Oil Plunge Sparks a Relief Rally in Airline Stocks

A United-American Merger Would Create the World’s Largest Carrier

Meanwhile, United’s Scott Kirby has reportedly pitched the most ambitious airline deal in a generation. A combined United-American merger would create the world’s largest carrier, commanding roughly 40% of domestic capacity and generating over $100 billion in annual revenue.

No question, the deal would face enormous antitrust scrutiny. Analysts have already identified nearly 300 overlapping routes that would likely require divestitures.

So far, the White House has declined to take a position, which I take as neither encouragement nor discouragement.

Delta Shows How Pricing Power Beats Fuel Inflation

What’s changed since the last wave of consolidations is the business model itself. Many carriers have transformed themselves from transportation providers into sophisticated platforms built on premium products, loyalty programs, co-branded financial services and more.

Just look at Delta’s most recent earnings report. The carrier posted record first-quarter revenue of $14.2 billion, up more than 9% year-over-year, even as fuel costs surged dramatically. The Atlanta-based company projected fuel costs of $4.30 per gallon this quarter, up from $2.62 in the prior year’s quarter, an increase that will add more than $2 billion in costs. And yet earnings grew more than 40% over the prior year.

How did Delta manage this? Well, premium revenue climbed 14%. Loyalty revenue rose 13%. Its deal with American Express alone has exceeded $2 billion. Diversified, high-margin revenue streams now represent 62% of Delta’s total revenue and are growing in the mid-teens. CEO Ed Bastian noted the company is also reducing capacity growth and moving to recapture higher fuel costs through pricing, which is exactly the kind of disciplined behavior I want to see.

This is the “premiumization” model that industry analysts have been talking about, and it’s working.

Today’s airlines are doing more than just selling seats. They’re closer to consumer and financial services firms that also happen to fly airplanes.

The Direction of Oil Matters More Than the Price

This week, considering higher fuel prices, I analyzed historical data going back to 2001, looking at the relationship between Brent crude oil prices and the NYSE Arca Global Airlines Index.

What I found is that oil prices alone don’t tell you much about where airline stocks are headed. Instead, what matters is the trend.

When oil had been rising over the past four weeks, airline stocks returned an average of nearly 6% over the following year. Conversely, when oil had been falling for four weeks, they returned an average of almost 14%.

The direction of oil, then, mattered about twice as much as its price.

The most powerful setup was when oil was elevated (in the top 20% of its historical range) but had started to decline over the prior 13 weeks. In those instances, airline stocks returned an average of nearly 31% over the following 12 months, with positive outcomes roughly 84% of the time.

Think about what happened this morning. Iran’s foreign minister announced the Strait of Hormuz is open to commercial vessels for the duration of the ceasefire. Crude dropped 11%, and airline stocks popped across the board.

If this turns out to be the beginning of a sustained decline in oil prices from elevated levels—and I want to stress the word if—then history suggests we could be entering one of the most favorable entry points for airline stocks in years.

Global Travel Growth Is Still Outpacing the Economy

It’s worth pointing out that travel demand remains robust. The World Travel & Tourism Council (WTTC) reported this week that the global sector hit a record $11.6 trillion GDP contribution in 2025, growing nearly 50% faster than the overall global economy.

Here at home, the U.S. Travel Association estimates that larger tax refunds this year could pump an additional $5.1 billion into domestic leisure travel spending, with middle-income households driving the bulk of it.

Granted, airfares were up about 15% year-over-year in March, but as Southwest CEO Bob Jordan told ABC News this week, fares haven’t outpaced broader inflation since the pandemic. Consumers are still traveling.

The risk has always been on the cost side, specifically fuel. If the Hormuz reopening holds and crude continues to retreat from its recent highs, the cost pressure that’s been squeezing margins could ease substantially, and the airlines that have built premium, diversified revenue models would be in the best position.

Interested in investment opportunities in the airline industry? Shoot an email to [email protected] with the subject line “Airlines.”

