected 0.5%.

The significance of this set of data is that the war has indeed pushed up energy prices (gasoline prices soared 15.7% month-on-month, with diesel, jet fuel, and heating oil also rising), but the price pressures outside of energy are not as severe as the market fears. This provides a crucial narrative pivot for the market, suggesting that inflationary shocks may primarily be confined to the energy sector, rather than spreading throughout the economy. If oil prices continue to decline due to negotiations, the “second transmission” of inflation could be curtailed.

Regarding bank earnings, Citigroup's first-quarter performance exceeded expectations, rising over 1% in pre-market trading. Goldman Sachs reported the second-highest quarterly profit in history, but the "buy the rumor, sell the news" effect caused it to drop 1.9% on Monday. Earnings reports from JPMorgan and Morgan Stanley will be released this week. According to FactSet data, the expected earnings growth rate for the S&P 500 in the first quarter is 12.6%, which would mark the sixth consecutive quarter of double-digit growth if realized.

Tech stocks continue to lead the pack. After surging 13% the previous day, Oracle continued to rise 5%, and Nvidia and Palantir also extended their gains. Goldman Sachs strategist Peter Oppenheimer noted that the valuation premium of mega tech stocks has fallen to levels close to that of the overall market, indicating that tech stocks are transitioning from "unreasonably expensive" to "reasonably valued."

Citadel CEO Ken Griffin gave a sobering judgment at the Semafor World Economic Summit on Tuesday: "If the Strait remains closed for six to twelve months, the world will fall into recession, there is no way to avoid it." However, he also added that if the U.S. waits to act until Iran's military capabilities strengthen, the consequences will be worse.

Goldman Sachs pointed out an overlooked fact in a client report: since the war began, six out of ten G10 economies now expect to raise interest rates by 2026, while only three expected to do so before the war. This war has not only changed the geopolitical landscape of the Middle East, but also altered the direction of global monetary policy.

Oil Prices: Plummeting 8% Back Below $100, The Power of Second Round Talks

Oil prices plummeted nearly 8% on Tuesday, with WTI falling back below $100 per barrel.

The driving force is the expectation of a new round of talks. Although the negotiations in Islamabad broke down over the weekend, Trump said on Monday, "The other side called," and the markets began pricing in the possibility of a second round of negotiations. The "final offer" left by Vance also provided a way out for Iran, with Iranian Foreign Minister Amir-Abdollahian saying the two sides are "just one step away from signing a memorandum of understanding."

Reuters reported that the second round of talks could take place as early as this week. If confirmed, the market will interpret this as Iran seriously considering Vance's "final offer."

However, oil prices have dropped from $104 over the weekend to around $90; despite the large drop, it remains more than 1.5 times above the pre-war level ($61). Macquarie strategist Thierry Wizman's historical analysis is noteworthy: "Historically, it is rare for both sides in conflict to reach an agreement when negotiating from completely opposed positions. Given the enormous gap between the core demands of the U.S. and Iran, it is hard to foresee the Strait reopening within this user period."

The ceasefire expires on April 22. If there has not been substantial progress before then, oil prices will face another round of extreme volatility.

Gold: $4,800, Boosted by PPI Positive and Dollar Weakening

Gold prices rose to around $4,798 per ounce, increasing by 0.65%.

The PPI being significantly below expectations → a cooling of inflation expectations → a slight increase in the possibility of interest rate cuts → lower expected real interest rates → positive for gold. Meanwhile, the dollar continued to weaken amid a resurgence of risk appetite, which also supported gold prices. The yield on 10-year U.S. Treasury bonds fell to 4.297%.

Gold prices are testing the key resistance zone of $4,800-$4,850. If they can stabilize above this range in the next few trading days, the next target will be $4,980 (the 0.618 retracement of March's drop), followed by the key level of $5,000.

However, Goldman’s global strategy report provides a sobering perspective: six G10 economies are expected to raise interest rates this year, and the global interest rate center is moving higher. This limits the upside potential for gold gained through the "interest rate cut narrative." For gold to return to above $5,000, more than just gentle signals from the Federal Reserve are needed; a cooling of global rate hike expectations is also required, which necessitates a further significant decline in oil prices.

Cryptocurrency: BTC Breaks $74,000, Strongest Performance Since the War

Bitcoin surged about 4.6% on Tuesday to over $74,300, reaching the highest price since the outbreak of the war.

This is a milestone-breaking surge. The dense short-selling zone between $72,200 and $73,500 (according to CoinDesk data, about $6 billion in leveraged short positions were gathered here) was forcefully broken, triggering a new round of short-squeeze. Since the ceasefire before April 7 at $66,000, BTC has rebounded over 12% in 8 trading days.

The driving factors are very clear: PPI significantly below expectations → controllable inflation outside of energy → slight increase in interest rate cut expectations → return of the liquidity easing narrative → strong performance in risk assets across the board → BTC benefiting. The simultaneous rise of the Nasdaq for ten consecutive days and BTC further proves that Bitcoin's current trading identity is "high Beta tech asset," maintaining a correlation with the Nasdaq above 85%.

The $74,000 level is significant. If BTC can stabilize at this level, the technical chart will form an ascending channel from $65,000 to $75,000, with the next target looking towards $80,000. Previous forecasts by CoinDesk analysts are being realized: "If oil prices continue to decline by 15-16%, Bitcoin could challenge $80,000." Oil prices just dropped about 8% today.

The broader narrative framework consists of: Ceasefire expiry on April 22, the CLARITY Act roundtable on April 16, and the FOMC meeting on April 28-29. If substantial progress in the second round of talks leads to a ceasefire extension → oil prices further decline → inflation data improve in May → expectations for interest rate cuts by the Fed return to the table, BTC touching between $80,000 and $90,000 in the first half of this year will no longer be a fantasy.

But the opposite is equally clear. If the talks break down again, and war resumes after the ceasefire expires, with oil prices returning above $110, BTC is likely to test $65,000 or even $60,000.

Today's Summary: The Market is Betting on a Better Outcome

On April 15, Tax Day, Wall Street did not sell to pay taxes, but instead made significant purchases:

U.S. Stocks: S&P rose 1.2% nearing historical highs. Nasdaq's ten consecutive days set a new record since 2021. All three major indices are positive for the year. PPI significantly below expectations alleviated inflation fears.

Oil Prices: WTI plunged 8% back below $100. Expectations for a second round of talks + PPI easing inflation concerns = double bearish factors for oil prices.

Gold: Rose to $4,798, testing the $4,800-$4,850 resistance zone. PPI positivity and dollar weakening provide dual support.

Cryptocurrency: BTC broke $74,000 to set a new high since the war. $6 billion in dense short positions were broken, launching a short squeeze.

One figure says it all: The Nasdaq has rebounded nearly 15% from the wartime low to today’s end of ten consecutive days.

Citadel's Griffin said, "The world will fall into recession if the Strait is closed for six months." Goldman said six developed economies worldwide will raise interest rates. Macquarie said, "Historically, such negotiations are hard to resolve quickly."

But the S&P 500 says: I am about to set a new high.

The market is betting on a better outcome. Betting that oil prices will fall, betting that talks will resume, betting inflation will ease, betting that the Federal Reserve will eventually cut rates. These bets are placed in every bullish candlestick, in every buy order.

The answers for next week depend on three things: Whether the second round of talks takes place, whether the ceasefire can be extended before April 22, and whether the 800 vessels in the Strait can finally start moving.

The Nasdaq has risen for ten days straight. What comes next is either the eleventh day or a liquidation day.