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Market Snapshot

📉 Banana Bits

• Kim Jong Un unveiled a “drone-proof” tank, with his heir making an appearance.

• Alibaba and Tencent shed $66B as AI hype collided with earnings reality.

• WTI crude slipped as the U.S. and Israel tried to cool Iran war fears.

• Iran strikes could cost QatarEnergy $20B annually as LNG capacity takes a hit.

• Rising war budgets added $28B to defense sector valuations.

• The ECB warned inflation could reach 6.3% by 2027 after holding rates steady.

Market News

Markets Are Holding Their Breath

Markets calmed after a volatile session as oil prices pulled back and geopolitical tensions showed early signs of easing.

The S&P 500 erased most of its ~1% drop, while Treasuries rebounded after earlier losses driven by inflation fears. WTI oil fell to around $95 after Israel signaled cooperation with the U.S. to reopen the Strait of Hormuz, a critical artery for global energy supply.

Investor sentiment remains highly sensitive to headlines, as markets try to price in the duration and severity of the Iran conflict. Three weeks of fighting have already disrupted global energy flows, pushing up fuel prices and triggering shortages in parts of Asia.

Meanwhile, policymakers are stepping in:

• The U.S. is considering easing sanctions on Iranian oil to stabilize prices

• Officials ruled out restricting U.S. energy exports

• Central banks remain on alert as inflation risks resurface

Despite the late-session bounce, the S&P 500 failed to reclaim its 200-day moving average, signaling lingering caution. Adding to volatility, markets are bracing for a massive ~$5.7 trillion options expiry (“triple witching”), which could amplify price swings.

Strategists remain cautious, warning that markets may be underestimating the economic impact of sustained high oil prices. Some see a potential 7–10% pullback as a buying opportunity.

Peel Take: Markets rallied on the idea that “things might not get worse,” which is not exactly a bullish thesis.

Right now, everything hinges on one thing: oil.

• Strait opens → oil drops → inflation cools → stocks breathe

• Strait stays tight → oil spikes → inflation returns → Fed stays hawkish

This isn’t a fundamentals-driven market; it’s a geopolitics-driven one.

What's Ripe

Signet Jewelers Ltd. (SIG) 13.7%

• SIG jumped 13.7% after the parent of Zales and Kay delivered solid holiday-quarter earnings, with revenue hitting $2.35 billion in line with expectations.

• However, the shine faded slightly beneath the surface. Same-store sales slipped 0.7%, and forward guidance disappointed, hinting at softer momentum ahead.

• Peel Take: People bought the diamonds… just not enough of them. The headline looks strong (Earning), but the underlying trend is weaker (same-store sales), a real quarter for optics, less great for actual demand.

Accenture PLC (ACN) 4.3%

• ACN jumped 4.3% after the IT consulting firm reported better-than-expected second-quarter earnings, giving investors enough confidence to overlook soft forward guidance.

• CEO Julie Sweet highlighted record bookings, but analysts were quick to note that growth in those bookings is starting to slow, a subtle crack beneath the strong headline numbers.

• Peel Take: Beat the quarter, dodge the guidance, and hope no one reads the fine print. Investors are rewarding what just happened, not what’s coming next. But, slowing bookings = future revenue warning in disguise.

What's Rotten

Alibaba Group Holding Ltd. (BABA) 7.1%

• U.S.-listed shares of Alibaba Group fell 7.1% after the company reported a sharp decline in profit and weaker-than-expected revenue for the December quarter.

• The results highlight that AI progress isn’t yet strong enough to offset ongoing pressure in its core e-commerce business.

• Peel Take: Alibaba brought AI to the fight, but e-commerce is still losing the battle. Investors aren’t buying the future if the core business is struggling today/ AI hype can’t save weak fundamentals, at least not yet.

Micron Technology Inc. (MU) 3.8%

• MU fell 3.8% despite reporting strong second-quarter earnings and upbeat guidance. The decline likely reflects profit-taking, with the stock already up an eye-watering 333% over the past year on booming AI-driven demand.

• Peel Take: Great earnings… but investors said, “Thanks, I’ll take my profit now.”Nothing wrong with the business, just a case of expectations getting ahead of reality. When you’ve already won big, even good news can trigger selling.

🧠 Technical Trip

Interview Q&A from Ares

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📚 Lesson from the Library

🎥 Quant Finance Interview Course: Where Math Meets Markets

Master probability, brainteasers, and coding logic for top quant interviews.

🎓 Check out the Quant Finance Interview Course

🌟 WSO Academy Q4 Update

📚 Course Development

We’ve continued expanding the Academy curriculum to give students broader coverage across industries, roles, and technical topics.

Recently Released

• CFA Level 1

• CFA Level 2

• Series 6 Test Prep

• Renewable Energy Project Finance Course

• 4 New Deal Walkthroughs added to the Investment Banking Course

In ~1 week, our Quant Course will be live!

Coming Soon

🔜 Series 7 Test Prep
🔜 REIT Lessons + NAV Analysis Model
🔜 FIG Modeling Course

Apply to WSO Academy

🦈 Deal Dispatch

M&A, IPOs, And Other Notable Transactions

• China’s miners are gearing up for more deals as gold momentum builds into 2026.

• Kalshi raised $1B at a $22B valuation as prediction markets go mainstream.

• OpenAI acquired Astral to expand its coding ambitions.

• Uber plans to invest $1.25B in Rivian to accelerate robotaxi development.

📊The Daily Poll

Previous Poll:

Why is foreign demand for U.S. Treasuries rising?

Yield appeal: 33.3% // Safe haven demand: 33.3% // Currency hedging: 15.5% // Japan buying: 17.9%

Student Success Corner

👉 Are you next? Find out with WSO Academy

Banana Brain Teaser

Previous

60% of the members of a study group are women, and 45% of those women are lawyers. If one member of the study group is to be selected at random, what is the probability that the member selected is a woman lawyer?

Answer: 27%

Today

The current student-to-teacher ratio at a certain school is 30 to 1. If student enrollment increased by 50 students and the number of teachers increased by 5, the student-to-teacher ratio would be 25 to 1. What is the present number of teachers?

How Would You Rate Today's Peel?

Happy Investing,
Chris, Vyom, Ankit, Mitchell, Fernanda, & Patrick

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