Airlines and Shipping

Strengths

• The best performing airline stock for the week was Make My Trip, up 24.9%. In its most recent results, Korean Air passenger revenue was up 18% YoY. It is gaining share from Middle East carriers and benefiting from increased Chinese passengers to/from Korea. AI chips leaving Taiwan are increasingly being shipped via Korean Air cargo.
• FedEx and its pilots’ union reached a tentative labor agreement after nearly five years of negotiations, covering more than 5,000 pilots. The deal includes an immediate pay increase of nearly 40%, followed by 3% annual raises starting in 2028, along with back pay (up to $150,000 for captains and $102,500 for first officers) to account for delayed raises during negotiations, according to Morgan Stanley.
• In March, the number of U.S. citizen departures to international regions was down 2% YoY. For the first time since January 2025, non-U.S. citizen international arrivals into the United States entered positive territory, with March 2026 arrivals coming in at +1% YoY, according to Morgan Stanley.

Weaknesses

• The worst performing airline stock for the week was El Al Israel Airlines, down 6.4%. European airports face jet fuel shortages if the Strait of Hormuz is not fully reopened within three weeks, the industry has warned. ACI Europe, which represents EU airports, said jet fuel reserves are running low, while the impact of military activity on demand is further straining supplies, according to the Financial Times.
• This week, laden vessels from China to the U.S. were down sequentially (-2%) and decelerated on a YoY basis (-18% YoY). Data suggests TEUs coming into the Port of L.A. will be down next week (-4%), according to Goldman.
• Qantas is indicating that 90% of 2H26 Brent exposure is hedged, and it continues to provide confidence in fuel supply for the remainder of April/May. The company reduced 2H26 group capacity guidance to +3% YoY. Its A$150MM market buyback has not commenced due to uncertainty, according to Goldman.

Opportunities

• RBC sees BOND’s upsized $5 billion commitment (from $4B) as supporting two secular trends in private aviation, both positive for Bombardier: (1) demand for ultra-premium cabin offerings is outpacing supply in the super-midsize/large-cabin segment; and (2) alternative ownership models are capturing UHNW appetite for operational exclusivity over fractional volume plays.
• FedEx is searching for a new CFO as it replaces current EVP & CFO John Dietrich, who will step down June 1 and remain with the company until July 31. Bank of America believes the company will seek a CFO skill set to complement CEO Raj Subramaniam’s transformational moves at FedEx.
• United CEO Scott Kirby has pitched the idea of a merger with American Airlines to senior government officials, though it is unclear whether any formal process or proposal is underway. TD notes American would likely anchor to its unencumbered asset base of over $14 billion and push for a valuation above $20/share. Kirby also said JetBlue is too small to acquire. A United/American deal would create issues for Star Alliance and Oneworld alliances, with higher concentration in Washington D.C. and Chicago.

Threats

• Concerns that United Airlines’ looming ability to own a regional subsidiary and the long-term implications of a potential United/American Airlines merger could weigh on SkyWest’s shares. United’s tentative agreement with the union representing its flight attendants enables it to own a regional subsidiary, according to TD.
• Strait of Hormuz transits remain low (below 10% of normal), with flows likely to trend even lower following the U.S. blockade of Iranian ports beginning Monday. Red Sea transits have rebounded to 45% of normal over the past week due to rising oil exports, while container and car carrier transits remain subdued, reports Bank of America.
• CNBC and Bloomberg report that Spirit Airlines could liquidate as early as this week. Per Diio, Spirit represented 2% of ASMs for 2Q’26 (4% in 2Q’25). Fort Lauderdale (15% of Spirit’s 2Q ASMs), Orlando (11%), and Newark (8%) are its top airports. 10% of its fleet is in storage, with JetBlue and Frontier showing the highest overlap.

