..... . VALI disclosures . .....: 21/05/26, Oil Prices Rise

Tuesday, April 21, 2026

21/05/26, Oil Prices Rise

Oil prices rose on Monday, driven by escalating tensions between the United States and Iran, although the increase was less pronounced compared to earlier in the conflict.

Concurrently, U.S. stocks experienced a slight retreat from their recent record highs.

The S&P 500 index fell by 0.2% from its all-time peak, marking only its second decline in 14 days, following the U.S. seizure of an Iranian-flagged cargo ship accused of attempting to bypass the blockade on Iranian ports. The Dow Jones Industrial Average decreased by 4 points, or less than 0.1%, while the Nasdaq composite dropped by 0.3%.

Oil Price Dynamics

The price of Brent crude oil, which serves as the international benchmark, surged by 5.6%, settling at $95.48. This rise is attributed to concerns that Iran might continue to restrict petroleum shipments in the Persian Gulf, particularly if it maintains its blockade of tankers in the Strait of Hormuz.

This marks a reversal from the previous trading day when stock prices soared and oil prices declined after Iran announced its intention to reopen the strait to commercial vessels. However, optimism quickly diminished when Iran re-closed the strait on Saturday following the U.S. decision to continue its blockade of Iranian ports.

Upcoming Ceasefire Deadline

A critical deadline is approaching on Tuesday night at 8 p.m. Eastern time, coinciding with early Wednesday in Tehran, when a ceasefire agreement between the United States and Iran is set to expire.

Despite recent fluctuations, oil prices remain significantly lower than the peaks reached during the conflict, with Brent crude previously exceeding $119 per barrel amid heightened fears. The S&P 500 index continues to trade above its pre-war levels.

Market Reactions

Monday's modest market movements indicate that investors still perceive a potential for a U.S.-Iran agreement that could restore oil supplies from the Middle East to global markets. Ending the conflict would likely benefit both nations economically.

Companies heavily reliant on fuel saw some of the largest declines on Wall Street following the rise in crude prices. Norwegian Cruise Line Holdings fell by 3.5%, and Royal Caribbean Group decreased by 1.1%.

In the airline sector, United Airlines dropped by 2.8%, and American Airlines fell by 4.2% after American Airlines expressed disinterest in a merger with United. Airline stocks had surged the previous week after reports indicated United's interest in merging with its competitor.

Stock Performance Highlights

On a positive note, TopBuild, a distributor of insulation and building products, saw its stock rise by 19.4% following news of a $17 billion acquisition by QXO. In contrast, QXO's stock fell by 3.1% after the announcement.

Overall, the S&P 500 declined by 16.92 points to close at 7,109.14. The Dow Jones Industrial Average decreased by 4.87 points to finish at 49,442.56, while the Nasdaq composite fell by 64.09 points to end at 24,404.39.

Corporate Earnings Outlook

The U.S. stock market's recent strength can be attributed to robust profit reports from U.S. companies during the first quarter of 2026, coupled with expectations for sustained growth. Several major banks, including JPMorgan Chase and Bank of America, reported stronger-than-expected profits, indicating a resilient U.S. economy fueled by solid consumer spending.

Morgan Stanley strategists, led by Michael Wilson, noted, 'Despite geopolitical risks, the earnings recovery remains intact.' Analysts have even increased profit expectations for the spring of 2026 since the onset of the war.

Approximately 10% of S&P 500 companies have reported their results for the beginning of 2026, with nearly 90% exceeding analysts' profit forecasts, according to FactSet. If other companies follow suit, overall earnings per share for S&P 500 firms could rise by 13% compared to the previous year.

Upcoming earnings reports from notable companies, including UnitedHealth Group, Tesla, and Procter & Gamble, are expected this week.

International Market Trends

In global markets, European indexes declined following a stronger finish in Asia. Germany's DAX index fell by 1.2%, while Hong Kong's Hang Seng index gained 0.8%, reflecting some of the more significant movements across international markets.

Source: Dailyhunt

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Trade Cycles

The four important features of Trade Cycle are (i) Recovery, (ii) Boom, (iii) Recession, and (iv) Depression!

The trades cycle or business cycle are cyclical fluctuations of an economy. A full trade cycle has got four phases: (i) Recovery, (ii) Boom, (iii) Recession, and (iv) depression. The upward phase of a trade cycle or prosperity is divided into two stages—recovery and boom, and the downward phase of a trade cycle is also divided into two stages—recession and depression.

Phases of Trade Cycle:

The phases of trade cycle are explained with a diagram:

(1) Recovery:

In the early period of recovery, entrepreneurs increase the level of investment which in turn increases employment and income. Employment increases purchasing power and this leads to an increase in demand for consumer goods.

As a result, demand for goods will press upon their supply and it shall, thereby, lead to a rise in prices. The demand for consumer’s goods shall encourage the demand for producer’s goods.

The rise in prices shall depend upon the gestation period of investment. The longer the period of investment, the higher shall be the price rise. The rise of prices shall bring about a change in the distribution of income. Rent, wages, interest do not rise in the same proportion as prices.

Consequently, the margin of profit improves. The wholesale prices rise more than retail prices. The prices of raw materials rise more than the prices of semi-finished goods and the prices of semi-finished goods use more than the prices of finished goods.

(2) Boom:

The rate of investment increases still further. Owing to the spread of a wave of optimism in business, the level of production increases and the boom gathers momentum. More investment is possible only through credit creation. During a period of boom, the economy surpasses the level of full employment and enters a stage of over full employment.

