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Major data releases ahead! Could GDP and PCE trigger market volatility?
Futubull Options Sir
joined discussion · Apr 13 18:08 ·

Options Sir's Macro View | Geopolitical rivalry yet to be resolved, earnings season will test the authenticity of AI demand

No agreement reached between the US and Iran: partially priced in advance, with April 22 as the key window
After a 21-hour marathon negotiation over the weekend, the US-Iran talks failed to reach a final agreement. In these negotiations, the US put forward what it called the 'final and best offer,' with core demands including a long-term commitment from Iran not to develop nuclear weapons and an attempt to make a breakthrough in control over the Strait of Hormuz. Meanwhile, Iran rejected the tough conditions proposed by the US, with key disputes centering on the binding nature of nuclear commitments, control over the Strait of Hormuz, and the unfreezing of Iranian assets frozen by the US.
Despite the failure to reach an agreement, neither side completely shut the door on further negotiations:The US delegation described the outcome as 'no agreement yet' rather than a 'negotiation failure,' and both sides expressed willingness to keep the possibility of future communication open.This indicates that this round of negotiations was more about 'probing the bottom line' in the first stage rather than a complete breakdown.
From the perspective of market pricing logic, the outcome of this failed negotiation has actually been partially priced in by the market in advance. Today's Asian session did not trigger a 'Black Monday'-style panic sell-off, due to the following reasons:
1. The market had anticipated this outcome: The nuclear issue and geopolitical tensions between the US and Iran are decades-old problems. The market never had high expectations for the first round of talks, especially given the lack of trust between the two sides.The first round of negotiations was more about posturing and probing the bottom line, a result that aligns with the market’s baseline expectations.
2. The ceasefire agreement remains in effect.Looking ahead, the temporary 'breakdown' of negotiations has left the market potentially tangled once again.However, as long as both sides adhere to the validity of the ceasefire agreement, a complete loss of control can be avoided, which may also align with the interests of both parties. The risk of a 'full-scale war,' previously the market's biggest concern, has not materialized.
Beneath the short-term calm, medium-term risks remain: April 22 is the expiration date of the current ceasefire agreement and will be the key observation window over the next two weeks. If no new agreement is reached before the deadline, there is a possibility of escalation: the US side may unilaterally initiate mine-clearing operations in the Strait of Hormuz to forcibly restore navigation, while military retaliation from Iran could reignite hostilities.
CPI validates inflation structure; rate cut expectations have been pushed back to 2027.
Friday's release of March CPI data became the market's focus, showing that:
- Overall CPI rose 0.87% month-over-month and 3.26% year-over-year, slightly below market consensus expectations of 0.9% and 3.4%, respectively;
- Core CPI increased only 0.20% month-over-month and 2.6% year-over-year, also below market expectations of 0.3% and 2.7%, respectively.
A breakdown of the data clearly shows that this CPI surge was primarily driven by energy prices: the energy component contributed 0.62 percentage points to the month-over-month increase, accounting for more than 70% of the total rise, while food prices actually declined, and core goods and services saw moderate increases. This indicates that rising oil prices have yet to transmit into core inflation.
This also explains why the market reaction was muted after the data release.The market had long anticipated that the rise in oil prices would push up the CPI, and the lower-than-expected core inflation actually verified the structural characteristics of inflation. This data did not further dampen expectations for interest rate cuts.
If the situation escalates, oil prices may surge again. If the oil price remains above $100 per barrel until the end of the year, it could lead to persistently high inflation in the US, disrupting the trading chain expected by the market: 'falling oil prices → slowing inflation → earlier rate cuts.' However, considering Trump's political interests, prolonged high oil prices do not align with his midterm election goals, so a phased easing of tensions remains the more likely baseline scenario.
The current market expectation for interest rate cuts has been pushed back to 2027.However, this expectation has already priced in the pessimistic scenario of persistently high oil prices. If oil prices subsequently fall, expectations for interest rate cuts are likely to recover quickly.