Luxury Goods and International Markets

Strengths

• Amazon shares moved higher after the company reported revenue for the first time from its AI business. In its annual shareholder letter, CEO Andy Jassy said AI services within Amazon Web Services are generating more than $15 billion in annualized revenue based on first-quarter performance—about 10% of AWS’s total revenue run-rate.
• U.S. initial jobless claims declined, pointing to continued stability in the labor market. According to the Labor Department, new filings for unemployment benefits fell by 11,000 to a seasonally adjusted 207,000 for the week ended April 11, coming in below economists’ expectations of 215,000. Reuters noted that claims have remained within a 201,000–230,000 range this year.
• The RealReal, a secondhand luxury goods retailer, was the best performing name in the S&P Global Luxury Index over the past five days. Shares climbed roughly 25%, significantly outperforming both peers and the broader index, driven primarily by renewed investor optimism around the resale market and improving profitability trends.

Weaknesses

• Three super luxury names, LVMH, Hermès, and Kering, reported sales misses this week. Hermès posted sales growth of 5.6%, below the 7.7% expected by consensus. Kering reported flat sales, while LVMH delivered sales growth of just 1%. The ongoing conflict in the Middle East and softer consumer spending, partly driven by travel disruptions, suppressed demand and weighed on profitability across the sector.
• China reported weaker export growth in March mainly due to slowing global demand and rising uncertainty linked to the Middle East conflict. Official customs data showed exports grew only 2.5% year over year, sharply down from more than 20% growth seen in January to February, and well below market expectations.
• Lucid Group, an electric car maker, was the worst performing name in the S&P Global Luxury Index. Shares declined roughly 14% over the past five days as continued concerns around cash burn, production scale, and soft EV demand weighed on investor sentiment for a second consecutive week.

Opportunities

• Shares of Hermès have declined more than 20% year to date, creating a potential buying opportunity for the super luxury company, which for years has led the industry in leveraging scarcity to drive profitability and brand desirability. The BofA research team noted that Hermès was the fastest growing luxury company in terms of organic revenue growth last year, and expects Hermès to deliver approximately 8% organic growth in 2026.

• Shares of Tesla are down 14% year to date, presenting a potential buying opportunity. The stock was recently upgraded to Hold from Sell by UBS. Elon Musk highlighted progress on Tesla’s next generation AI5 chip and related software updates, reaffirming the importance of the AI and robotaxi segment, now a key driver of the company’s growth outlook as electric vehicle sales have contracted.
• Recent talks between Iran and the U.S. have raised hopes of easing tensions, but markets remain volatile as investors weigh the risk that negotiations could stall or conflicts re escalate. Any concrete steps toward a deal could lift sentiment by reducing geopolitical risk and supporting travel demand during the busy summer months.

Threats

• Inflation in Europe picked up sharply in March, adding pressure to household budgets. According to Eurostat, euro area inflation rose to 2.6% year over year in March 2026, up from 1.9% in February, largely driven by a rebound in energy prices, where inflation jumped to nearly 5% following higher oil prices linked to Middle East tensions. Rising energy and services costs reduce consumers’ real purchasing power, which can weigh on discretionary spending.
• U.S. existing home sales came in weaker than expected in March, signaling continued softness in the housing market. According to the National Association of Realtors, existing home sales fell 3.6% month over month to a seasonally adjusted annual rate of 3.98 million units, below economists’ expectations of 4.06 million and marking a nine month low. Homebuilder stocks could further reflect the cautious housing backdrop. Shares of Toll Brothers declined in the past five days despite the company’s exposure to higher income buyers.
• Only a handful of luxury companies have reported first quarter results so far, and these have generally come in below expectations, mainly due to weakness in March linked to the Middle East conflict. In the coming weeks, results may show that this weakness is more broad based as additional companies report earnings. Next week, Moncler, L’Oréal, and Tesla are scheduled to release their results.

Energy and Natural Resources

Strengths

• The best performing commodity for the week was lithium carbonate, rallying 9.30%. The reopening of the Strait of Hormuz lifted the entire base metals complex, with aluminum, copper, nickel, and zinc all surging as supply fears eased. With geopolitical risk fading, copper is now being supported by a potential rate cut narrative alongside constrained mine supply.

