Public Markets 3d Briefing
×Market Volatility Amid Middle East Conflict
US stock futures bloomberg.com pointed to a down day to end a volatile week, as soaring oil prices and the specter of energy supply shocks from a protracted war in the Middle East fanned inflation fears. The S&P 500 wsj.com futures dipped as oil headed for its biggest weekly gain since the early Ukraine war. Stuart Kaiser bloomberg.com, head of equity trading strategy at Citi, examined how equity markets have fared during the first days of the war with Iran.
Peter Oppenheimer bloomberg.com, chief global equity strategist at Goldman Sachs, said stocks may suffer a correction but called it "nothing systemic." Dawn Fitzpatrick bloomberg.com, CIO of Soros Fund Management, warned investors face a "painful" 18 to 24 months as markets grapple with geopolitical risks. Yardeni investing.com predicted markets face a 10% correction, up to 15% if the Hormuz blockade holds.
Oil Market Turmoil
Kuwait wsj.com cut oil production as storage fills up, signaling a broader storage crisis that poses new risks to the global market. Russia's flagship crude blend bloomberg.com remained trading at deep discounts despite the global oil rally driven by Middle East escalation. A US-sanctioned tanker bloomberg.com blacklisted for handling Iranian liquefied petroleum gas crossed the Strait of Hormuz on Friday, one of only a handful of vessels to make it through the waterway in recent days.
The International Energy Agency bloomberg.com said it sees no need yet to release emergency oil stockpiles amid the Middle East crisis, as global oil supplies are plentiful. Russian oil bloomberg.com remained cheap even as war threatens global supplies, with Indian refiners snapping up Moscow's barrels after Middle East flows have bottled up in the Persian Gulf.
Economic Data and Consumer Trends
Retail sales wsj.com sagged in January, the Commerce Department said, extending a tepid trend for US shopping since late last year. Large-cap consumer discretionary companies bloomberg.com posted their weakest earnings season in almost six years, as high fixed costs, softer demand and still-elevated prices weighed on results.
US nonfarm payroll employment investing.com unexpectedly fell in February, while treasuries bloomberg.com rallied after a disappointing payroll report boosted expectations for Federal Reserve interest-rate cuts this year. Fed's Waller bloomberg.com said the Iran war is "unlikely to cause sustained inflation," viewing the oil price shock as temporary.
Corporate and Financial Developments
BlackRock ft.com limited redemptions at its private credit fund as outflows swelled, taking the decision after withdrawal requests at its flagship HPS Corporate Lending Fund surged to 9.3% of net asset value. State Street's Hung bloomberg.com said market reaction to the war with Iran "is not expected" as she sees a flight to safe-haven assets.
Credit investors bloomberg.com are unwinding long positions worth tens of billions of dollars and jumping into hedging trades. Banks bloomberg.com are issuing significant risk transfers at a record pace as they use the tool to hedge a wider range of loans, including leveraged buyouts and fund financing.
Regional Market Impact
Canadian equities bloomberg.com stumbled on Tuesday by the most since April's tariff-fueled market rout, as an escalating war in the Middle East unnerved investors who exited even traditional safe havens like gold. Thai stocks bloomberg.com plunged most in six years on Middle East conflict concerns.
Global funds bloomberg.com pulled money from Asia at the fastest pace in years as the escalating conflict in Iran triggered a reassessment of risk across global markets. Taiwan's Foxconn finance.yahoo.com said everyone will feel impact of prolonged Iran conflict.
Safe Haven Assets
Gold wagers bloomberg.com hit a 16-week high as risk-off sentiment grew amid Middle East tensions. UBS investing.com is telling clients to sell downside in gold and silver, though the strategy's implications remain debated. World food prices wsj.com rose for the first time in five months, according to the UN FAO, though prices remained 1% below year-earlier levels.
Geopolitical Developments
The Israel Defense Forces bloomberg.com said it's demolished a majority of Iran's ballistic-missile launchers, causing the number of missiles targeting Israel and other countries in the region to fall throughout the conflict. A top American admiral yahoo.com in the Middle East said the US struck an Iranian drone carrier, reporting "it's on fire."
Turkey yahoo.com said NATO defenses destroyed an Iran missile, risking war expansion. Indonesian President Prabowo bloomberg.com offered to mediate in the Iran conflict, backed by countries including Pakistan and the UAE. South Africa's finance minister bloomberg.com sounded the alarm over oil spike, warning sustained higher prices may fuel inflation.
Corporate Legal and Regulatory Issues
Western Alliance ft.com sued Jefferies for fraud tied to First Brands loans, filing the lawsuit in New York state court. Blue Owl Capital has £36 million exposure to Century Capital Partners, a London-based property lender that filed for administration last month.
Costco wsj.com is evaluating the possibility of tariff refunds as second-quarter revenue rises, with plans to pass on savings to shoppers through lower prices if the warehouse retailer manages to land a windfall. US companies ft.com are being denied refunds on Trump's illegal tariffs, with customs officials rejecting attempts to reclaim duties struck down by the Supreme Court.