Smartkarma Daily Briefs

• Our intermediate-term outlook remains bearish/cautious, and we continue to believe a prolonged downturn is likely, which has been the case since our 4/1/25 Compass. However, shorter-term…
• SPX is now 4.5%-5.0% lower than last week (when we said to expect the rally to fizzle), and is testing 5100-5120 support.
• 5100-5120 has been a key level several times dating back to early 2024, and is a level to trade against to the long side.

• Lagged results: Q1 EPS surged 171% QoQ on aluminum price strength, offsetting alumina softness; EBITDA rose to $855M despite weaker volumes.
• Tariff overhang: $105M quarterly drag from Section 232 now embedded; net annual impact ~$100M—yet Midwest premium offsets buffer U.S. exposure.
• Trading near book at 1.04x P/B—cycle pessimism and policy risks may present contrarian upside.

• Recent performance and legal overhangs make this quarter interesting and more unpredictable.
• We provide a detailed analysis of price patterns, implied vol and the earnings implied jump in GOOGL options compared to historical outcomes.
• The implied move looks rich relative to long-term averages—but more in line with recent quarters.

• Global base oils prices stay firm vs feedstock/competing fuel prices.
• Firm base oils margins point to tight supply and strong demand.
• Firm base oils margins incentivize refiners to raise base oils output.

• Asia’s Group II base oils prices hold firm relative to prices in regional markets like northeast Asia so far this year.
• Asia’s Group II base oils prices hold firm relative to prices in more distant markets like Americas so far this year.
• Asia’s firm prices complicate arbitrage, reflecting tighter-than-usual regional supply late last year and in early-2025.

• Market inefficiencies persist in crypto markets, particularly in cross-exchange arbitrage and futures basis trading
• Traditional factor models can be adapted for cryptocurrency markets with size, momentum, and liquidity factors showing statistical significance
• On-Chain metrics provide unique alpha signals unavailable in traditional markets

Wheaton Precious Metals’ (WPM’s) Q125 financial results are scheduled for release on Thursday 8 May, after the market close in Toronto. Ahead of the release, we have updated our forecasts to reflect, in particular, an increase in production from Salobo from 60,109oz to 73,655oz, in line with the volume of copper produced according to Vale’s Q125 production report, released on 15 April. We have also assumed no further inventory build in Q1, after a 27,535oz gold equivalent increase in Q424 (against the historical trend). Including an adjustment for prices as well, these changes have resulted in a 17.4% increase to our Q125 adjusted EPS estimate and a 10.7% increase to our FY25 estimate.

• On April 17, 2025, Ring announced that 1Q25 oil production exceeded the high end of guidance and that total production exceeded the midpoint of guidance.
• For 1Q25, the oil production guidance range was 11,700-12,000 Bo/d and the midpoint total production guidance was 18,250.
• Since oil represents more than 95% of total revenue, the oil outperformance has an outsized revenue impact.

• We are reiterating our Buy rating, projections and $58 price target for Build-A-Bear Workshop after visiting stores in Long Island and Connecticut.
• We believe the later Easter (April 20th versus March 31st last year) was a material positive for the company, driving higher sales of multiple Easter related items and allowing for Build-A-Bear to flow in more newness, leverage their Mini Beans offerings, expand the licensed products and add new “furry friends” to the mix.
• As such, we believe Build-A-Bear, in a period of materially negative investor sentiment on the consumer, is poised to drive solid overall 1QFY25 results, and, with BBW trading under 9X our FY26 EPS and offering a dividend yield of over 2.5%, offer a compelling risk/reward for investors; we reiterate our Buy rating and $58 price target.

• US domestic Group II base oils price premium to feedstock prices holds at more elevated levels.
• Firm base oils margins incentivize refiners to maintain higher production levels.
• Outright US domestic Group II prices fall in April 2025, at a time of year when prices typically hold steady or rise.