• Three U.S. states are accelerating nuclear energy development, with New Jersey lifting a decades-old permitting moratorium, Kentucky establishing a new Nuclear Energy Development Authority with site readiness incentives, and Texas opening applications for $350 million in advanced nuclear construction funding. The moves reflect growing momentum behind nuclear as a reliable, clean energy source, with officials citing the need for increased supply and long-term cost savings.
• The Strait of Hormuz has reopened, sparking a relief rally across global markets and marking a turning point for the resource complex. Iran’s foreign minister confirmed the strait is fully open to commercial vessels following the Lebanon ceasefire, ending a 47-day blockade that disrupted global oil supply and drove prices sharply higher.

Weaknesses

• The weakest performing commodity of the week was WTI crude oil, losing 12.28%. Prices posted their largest weekly drop since August 2022 as ceasefire progress and U.S.-Iran talks eased the war premium, though ongoing tensions keep the outlook volatile.
• Ontario’s securities regulator has accused executives at Emerita Resources of diverting Brazilian lithium claims to Lithium Ionic Corp. while publicly stating Emerita had relinquished the project, sending both stocks down 38%–45%. The Ontario Securities Commission also alleges misleading disclosures tied to a Spanish zinc project, with a hearing scheduled for May 8.
• At least 600 Australian service stations have run out of fuel as disruptions near the Strait of Hormuz cut off roughly a fifth of global oil supply, leaving Australia with limited reserves. The government is lowering diesel standards and increasing penalties to A$100 million to address supply constraints and price concerns.

Opportunities

• Chinese clean tech manufacturers are benefiting from the Persian Gulf energy shock, with EV and hybrid exports doubling to a record 349,000 units in March and firms like Ningbo Deye forecasting profit growth of up to 70%. However, domestic EV sales have declined for a third straight month, raising concerns about underlying demand.
• Rolls-Royce SMR and Great British Energy – Nuclear have signed a contract to begin work on three small modular reactors in North Wales, supported by up to £599 million from the National Wealth Fund. The project is expected to reach a final investment decision in 2029, strengthening Rolls-Royce SMR’s position in Europe.
• Yancoal Australia has agreed to acquire an 80% stake in the Kestrel coking coal mine in Queensland for up to $2.4 billion, funded through cash and a $1.2 billion syndicated loan. The deal expands its footprint and reinforces its position as a leading coal producer in Australia.

Threats

• CATL’s Pentagon blacklist situation presents a strategic catch-22, as the clearest path off the list, proving it has no U.S. operations, conflicts with its growth ambitions. Despite strong earnings, including a 49% profit jump and 52% revenue growth, the designation limits U.S. expansion and clouds the outlook for Western battery supply chains reliant on its scale and technology.
• Shell confirmed an attack on its Pearl gas-to-liquids facility in Qatar, with LNG production shut down since early March as damage is assessed alongside QatarEnergy and local authorities. The incident highlights the vulnerability of a hub responsible for roughly 20% of global LNG trade, raising concerns about a prolonged supply gap.
• The IMF cut its 2026 global growth forecast to 3.1% and raised inflation to 4.4%, signaling a stagflationary backdrop that could pressure commodity demand. In a severe scenario, growth could fall to 2.0% with inflation above 6%, risking a sharper slowdown.

Bitcoin and Digital Assets

Strengths

• Institutional adoption continues to deepen as Charles Schwab, one of the largest U.S. brokerage firms with over $12.2 trillion in client assets, rolls out direct spot trading for Bitcoin and Ether to retail investors. The offering allows clients to trade crypto alongside traditional assets within Schwab’s existing platforms, lowering barriers to entry for mainstream investors. At launch, the service will charge a 0.75% transaction fee and initially support BTC and ETH, with plans to expand further.
• Momentum is building around the U.S. crypto regulatory framework, with JPMorgan indicating that the CLARITY Act is nearing completion as negotiations have narrowed from roughly a dozen contentious issues to just 2–3 remaining. The legislation aims to define how digital assets are regulated, including oversight between the SEC and CFTC and the treatment of stablecoins and DeFi. A clear and unified rulebook could unlock broader adoption, strengthen market structure, and accelerate the integration of crypto into the U.S. financial system.
• Institutional adoption of blockchain continues to strengthen as Ripple, a U.S.-based digital asset infrastructure firm focused on payments and custody solutions, partners with Kyobo Life Insurance, one of South Korea’s largest life insurers, to tokenize government bond settlement. The initiative aims to compress the traditional T+2 settlement cycle into near real-time execution, improving efficiency in a key segment of financial markets. While still in pilot stages, the collaboration highlights how established financial institutions are actively exploring blockchain for core operations.

