00:00We're seeing earnings season have been pretty robust so far, showing you that the Iran risks have been quite contained.
00:08But it's worth noting that so far, it's just first quarter earnings.
00:12And that includes two months that was not impacted by the war.
00:18So only one month into the Iran war.
00:20And obviously, there's also some delayed effect as well.
00:23So while some investors may see this as very positive signs, we actually should be expecting the impact to come
00:34further down the road in a delayed matter.
00:38So what's important to watch this time around is not the results itself, but really the CAPEX and kind of
00:45the forecast going forward.
00:47We have 80 percent of the S&P companies beating estimates.
00:51But remember, we actually do have five out of the MAC7 companies reporting this week.
00:58And these hyperscalers, their CAPEX spending and their impact from the Iran war is going to have massive implications for
01:06the rest of the companies worldwide as well.
01:10And for now, we're expecting MAC7 earnings to expand about 19 percent for this quarter.
01:16So still some growth expected.
01:20If there is that delayed effect on these earnings reports and on companies' balance sheets, could that make for a
01:27more painful Q2?
01:29That can make a more painful Q2 that might not even show up in second quarter earnings, but somewhere down
01:37the road, maybe showing up third quarter or fourth quarter.
01:41Because so far with this oil cushion that we're seeing, actually, that some of the economies have been releasing these
01:50oil supplies.
01:51So these are helping companies to weather the impact so far.
01:55When we talk to strategists, they are saying that even if the Strait of Hormuz opens today, the impact of
02:04the actual physical supply chain disruption is not going to reverse in just one day.
02:10We're talking about 10 percent of the global supply already getting cut off.
02:16So those really haven't shown in the further economic impact.
02:21And we believe that that's only going to translate later on.
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