(3) Recession:

The orders for raw materials are reduced on the onset of a recession. The rate of investment in producers’ goods industries and housing construction declines. Liquidity preference rises in society and owing to a contraction of money supply, the prices falls. A wave of pessimism spreads in business and those markets which were sometime before sellers markets become buyer’s markets now.

(4) Depression:

The main feature of a depression is a general fall in economic activity. Production, employment and income decline. The prices fall and the main factor responsible for it is, a fall in the purchasing power.

The distribution of national income changes. As the costs are rigid in nature, the margin of profit declines. Machines are not used to their full capacity in factories, because effective demand is much less. The prices of finished goods fall less than the prices of raw materials.

✳Reality Tips to Traders

1)Trading in the stock market is a marathon. 2)Protecting your capital is key. (Learn to protect first) 3)Making 0 on the day is better than losing 50k 4)Losses happen; they are part of this business. 5)It’s not you vs. the market. It’s you VS you. 6)You are your biggest enemy; learn to be mentally disciplined. 7)Don’t follow the majority; follow the correct path. 8)Traders without a stop loss end up not being traders for long. 9)There is always another trade. 10)The big money is made waiting for the right set-ups. 11)Waiting for the right trade is the most powerful strategy. 12)It is better to cut a loss than to wait to be proven right. 13)Position sizing can make or break you. 14)Worry about the downside before you even think about the upside. 15)Don’t listen to headlines

..BANKING TERMINOLOGY

There are various types of Banks: PSU Banks, Private Banks, Co-operative/Regional Banks, Small Finance Banks and Foreign Banks. When you deposit money in a bank, let's say the bank gives you an interest rate of 4%. But when the bank lends out this money, they lend it out at say, 12%. The difference of 8% in the above scenario is effectively the profit of the bank! The loans that do not pay interest for 90 days are known as Non-performing Assets. Banks have to provide for such bad loans. Structure of a Bank Asset for a Bank: The asset portion of a bank's capital includes cash, government securities, and interest-earning loans (e.g., mortgages, letters of credit, and inter-bank loans). Liabilities for a Bank: The bank's main liabilities are its capital (including cash reserves and, often, subordinated debt) and deposits. The latter may be from domestic or foreign sources (corporations and firms, private individuals, other banks, and even governments). Banks are required to maintain Liquidity with the Reserve Bank of India: SLR (Statutory Liquidity Ratio): It is the money a bank needs to preserve in the form of cash, gold or government Bonds before providing credit customers. This limitation is added by RBI on banks to make funds available to customers on-demand at your earliest convenience. Banks are required to maintain SLR at 18%. CRR (Cash Reserve Ratio): Banks are required to hold a certain proportion of their deposits in the form of cash. Banks don’t hold these as cash with themselves, but deposit such amounts with RBI / currency chests. CRR rate is at 4.5% currently. Repo Rate: The rate at which the RBI lends short-term money to the banks. The RBI through its Monetary Policy committee changes the repo rate to balance growth and Inflation. Reverse Repo rate: The rate at which banks park their short-term excess liquidity with the RBI. Now let us understand various terminologies for Banks Net Interest Income (NII): This is the spread the bank makes on its lending. It is calculated as Interest Income – Interest Expended Net Interest Margin (NIM): This is the spread the bank makes on its lending. It is the earning which is left after deducting the cost paid to depositors from its yields on Loans. This is denoted in % terms. The formula is Yield on Loans – Cost of funds Capital Adequacy Ratio (CAR): The capital adequacy ratio (CAR) is a measure of a bank's available capital expressed as a percentage of a bank's risk-weighted credit exposures. Essentially, it is the Capital that is available to lend. Tier I Capital – In simple words this capital is freely available with the bank to lend out. Tier II Capital- This is the capital tied up somewhere and is less freely available to lend. In case of an adverse event, the bank can use this capital to lend. Under Basel III norms, a bank’s tier 1+tier 2 capital must be a minimum of 8% of its risk-weighted holdings. The minimum capital adequacy ratio, also including the capital conservation buffer, is 10.5%. Current Account Saving Account (CASA)- There is no interest paid on the Current Account and a small interest rate is paid on a savings account. The combination of both is called CASA which shows the liabilities of the bank on which it pays relatively less interest. Deposits: Bank deposits are a savings product that customers can use to hold an amount of money at a bank for a specified length of time. In return, the financial institution will pay the customer the relevant amount of interest, based on how much they choose to deposit and for how long. Now let us come to NPA. Gross NPA (GNPA): It is the total loans on which no payment has been paid for 90 days or more. GNPA % is usually shown in each Bank’s quarterly results. The percentage is basically the GNPA amount as a % of the total advances. Slippages: Slippages denote the fresh amount of loans that have turned bad in a year. The slippage ratio of a bank is calculated as Fresh accretion of NPAs during the year /Total standard assets at the beginning of the year multiplied by 100. Provisioning Coverage Ratio (PCR): This is the ratio of provisioning to GNPA and indicates the extent of funds a bank has kept aside to cover loan losses. For Instance, a company has GNPAs of Rs 100 and they have set aside 50 Rs, then the PCR is 50%. Net NPA (NNPA): The total figure left after deducting provisions made for bad loans from GNPA. (GNPA – Provisions+upgrades/writeoffs = NNPA) Special Mention Account (SMA) SMA-0 is a category in which stress with respect to the principal and interest has remained overdue for a period of 0 to 30 days. SMA-1 is a category in which stress with respect to the principal and interest has remained overdue for a period of 30-60 days. SMA-2 is a category in which stress with respect to the principal and interest has remained overdue for a period of 60-90 days

..... . VALI disclosures . .....

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Tuesday, April 21, 2026

21/05/26, Oil Prices Rise

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Today's

US-Israel-Iran War Updates, April 21, 2026

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