Weaknesses

• Bitcoin continues to face strong resistance, failing again to break above the $75,000–$76,000 range and dropping nearly 2% to around $73,500 in intraday trading. This level remains a key psychological barrier, reinforcing doubts about Bitcoin’s ability to sustain a move back toward $90,000.

• Uncertainty around U.S. financial leadership and transparency is adding pressure to the crypto outlook, as Fed chair nominee Kevin Warsh disclosed over $100 million in assets but did not specify the value of several crypto-related investments. With key regulatory bodies like the SEC and CFTC facing leadership gaps, this lack of clarity may slow decision-making and weigh on institutional confidence.
• Security and operational risks remain a concern in parts of the crypto ecosystem, as Grinex, a Kyrgyzstan-based exchange linked to sanctioned Russian activity, halted operations after a cyberattack drained approximately $13 million from its systems. The breach left users unable to access funds, highlighting vulnerabilities in less regulated markets.

Opportunities

• Morgan Stanley’s entry into spot bitcoin ETFs is accelerating institutional adoption, with its MSBT fund attracting over $100 million in inflows in its first week, driven by a low 0.14% fee. While still smaller than BlackRock’s IBIT, which has surpassed $53 billion, the launch highlights growing demand and is prompting competitors like Goldman Sachs to develop new bitcoin-linked products.
• Bitcoin is showing a potential bullish signal as funding rates fall to around -0.005%, their most negative level since 2023, reflecting a surge in short positions. Despite this, BTC has climbed from the low $60,000s to nearly $75,000, suggesting resilience and increasing the likelihood of a short squeeze.
• South Korea is advancing blockchain adoption, with its Ministry of Economy and Finance planning to pilot tokenized deposit payments for government spending in Q4 2026. The initiative aims to improve efficiency and reduce costs by using programmable tokens, potentially scaling nationwide if successful.

Threats

• The potential launch of a yuan-backed stablecoin highlights growing geopolitical competition in digital finance as stablecoins become core global payment infrastructure. With the market nearing $315 billion and dominated by dollar-pegged tokens like USDT and USDC, a state-backed yuan alternative could challenge that dominance while expanding government control over cross-border transactions. The shift is notable given China’s 2021 ban on crypto trading and mining, signaling a strategic pivot toward controlled digital assets. However, strict capital controls and limited currency convertibility remain key barriers, raising the risk of a more fragmented and state-driven global financial system.
• The U.K.’s Financial Conduct Authority is tightening crypto rules, expanding custody definitions to include firms holding client assets for more than 24 hours during settlement. Companies may need full safeguarding licenses or face penalties, with a five-month application window from September 30, 2026 to February 28, 2027. Missing this deadline could result in fines, suspensions, or even permanent closure. As regulators move toward stricter oversight under the Financial Services and Markets Act, the increased compliance burden could slow innovation and create operational risks across the crypto ecosystem.
• A recent exploit involving Hyperbridge, a blockchain protocol that enables the transfer of assets between different networks (known as a cross-chain bridge), highlights ongoing security challenges in the crypto ecosystem. Losses were initially estimated at around $237,000 but were later revised up to approximately $2.5 million after a broader review. The attacker was able to exploit a flaw to create and sell nearly 1 billion tokens across multiple networks, forcing the platform to pause operations. Recovery could take months or even up to a year. This incident reflects a broader issue, with more than $2.8 billion lost to crypto exploits over the past two years, underscoring persistent risks in digital asset infrastructure.

