Escalating geopolitical tensions in the Middle East are creating significant supply shocks within the global aluminum market, propelling futures to multi-year highs. Alcoa, navigating these disruptions, delivered on Q1 expectations and projects a stronger Q2 driven by re-routed supply chain orders.
Our analysis indicates a bifurcated outlook for crude oil prices and a stabilization of U.S. Treasury yields below 4.4%. Equity markets are projected to achieve a higher year-end close, primarily driven by robust corporate earnings performance.
The market remains in a significant corrective phase, with recent relief rallies deemed unsustainable amidst a breakout in 10-year Treasury yields and robust crude oil performance. Investors are advised to maintain a cautious stance, awaiting definitive signals of a market bottom before increasing long exposure.
