After yesterday’s blowout rally, markets are back in the red.

The S&P 500 is down 0.26%, or by 17. The SPDR S&P 500 ETF (SPY) is down fractionally. The Dow is down 0.28%, or by 128. The Nasdaq is down 0.25%, or by 60 points. Oil is up $2.90 at $91.03. Gold is up $6.42 at $4,410.90. Bitcoin is up about $147 at $71,045.35.

And unfortunately, the war still shows no signs of cooling, as Iran drops missiles on Israel. In addition, while President Trump is determined to reach a deal, Israel says that it’s unlikely that Iran would agree to the demands.

And, while hopes for positive talks sent markets screaming higher yesterday, “No negotiations have been held with the US,” Mohammad Bagher Qalibaf, the speaker of Iran’s parliament, said, as quoted by the Associated Press. “And fakenews is used to manipulate the financial and oil markets and escape the quagmire in which the US and Israel are trapped.”

Citi Says $200 Oil is Possible

With war intensifying, oil could eventually test $200.

“We posit that the ongoing loss of energy supply to [the] global economy is so large (larger than the shocks of the 1970s as a share of oil supply) that it simply must be solved, either militarily or diplomatically, and that through various potential channels this occurs by mid-late April,” said the firm, as quoted by MarketWatch.com.

The firm expects things to only get worse, with Brent possibly running to at least $120 over the next month. If we see prolonged energy production through June, $200 oil could become a reality. “They come up with that number based on the typical relationship between inventory and price, given the world is now without 13.5 million barrels per day, taking out some 400 million barrels per month, due to Strait of Hormuz disruptions,” added MarketWatch.com.

That would aggressively force oil stocks and ETFs higher until demand destruction sets in.

Market Movers: Diamondback Energy 

Analysts at Truist just initiated a buy rating on Diamondback Energy (NASDAQ: FANG). The firm noted that it “stands out as the last large-cap Permian pure-play E&P with a core focus on the Midland Basin and a secondary position in the Delaware Basin,” as quoted by CNBC.

Since bottoming out at around $140 in April, the FANG stock rallied to a high of $194.68. From here, we’d like to see an initial test of $210, which could happen with the U.S.-Iran war.

Analysts at Bank of America reinstated a buy rating on Microsoft (NASDAQ: MSFT | MSFT Price Prediction), noting that the tech giant is a beneficiary of AI monetization. We are reinstating coverage of Microsoft (MSFT)with a Buy rating and a $500 PO, implying 31% upside potential, supported by durable multi-year growth across cloud and AI. Microsoft’s advantage lies in its ability to capitalize on AI across both infrastructure and applications,” as also quoted by CNBC.

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