Defense and Cybersecurity

Strengths

• MilDef shares jumped after the company said its first‑quarter results will be well ahead of expectations. Order intake reached roughly 1.05–1.10 billion Swedish kronor, far exceeding forecasts and coming in sharply higher than a year ago. First‑quarter revenue is expected to be around 700 million Swedish kronor, comfortably above market expectations and up strongly from last year. On the back of the better‑than‑expected performance, the company issued a positive profit warning, signaling that earnings will also exceed prior estimates.

• RTX Corporation’s Raytheon unit secured a $3.7 billion contract to supply Patriot interceptors to Ukraine, marking a strategic shift to long-term procurement and enhancing Ukraine’s aerial defense capabilities.
• Lockheed Martin secured a $4.76 billion U.S. Army contract for PAC‑3 MSE missiles and support, largely funded through $4.49 billion in foreign military sales, with additional U.S. funding to boost domestic stockpiles. The deal runs through June 2030 as global demand accelerates, prompting Lockheed to triple PAC‑3 MSE production and expand its supply chain with European partners.

Weaknesses

• Recent reporting shows that this week Russia launched one of its largest combined missile and drone barrages of the year across multiple Ukrainian cities, including Kyiv, Odesa and Dnipro, striking residential areas and civilian infrastructure and killing at least a dozen civilians, including children, with more than a hundred injured.
• Microsoft faced criticism after Azure data‑center outages caused by power and cooling failures disrupted customer workloads. The incidents highlighted how fast‑growing AI demand is stressing hyperscale infrastructure and reliability planning.
• In Northern Virginia, about 60 data centers simultaneously disconnected from the power grid after voltage disturbances. Regulators warned the mass switch to backup generators exposed a serious risk of regional grid instability.

Opportunities

• Baylor University has opened the Arctic Acclimatization & Sleep Optimization (ARKTOS) Research Center in Texas to study how extreme cold and high‑altitude conditions affect U.S. warfighters and first responders, using a controlled chamber that simulates subzero temperatures and reduced oxygen. Backed by federal funding, the facility tracks cognitive performance, sleep disruption and injury risk during realistic operational simulations, with a second phase planned for 2026 to add motion platforms that replicate Arctic ground and air transport.
• Australia will boost spending on drones by up to $3.6 billion in response to shifts in warfare seen in the Middle East, Defence Minister Richard Marles said Tuesday.
• California-based AEVEX Aerospace is preparing for a stock market debut, targeting a valuation of up to $2.35 billion as it moves toward a listing on the New York Stock Exchange

Threats

• Turkish Foreign Minister Hakan Fidan said on Monday that Israel “cannot live without an enemy” and its government was now trying to portray Turkey as one. Tensions between Turkey and Israel have steadily escalated since the Gaza war erupted following Hamas’s October 7, 2023, cross‑border attack in Israel.
• Reports during the Iran war revealed that Tehran secretly acquired a high‑resolution Chinese-built satellite and used its imagery, alongside cyber and other intelligence streams, to identify and assess U.S. military targets before and after missile and drone strikes, underscoring the growing militarization of commercial geospatial intelligence.
• U.S. federal agencies warn that Iranian‑affiliated cyber actors are actively exploiting internet‑connected Rockwell Automation PLCs, exposing thousands of devices and putting critical infrastructure especially the agricultural and food supply chain at risk. A joint advisory says some attacks have already caused operational disruptions and financial losses and could further disrupt harvesting, fertilizer and feed supplies, and food processing if not urgently mitigated.

Gold Market

This week gold futures closed the week at $4,868.30, up $80.90 per ounce, or 1.69%. Gold stocks, as measured by the NYSE Arca Gold Miners Index, ended the week higher by 0.89%. The S&P/TSX Venture Index came up 6.27%. The U.S. Trade-Weighted Dollar fell 0.46%.

Strengths

• The best performing precious metal for the week was silver, up 6.20%. According to Canaccord, K92 Gold production beat estimates at 46,700 ounces versus 42,800 ounces, marking a strong start to 2026 as the company progresses toward full-year guidance of 190,000–225,000 ounces.

