Earnings day dispersion — XOM, CVX, COP red. LIN green.
LIN +2.55% / XLE −1.41% / XOM −0.95% / CVX −1.33% / COP −1.79%. Same earnings morning. Different exposures.
Exxon and Chevron beat first–quarter profit estimates and lost $7 billion combined on derivative hedges against a 74 percent Brent rally. The oil major with a hedge book is a partial short on its own commodity.
LIN +2.55% / XLE −1.41% / XOM −0.95% / CVX −1.33% / COP −1.79%. Same earnings morning. Different exposures.
$4 billion. $2.9 billion. Exxon Mobil’s first–quarter results included a $4 billion loss tied to derivative hedges and inventory timing during the Middle East tensions. Chevron booked a separate $2.9 billion charge against its own financial–hedge book. Both companies cleared the consensus profit bar — Exxon ex–items $1.16 versus a $1.07 estimate, Chevron $1.11 versus $0.92 — and both stocks traded down from the open. XOM is $152.86, down 0.95 percent. CVX is $190.74, down 1.33 percent. The market read the hedge line and not the EPS line.
−45 percent. −36 percent. Exxon’s net income fell 45 percent year over year to $4.2 billion. Chevron’s fell 36 percent to $2.2 billion. Both companies produced more barrels in the quarter and earned higher realizations on every barrel they sold. The cash machine ran fine. The financial overlay is what carved the income statement.
+74 percent. Brent crude was $61 a year ago and prints $108 today. The twelve–month rally was 74 percent, the three–month was 53 percent, and most of it came after the February 28 strike on Iran. The hedge books at the majors were sized for a flat–to–down regime; the war regime made them partially short their own commodity. Conoco fell 1.79 percent on a similar profile. XLE, the energy sector ETF, fell 1.41 percent on a tape where the S&P prints fresh records.
+2.55 percent. Linde, the industrial–gas major reporting alongside the oil names, rallied 2.55 percent to $513.93 from a Thursday close of $501.14. Linde’s $238 billion business is contracted helium and oxygen and hydrogen volumes against multi–year offtake agreements. There is no commodity hedge book to carry against a war spike. The price is the price.
Silver +138% / Brent +74% / XLE +46% / XOM +44% / CVX +40%. The unhedged metal beat the producer 3:1.
+138 percent. Silver futures trade $76.60 today, up 4.2 percent on the session and 138 percent across twelve months. Gold is up 45 percent on the same window. The unhedged metals trade cleared the producer–with–a–hedge–book by a roughly three–to–one ratio in a year that should have been the producer’s regime. The cleanest exposure to a commodity is sometimes the metal in a vault, not the equity that produces it.
+4.91 percent. Apple closed Thursday at $271.35 after a choppy after–hours and reopened at $284.68 today — a 4.9 percent rally to a $287.21 day high. The cash session is reading the print as cleanly bullish. Revenue $111.18 billion against a $111.7 billion estimate; iPhone +22 percent year over year; Greater China $20.5 billion against $16 billion. The contrast with the oil tape is the day’s symmetry. The technology bid extended. The energy bid faded into the financial overlay.
156.71. 97.89. The dollar drift is the third reading. USD/JPY trades $156.71, down 2.2 percent across the day and 426 pips below the Wednesday Powell–hawkish peak. DXY $97.89, down 0.2 percent. The yen–carry unwind that began with the Bank of Japan’s Tuesday hold is now four full sessions deep. Long–duration Treasuries did not bid. TLT prints $85.69 against a $85.62 prior close — flat through eight scout windows running. The duration trade refused the carry–unwind invitation.