US-Iran agreement not reached: partially priced in already, April 22 is a key window Weekend US-Iran negotiations failed to reach a final agreement after 21 hours of marathon talks. In these negotiations, the US presented what it called the 'final and best offer,' with core demands including Iran making a fundamental long-term commitment to not develop nuclear weapons, while also trying to achieve a breakthrough on control over the Strait of Hormuz. Iran, however, rejected the US’s tough conditions, with core conflicts centering around the enforceability of nuclear commitments, control over the Strait of Hormuz, and the unfreezing of Iranian assets frozen by the US. Despite the failure to reach an agreement, neither side has completely shut the door on further negotiations:The US delegation used the phrase 'no agreement has been reached yet' rather than 'negotiations have failed' as the official statement, and both sides expressed willingness to keep the possibility of future communication open.This suggests that this round of negotiations was more about testing each other’s bottom lines rather than a complete breakdown. From the perspective of market pricing logic, the outcome of this failed negotiation has actually been partially priced in by the market in advance. The Asian session today did not trigger a 'Black Monday'-style panic sell-off, because: 1. The market had anticipated this: The nuclear issue and geopolitical tensions between the US and Iran are decades-old unresolved issues, and the market never had high expectations for the first round of negotiations. Given the lack of trust between the two sides,The first round of negotiations was more about posturing and probing the bottom line, a result that aligns with market expectations...
AI sector: Significant compression in valuations; earnings season will test the authenticity of AI demand.
After previous adjustments, the valuation of the current AI sector has seen significant compression: Goldman Sachs noted that the PEG ratio of MAG7 falling below the average presents a rare buying opportunity.The forward PE of the technology sector has been compressed from 32 times at the end of October last year to around 20 times, nearly approaching the S&P 500’s 19.3 times.However, MAG7 is not 'cheap as a whole'—there is some differentiation within leading companies., among which $NVIDIA (NVDA.US)$ The forward PE has dropped to about 22.8 times. $Meta Platforms (META.US)$ Approximately 21 times. $Microsoft (MSFT.US)$ has also dropped to around 21 times. However, $Tesla (TSLA.US)$ and $Apple (AAPL.US)$ it is still difficult to say that it is undervalued.
From a historical perspective, geopolitical shocks have on average caused an 8% decline in the S&P 500, lasting about 18 days. In this round of Middle East conflict, the maximum drawdown of the S&P 500 reached 9%, but it has already largely recovered after the announcement of the ceasefire. This indicates that the market has mostly priced in the short-term impact of the geopolitical conflict.
US-Iran agreement not reached: partially priced in already, April 22 is a key window Weekend US-Iran negotiations failed to reach a final agreement after 21 hours of marathon talks. In these negotiations, the US presented what it called the 'final and best offer,' with core demands including Iran making a fundamental long-term commitment to not develop nuclear weapons, while also trying to achieve a breakthrough on control over the Strait of Hormuz. Iran, however, rejected the US’s tough conditions, with core conflicts centering around the enforceability of nuclear commitments, control over the Strait of Hormuz, and the unfreezing of Iranian assets frozen by the US. Despite the failure to reach an agreement, neither side has completely shut the door on further negotiations:The US delegation used the phrase 'no agreement has been reached yet' rather than 'negotiations have failed' as the official statement, and both sides expressed willingness to keep the possibility of future communication open.This suggests that this round of negotiations was more about testing each other’s bottom lines rather than a complete breakdown. From the perspective of market pricing logic, the outcome of this failed negotiation has actually been partially priced in by the market in advance. The Asian session today did not trigger a 'Black Monday'-style panic sell-off, because: 1. The market had anticipated this: The nuclear issue and geopolitical tensions between the US and Iran are decades-old unresolved issues, and the market never had high expectations for the first round of negotiations. Given the lack of trust between the two sides,The first round of negotiations was more about posturing and probing the bottom line, a result that aligns with market expectations...
In sharp contrast to the compression of valuations, earnings expectations for tech stocks continue to rise. According to LSEG IBES forecasts, expected earnings growth for the U.S. tech sector in 2026 remains at 43%, significantly higher than the overall S&P 500 level of 18.8%.
At the same time, significant divergence has emerged within the AI sector:
– Winner: Optical networks for AI, data centers, and hardware related to storage and memory—these sectors have been the best performers year-to-date, with mild pullbacks during the geopolitical conflict and the strongest rebounds after the ceasefire. This is because these sectors have higher earnings certainty, as demand for AI infrastructure represents a long-term industry trend that won't be altered by short-term geopolitical conflicts.
– Loser: Software, IT services, and other 'AI exposure' stocks were heavily shorted during the geopolitical conflict and are still facing pressure from valuation corrections.