• Union Bancaire Privée is buying gold again after cutting a significant position in response to an Iran war-induced slump, saying the long-term outlook remains intact. The Swiss private bank is gradually adding bullion back to discretionary client portfolios after reducing exposure to 3% from around 10%, according to Bloomberg.
• Orla’s quarter first quarter of 81,206 ounces of gold exceeded BMO’s expectations of 76,000 ounces due to stronger output at Musselwhite. The company remains on track to meet annual guidance of 340,000–360,000 ounces and continues to show consistent performance with higher grades expected in the second half.

Weaknesses

• The worst performing precious metal for the week was gold, still up 1.69%. Gold’s 2% move following the reopening of the Strait of Hormuz masks a more complex picture, as the metal has shed nearly 8% since the Iran war began and remains sensitive to shifts in rates and the U.S. dollar.
• According to the latest Indian trade data, rough diamond import volumes decreased 31% year-over-year (YoY) and 1% month over month, while values fell 45% YoY and 10% month over month. Polished diamond export volumes fell 26% YoY and 20% month over month, while export values declined 27% YoY and 38% month over month, pointing to ongoing destocking pressures, according to Morgan Stanley.
• The ceasefire and reopening of the Strait of Hormuz have eased Europe’s inflation concerns, with energy prices falling and rate hike expectations unwinding. German yields and inflation swaps are cooling, giving the ECB and BOE more flexibility to remain measured.

Opportunities

• ASX gold sector forward PE has contracted to 10x as consensus earnings estimates have risen on higher gold prices. In prior gold bull markets, sector PE contracted to around 15x as markets priced in peak earnings. Gold equities are now trading at 0.6x the ASX200 on a relative PE basis, the lowest since prior cycles, compared with 1.9x at the 2011 peak, according to Bank of America.
• CLSA sees gold regaining $5,500/ounce in the medium term and upgraded its 2026, 2027, and 2028 price forecasts to $4,840, $5,130, and $5,500/ounce, respectively. It also raised its long-term assumption to $3,500/ounce, citing gold sector cost inflation and continued growth in U.S. money supply.
• OR Royalties announced it has entered into a binding agreement with Canadian Copper for a $28 million precious metals stream on the company’s New Brunswick assets, including the Murray Brook and Caribou properties and the Caribou processing plant. Operations could begin in late 2028, with BMO modeling first production in 2029.

Threats

• The CUSMA rapid response mechanism is doing exactly what it was designed to do, creating real legal and reputational pressure on a Canadian company for labor violations in Mexico, but the cartel angle elevates this from a labor dispute to potential criminal liability territory. Orla Mining’s exposure is compounding, with a formal panel finding of employer interference, an active security review, calls for a criminal complaint under Canada’s terror designation of the Sinaloa cartel, and a stalled Canadian federal complaint that could still be activated.
• Western Australia is considering a strategic diesel stockpile paid for by the state after the Iran war led to shortages for key industries such as farming and mining. Energy Minister Amber-Jade Sanderson said the reserve would be directed at areas of need at the discretion of the state government, with more details expected in the coming weeks.
• Evolution Mining’s third quarter fiscal year 2026 result was slightly weaker than consensus, with weather impacts at Ernest Henry continuing after a prior quarter disruption. Production rates and all-in sustaining costs softened, though guidance was maintained and the company expects improved performance in the fourth quarter, according to CLSA.

U.S. Global Investors, Inc. is an investment adviser registered with the Securities and Exchange Commission (“SEC”). This does not mean that we are sponsored, recommended, or approved by the SEC, or that our abilities or qualifications in any respect have been passed upon by the SEC or any officer of the SEC.

This commentary should not be considered a solicitation or offering of any investment product. Certain materials in this commentary may contain dated information. The information provided was current at the time of publication. Some links above may be directed to third-party websites. U.S. Global Investors does not endorse all information supplied by these websites and is not responsible for their content. All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor.

Holdings may change daily. Holdings are reported as of the most recent quarter-end. The following securities mentioned in the article were held by one or more accounts managed by U.S. Global Investors as of (03/31/2026):

Amazon

LVMH

Hermes

Kering

Tesla

Moncler

L’Oreal

FedEx Corp.

