UAE exits OPEC

Welcome to Seeking Alpha's Wall Street Lunch, our afternoon update on today's market action, news, and analysis. Good afternoon. Today is Tuesday, April 28th, and I'm your host, Kim Kahn. Our top story so far, the United Arab Emirates said it will exit OPEC and OPEC Plus effective May 1st, a surprise move that caught the oil market off guard. In a statement, the UAE's Energy Ministry said the decision followed a comprehensive review of its production policy and future capacity, and it was based on our national interest and our commitment to contributing effectively to meeting the market's pressing needs. The government said it seeks greater flexibility in managing oil output. OPEC membership requires adherence to collective production targets, which can constrain individual capacity. The UAE has expanded its production capacity to nearly 5 million barrels per day and is aiming to utilize more of that output outside OPEC quotas. Additional supply could reach as much as 1 million barrels per day. Gregory Brew, senior analyst for Iran and oil at Eurasia Group, said the move reflects a broader breakdown in oil market stability. He declared the Carter Doctrine essentially dead, noting that tankers are being seized or attacked on open seas, OPEC members are breaking off to produce what they want, SPRs are being drained. Any and all forces that were able to produce market stability are falling by the wayside, Brew added. Among active stocks, shares of OpenAI partners SoftBank Group and Oracle are under pressure after the Wall Street Journal reported that the maker of ChatGPT recently missed internal targets for sales and new users. But in a statement to CNBC, OpenAI CEO Sam Altman called the report ridiculous, adding that the company is totally aligned on buying as much compute as we can. Coca is among the top S 500 gainers after topping organic revenue estimates Organic revenue rose 10 versus a 7 consensus driven by strength in North America and Europe Middle East and Africa And Corning shares are lower after the company guided Q2 sales to billion, below analyst estimates of $4.67 billion. In other news of note, billionaire investor Ray Dalio is warning that proposed wealth taxes could destabilize markets, particularly as structural economic shifts accelerate. Dalio, who remains optimistic about the transformative potential of artificial intelligence, said AI is likely to boost productivity and lower long-term costs. But he cautioned that those gains may also bring significant disruption, including job displacement and a widening wealth gap between asset owners and the broader population. That imbalance is where policy risk emerges. Wealth taxes, designed to redistribute accumulated assets, could inadvertently create market stress. Unlike income, wealth is often tied up in illiquid assets such as equities, real estate, or private investments. To meet tax obligations, investors may be forced to liquidate portions of those holdings. And in the Wall Street Research Corner, semiconductor stocks have been rallying at a pace not seen since the dot-com boom. Turning Point Market Research's Dean Christians noted that during the late 1990s peak in internet services, there were 15 instances when the sector's 18-day rate of change exceeded 36%. Semis are now approaching that same threshold fueled largely by AI CapEx and data center demand. While the dot-com era featured multiple powerful surges before the eventual peak, the comparison underscores just how compressed and intense the current ship rally has become. That's all for today's Wall Street Lunch. Look for links for stories in the show notes section. Don't forget, these episodes will be up with transcriptions at seekingalpha.com slash WS&E. And for a full suite of news, analysis, ratings, and data on stocks and ETFs, go to seekingalpha.com slash subscriptions.