Public Markets 3d Briefing
×Market Turmoil and Oil Shock
The S&P 500 suffered its worst week since April, with the Dow industrials falling 3% as surging oil prices and a shrinking labor force rattled investors. Energy markets were rocked by the outbreak of war in the Persian Gulf, where roughly one-fifth of the world's oil supply originates. Goldman Sachs bloomberg.com is steering clients to buy HALO, or "hard assets, low obsolescence" stocks, while Bank of America is recommending a geopolitical basket of defense contractors as Wall Street trading desks rewrite their playbook on the US-Iran war.
Oil Prices and Energy Markets
Oil prices bloomberg.com remain far below levels seen in previous crises despite one of the biggest ever disruptions to global energy markets. However, a growing chorus of energy executives and traders warns that triple-digit oil prices are possible if the Iran war extends. Former US Energy Secretary Ernest Moniz bloomberg.com sees multiple options on the table but acknowledges the potential for significant price spikes. Ships in the Gulf ft.com are declaring themselves Chinese to dodge attack, while isolated Russian LNG tankers bloomberg.com are avoiding the Mediterranean after alleged Ukrainian drone attacks.
Jobs Report and Economic Data
The US jobs report bloomberg.com delivered a shock as employers unexpectedly cut jobs in February, with nonfarm payrolls falling 92,000 and the unemployment rate rising. White House National Economic Council Director Kevin Hassett bloomberg.com called the loss an "outlier," citing bad weather impacts. Cleveland Fed President Beth Hammack bloomberg.com expects interest rates to be on hold for quite some time, while Fed's Collins investing.com sees no urgency for rate cuts amid inflation concerns. Treasury yields bloomberg.com climbed to their highest levels in several weeks as rising oil prices ignited inflation expectations and dented the outlook for Federal Reserve interest-rate cuts.
Corporate and Investment News
Oracle ft.com and OpenAI scrapped a deal to expand their flagship Texas data center, with Meta now in talks to take up the additional computing capacity. AI chipmaker Cerebras bloomberg.com has picked Morgan Stanley to lead its initial public offering as it mounts a renewed attempt to go public. Millennium Management bloomberg.com hired four stock pickers from rival Citadel as the multistrategy hedge fund giants battle over talent. BlackRock bloomberg.com slashed the value of a private loan to zero, marking the second sudden wipeout to recently hit its portfolio.
Geopolitical Developments
Iran's Revolutionary Guards yahoo.com challenged Trump to have the US Navy escort oil tankers through the Strait of Hormuz. Saudi Arabia investing.com is increasing diplomatic efforts with Iran to contain the conflict. Russia yahoo.com has provided Iran with information that can help Tehran strike US military targets, according to AP sources. The US launched a $20 billion reinsurance plan bloomberg.com aimed at reviving shipping in the Strait of Hormuz, where traffic has all but stopped amid US and Israeli attacks on Iran.
Market Structure and Regulation
The New York Stock Exchange bloomberg.com agreed to pay $9 million to settle SEC allegations that an internal malfunction led to a botched market open and wild price swings. SEC and CFTC bloomberg.com are discussing plans to move into the same building complex in Washington just steps from the US Capitol. The SEC would like you to stop filing for 5x leveraged ETFs bloomberg.com as resistance mounts at the regulatory agency.
Asian and Emerging Markets
Asian high-yield dollar bonds bloomberg.com are getting disproportionately hit compared with global peers as the escalating Iran conflict underscores the region's reliance on imported energy. Thailand's farmers bloomberg.com are racing for diesel while Indian refinery executives monitor the Persian Gulf through the night. Emerging-market ETFs bloomberg.com are still attracting money even as markets convulsed, indicating confidence that the war in the Middle East won't roil risk assets. China plans $44 billion bonds bloomberg.com to boost capital at top banks as Beijing expands efforts to fortify the nation's $69 trillion financial system.
Technology and Innovation
Chinese ham producers and real-estate companies wsj.com are jumping on the artificial-intelligence bandwagon, pouring millions of dollars into semiconductor companies. OpenAI held talks with The Trade Desk investing.com to sell ads, according to The Information. Kalshi and Polymarket are each eyeing roughly $20 billion valuations as rival prediction markets speak with investors about roughly doubling their previous valuations.
Private Markets and Credit
Private debt should face a 'full-blown default cycle' bloomberg.com, according to Pacific Investment Management Co., as direct-lending vehicles have loosened their underwriting standards and are due for a stress test. Secondary buyers are eyeing private-credit assets as redemptions mount, with a rise in discounted secondary deals expected as some wealthy investors seek exits from interval funds and BDCs. A group of Kennedy-Wilson bondholders bloomberg.com is organizing to push back on the company's tender offer, planning to skip the debt exchange offer and instead seek a cash payment.
Labor and Industrial News
South Korean EV battery maker SK bloomberg.com is laying off 958 workers in Georgia as the company navigates a slowdown in electric vehicle sales. Record numbers of workers wsj.com are raiding their 401(k) savings amid a divergent economy that has given people record retirement savings and more need to dig into them. Wood Group was fined £13 million ft.com for overstating three years of profits after an FCA investigation found the engineering group's "poor operating culture" led to accounting errors.
Shipping and Trade Disruptions
The tally of ships able to store oil bloomberg.com from big Middle East producers is dwindling fast, with just nine empty very large crude carriers visible in the Persian Gulf. Once those are loaded, onshore storage will be the only option. In a desperate bid to transport oil from the US Gulf Coast to Asia, shippers have taken the unusual step of booking smaller vessels as costs soar for the massive tankers typically used. Middle East conflict is stranding ships ft.com with cargoes of fresh food and live animals as shipping companies struggle to reroute vessels and disruption starts to cause congestion at ports outside the Gulf.