Qantas Airways

Bombardier Inc.

United Airlines

American Airlines

JetBlue Airways Corp.

SkyWest Inc.

Frontier Group Holdings Inc.

Delta Air Lines

Southwest Airlines

Alaska Air Group

JetBlue Airways

Frontier Group Holdings

Air France-KLM

Deutsche Lufthansa

MilDef Group

RTX Corp.

Lockheed Martin

Yancoal Australia

OR Royalties Inc.

Orla Mining Ltd.

Evolution Mining Ltd.

*The above-mentioned indices are not total returns. These returns reflect simple appreciation only and do not reflect dividend reinvestment.

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The Philadelphia Stock Exchange Gold and Silver Index (XAU) is a capitalization-weighted index that includes the leading companies involved in the mining of gold and silver. The U.S. Trade Weighted Dollar Index provides a general indication of the international value of the U.S. dollar. The S&P/TSX Canadian Gold Capped Sector Index is a modified capitalization-weighted index, whose equity weights are capped 25 percent and index constituents are derived from a subset stock pool of S&P/TSX Composite Index stocks. The NYSE Arca Gold Miners Index is a modified market capitalization weighted index comprised of publicly traded companies involved primarily in the mining for gold and silver. The S&P/TSX Venture Composite Index is a broad market indicator for the Canadian venture capital market. The index is market capitalization weighted and, at its inception, included 531 companies. A quarterly revision process is used to remove companies that comprise less than 0.05% of the weight of the index, and add companies whose weight, when included, will be greater than 0.05% of the index.

The S&P 500 Energy Index is a capitalization-weighted index that tracks the companies in the energy sector as a subset of the S&P 500. The S&P 500 Materials Index is a capitalization-weighted index that tracks the companies in the material sector as a subset of the S&P 500. The S&P 500 Financials Index is a capitalization-weighted index. The index was developed with a base level of 10 for the 1941-43 base period. The S&P 500 Industrials Index is a Materials Index is a capitalization-weighted index that tracks the companies in the industrial sector as a subset of the S&P 500. The S&P 500 Consumer Discretionary Index is a capitalization-weighted index that tracks the companies in the consumer discretionary sector as a subset of the S&P 500. The S&P 500 Information Technology Index is a capitalization-weighted index that tracks the companies in the information technology sector as a subset of the S&P 500. The S&P 500 Consumer Staples Index is a Materials Index is a capitalization-weighted index that tracks the companies in the consumer staples sector as a subset of the S&P 500. The S&P 500 Utilities Index is a capitalization-weighted index that tracks the companies in the utilities sector as a subset of the S&P 500. The S&P 500 Healthcare Index is a capitalization-weighted index that tracks the companies in the healthcare sector as a subset of the S&P 500. The S&P 500 Telecom Index is a Materials Index is a capitalization-weighted index that tracks the companies in the telecom sector as a subset of the S&P 500.

The Consumer Price Index (CPI) is one of the most widely recognized price measures for tracking the price of a market basket of goods and services purchased by individuals. The weights of components are based on consumer spending patterns. The Purchasing Manager’s Index is an indicator of the economic health of the manufacturing sector. The PMI index is based on five major indicators: new orders, inventory levels, production, supplier deliveries and the employment environment. Gross domestic product (GDP) is the monetary value of all the finished goods and services produced within a country’s borders in a specific time period, though GDP is usually calculated on an annual basis. It includes all private and public consumption, government outlays, investments and exports less imports that occur within a defined territory.

The S&P Global Luxury Index is comprised of 80 of the largest publicly traded companies engaged in the production or distribution of luxury goods or the provision of luxury services that meet specific investibility requirements.

The S&P Composite 1500 Airline Index is a subset of the S&P Composite 1500 designed to track the performance of US passenger airline companies.

The NYSE Arca Global Airline Index is a modified equal-dollar weighted index designed to track the performance of highly capitalized and liquid international passenger airline companies.

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