This week marks the official start of the Q1 earnings season for U.S. stocks, which will be a key window to verify AI-related demand. Key catalysts to watch include earnings reports from ASML and Taiwan Semiconductor.These reports will directly reflect global AI chip production capacity and demand conditions. Current expectations indicate that the market is optimistic about both companies’ performance, which will validate the sustainability of AI computing power demand.
In the short term, uncertainties surrounding the geopolitical situation remain, with the April 22nd expiration of the ceasefire being a key observation point. If there’s no breakthrough in U.S.-Iran negotiations, the market may partially reprice risk premiums. However, the main narrative in U.S. stocks hasn’t fallen apart; tolerance for valuation and fundamentals is declining. Ultimately, what will determine market direction is how long oil prices stay elevated and whether earnings season can maintain profit expectations.
AI software stocks that were previously overvalued and lacked earnings support still face pressure from valuation adjustments. At the same time, for thematic stocks that have recently seen substantial gains, investors should be wary of the risk of emotionally driven buying at elevated prices.
(1) If investors hold a large position and believe that the short-term market is highly likely to enter a high-level consolidation phase,
If an investor holds physical shares and believes that the short-term market will most likely enter a high-level consolidation, it would be suitable to adopt a covered call strategy — which means being willing to accept 'earning slightly less if the price rises too quickly' in exchange for collecting time value first, adding an extra layer of buffer to the portfolio. The selection of strike price can typically be placed at a level where one is willing to accept passive reduction of holdings. To illustrate with an example: $NVIDIA (NVDA.US)$ For illustration purposes:
(The figure below illustrates the simulated profit and loss scenario of this strategy on the expiration date. The design image displayed on the screen is for demonstration purposes only and does not constitute any investment advice or guarantee; market conditions fluctuate frequently, and the prices shown do not represent actual values.)
US-Iran agreement not reached: partially priced in already, April 22 is a key window Weekend US-Iran negotiations failed to reach a final agreement after 21 hours of marathon talks. In these negotiations, the US presented what it called the 'final and best offer,' with core demands including Iran making a fundamental long-term commitment to not develop nuclear weapons, while also trying to achieve a breakthrough on control over the Strait of Hormuz. Iran, however, rejected the US’s tough conditions, with core conflicts centering around the enforceability of nuclear commitments, control over the Strait of Hormuz, and the unfreezing of Iranian assets frozen by the US. Despite the failure to reach an agreement, neither side has completely shut the door on further negotiations:The US delegation used the phrase 'no agreement has been reached yet' rather than 'negotiations have failed' as the official statement, and both sides expressed willingness to keep the possibility of future communication open.This suggests that this round of negotiations was more about testing each other’s bottom lines rather than a complete breakdown. From the perspective of market pricing logic, the outcome of this failed negotiation has actually been partially priced in by the market in advance. The Asian session today did not trigger a 'Black Monday'-style panic sell-off, because: 1. The market had anticipated this: The nuclear issue and geopolitical tensions between the US and Iran are decades-old unresolved issues, and the market never had high expectations for the first round of negotiations. Given the lack of trust between the two sides,The first round of negotiations was more about posturing and probing the bottom line, a result that aligns with market expectations...
（2）If investors have lighter positions and believe that technology stocks may experience a significant short-term pullback but are more likely to rebound once tensions ease,
Technology stocks are the most sensitive to risk appetite and may see a short-term decline due to unfavorable US-Iran negotiations. If investors believe there is an opportunity to add positions at a lower price in the short term, capturing rebound profits could be appropriate. Investors can adopt a combination strategy of 'going long on physical shares + options hedging,' meaning while going long on physical shares, they might consider purchasing puts on tech stocks expiring after April 22 as a hedge, akin to buying insurance for their physical shareholdings. The advantage of this strategy is that it neither misses out on potential short-term rebounds nor locks in downside risks two weeks later, with the maximum loss limited to the premium paid for the put option.
(The figure below illustrates the simulated profit and loss scenario of this strategy on the expiration date. The design image displayed on the screen is for demonstration purposes only and does not constitute any investment advice or guarantee; market conditions fluctuate frequently, and the prices shown do not represent actual values.)
