Main News: Oil prices rise due to OPEC’s decision

The decision by OPEC to sharply cut production quotas has pushed oil prices up. Tesla (NASDAQ:TSLA) reports record deliveries but is falling short of Elon Musk’s growth target for the year. According to reports, the owner of UFC Endeavor is in talks to merge with WWE. Here’s what you need to know about the financial markets on Tuesday, April 4th.

1. Saudi Arabia leads in the shocking reduction of OPEC oil production quotas. The organization of oil-exporting countries must lower its oil production target by 1,000,000 barrels a day from May, aiming to establish a floor for oil prices that have fallen in recent weeks due to economic downturns in developed countries.

Bond yields have increased as markets reacted to new inflationary pressure expected throughout this year.

This decision reflects the complexity of reconciling Saudi Arabian and U.S. views on the global energy market. It comes just a few weeks after the U.S. abandoned plans to replenish the Strategic Petroleum Reserve for this year, which would have supported prices in the short term.

This also followed the Biden administration’s decision to allow the development of the Willow oil project in Alaska, indicating greater sensitivity to U.S. energy security needs.

As always with OPEC quotas, the actual change in current supply may not correspond to the announced change. Analysts expect the actual reduction to be around 700,000 barrels per day.

U.S. oil futures, which rose 8% on Sunday’s news, have cut their gains as markets digest the bearish signal underlying this move. At 06:00 Eastern Time (10:00 GMT), they fell to $79.60 per barrel, down 5.2% from Friday. Brent rose 5.1% to $83,94 for barrel.

2. Tesla’s deliveries in the first quarter fall short of Musk’s plans
Tesla (NASDAQ: TSLA) set a new record for car deliveries in the first quarter, thanks to a sharp reduction in prices in January.

The company delivered more than 422,000 cars in the three months to March, up 36% from a year earlier and 4% from December. That’s clearly below Elon Musk’s goal of growing by more than 50%, although growth is expected to accelerate in the second half of the year as production ramps up at the company’s new factories.

The figures come amid mass layoffs in high-paying sectors of the US economy, which make up a large portion of Tesla’s customer base.

In response, Tesla’s shares fell by around 2% in pre-market trading.

3. Stocks set for mixed open; ISM Manufacturing PMI due
US stock markets are set to open the week in different directions after an unexpected OPEC decision raised further doubts about the Federal Reserve’s ability to begin easing monetary policy in response to slowing economic growth.

As of 05:30 Eastern Time, Dow Jones futures were up 102 points, or 0.3%, but S&P 500 futures were down 0.2% and Nasdaq 100 futures, sensitive to interest rates, were down 0.7%.

Stocks likely to be in focus later include Endeavor Group after reports it is considering a merger with wrestling franchise owner WWE (NYSE: WWE) and McDonald’s (NYSE: MCD), which reportedly plans to announce layoffs this week.

The data calendar is almost empty, with only ISM Manufacturing PMI due. Comparable surveys in China disappointed yesterday, while in the eurozone they were slightly stronger than expected.

4. UBS plans to cut 36,000 jobs following its merger with Credit Suisse, and Swiss prosecutors are currently investigating the matter. The consequences of the UBS and Credit Suisse merger continue to unravel. As regulators forced UBS to acquire its competitor in March, the Swiss bank plans to cut up to 36,000 jobs as a result. The job losses are expected to be concentrated in the investment banking division, which Credit Suisse was already downsizing. Since UBS flirted with disaster during the 2008-2009 financial crisis, the bank has scaled back its investment banking and capital market businesses.

Over the weekend, Switzerland’s federal prosecutor announced that it is investigating possible criminal activity resulting from the merger with Credit Suisse, which required swift changes to Swiss legislation. This statement adds a spicy prologue to Credit Suisse’s annual general meeting, which is scheduled for Tuesday.