US-Iran agreement not reached: partially priced in already, April 22 is a key window Weekend US-Iran negotiations failed to reach a final agreement after 21 hours of marathon talks. In these negotiations, the US presented what it called the 'final and best offer,' with core demands including Iran making a fundamental long-term commitment to not develop nuclear weapons, while also trying to achieve a breakthrough on control over the Strait of Hormuz. Iran, however, rejected the US’s tough conditions, with core conflicts centering around the enforceability of nuclear commitments, control over the Strait of Hormuz, and the unfreezing of Iranian assets frozen by the US. Despite the failure to reach an agreement, neither side has completely shut the door on further negotiations:The US delegation used the phrase 'no agreement has been reached yet' rather than 'negotiations have failed' as the official statement, and both sides expressed willingness to keep the possibility of future communication open.This suggests that this round of negotiations was more about testing each other’s bottom lines rather than a complete breakdown. From the perspective of market pricing logic, the outcome of this failed negotiation has actually been partially priced in by the market in advance. The Asian session today did not trigger a 'Black Monday'-style panic sell-off, because: 1. The market had anticipated this: The nuclear issue and geopolitical tensions between the US and Iran are decades-old unresolved issues, and the market never had high expectations for the first round of negotiations. Given the lack of trust between the two sides,The first round of negotiations was more about posturing and probing the bottom line, a result that aligns with market expectations...
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US-Iran agreement not reached: partially priced in already, April 22 is a key window Weekend US-Iran negotiations failed to reach a final agreement after 21 hours of marathon talks. In these negotiations, the US presented what it called the 'final and best offer,' with core demands including Iran making a fundamental long-term commitment to not develop nuclear weapons, while also trying to achieve a breakthrough on control over the Strait of Hormuz. Iran, however, rejected the US’s tough conditions, with core conflicts centering around the enforceability of nuclear commitments, control over the Strait of Hormuz, and the unfreezing of Iranian assets frozen by the US. Despite the failure to reach an agreement, neither side has completely shut the door on further negotiations:The US delegation used the phrase 'no agreement has been reached yet' rather than 'negotiations have failed' as the official statement, and both sides expressed willingness to keep the possibility of future communication open.This suggests that this round of negotiations was more about testing each other’s bottom lines rather than a complete breakdown. From the perspective of market pricing logic, the outcome of this failed negotiation has actually been partially priced in by the market in advance. The Asian session today did not trigger a 'Black Monday'-style panic sell-off, because: 1. The market had anticipated this: The nuclear issue and geopolitical tensions between the US and Iran are decades-old unresolved issues, and the market never had high expectations for the first round of negotiations. Given the lack of trust between the two sides,The first round of negotiations was more about posturing and probing the bottom line, a result that aligns with market expectations...
Option Risk Warning:An option is a contract that grants the holder the right, but not the obligation, to buy or sell an asset at a fixed price on a specific date or at any time before that date. The price of an option is influenced by various factors, including the current price of the underlying asset, the strike price, time to expiration, and implied volatility. Implied volatility reflects the market’s expectations for the level of volatility in the option over a future period. It is a data point derived inversely from the Black-Scholes option pricing model and is generally regarded as an indicator of market sentiment. When investors anticipate greater volatility, they may be more willing to pay a higher price for options to hedge risks, resulting in higher implied volatility. Traders and investors use implied volatility to assess the attractiveness of option prices, identify potential mispricings, and manage risk exposure.
Disclaimer:This content does not constitute any offer, solicitation, recommendation, opinion, or guarantee for any securities, financial products, or tools. The risk of loss in trading options can be substantial. In some cases, losses may exceed the initial margin deposited. Even if you set contingent orders such as 'stop-loss' or 'limit' orders, these may not prevent losses. Market conditions may prevent these orders from being executed. You might be required to deposit additional margin within a short period. If you fail to provide the required amount within the specified time, your open positions may be liquidated. However, you will still be responsible for any shortfall in your account. Therefore, before trading, you should study and understand options and carefully consider whether such trading is suitable for you based on your financial situation and investment objectives. If you trade options, you should be familiar with the procedures for exercising options and the rights and obligations upon exercise and expiration. Option trading involves extremely high risks and is not suitable for all investors. Investors should read carefully before engaging in any options trading strategy.Characteristics and Risks of Standardized Options。
Risk Disclaimer: The above content only represents the author's view. It does not represent any position or investment advice of Futu. Futu makes no representation or warranty.Read more
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