Public Markets 3d Briefing
×Market Turmoil Amid Middle East Conflict
Oil prices surged above $90 a barrel, marking their sharpest weekly gains on record as the Iran conflict intensified. The S&P 500 wsj.com slid after a weak jobs report, while the WSJ Dollar Index wsj.com rose 1.08% to 95.71. BofA investing.com flagged large CTA selling in both the S&P 500 and Nasdaq last week, adding to market pressure.
Large-cap consumer discretionary companies bloomberg.com posted their weakest earnings season since 2020, as high fixed costs and softer demand weighed on results. Meanwhile, energy price shocks investing.com are hitting Asia hardest, followed by Europe and the US, according to Morgan Stanley.
Geopolitical Developments
Finland's President Alexander Stubb sees no strategic end game for the Iran conflict, doubting mediation will ease tensions. Trump vowed to hit Iran hard after Israel launched air attacks, posting on Truth Social that "Today Iran will be hit very hard!" Russia and Iran are confirmed to be sharing intelligence, raising concerns about Moscow's military cooperation with Tehran.
Kuwait investing.com confirmed reports of oil production cuts, while Saudi Arabia bloomberg.com intercepted drones heading toward the Shaybah oil field. The Strait of Hormuz transit remains near a standstill for a sixth day, with Iran-linked tankers the only large vessels making the crossing.
Economic Impact
Energy price shocks from the Iran war could lift US inflation, though persistence is key, Barclays warns. Morgan Stanley investing.com says the shock risks pushing EUR/USD toward the 1.13 floor. UK lenders ft.com raised mortgage rates amid warnings over inflation and energy prices, as market mood "completely changed" following the Middle East war outbreak.
Coal prices ft.com jumped as utilities seek alternatives to gas, raising prospects of restarting mothballed coal power plants. Adani Total Gas bloomberg.com tripled prices for large industrial users as war disrupts supply. Australian mining heavyweights investing.com slipped on ex-dividend trade amid the volatility.
Corporate & Financial News
BlackRock faces market angst as retail private-credit hopes run into headwinds after its $12 billion HPS Investment Partners acquisition. Amazon investing.com secured a landmark $138 billion AWS deal as OpenAI bets on Trainium chips. Novo Nordisk bloomberg.com and Hims ended their feud, planning to sell obesity drugs together.
Google ft.com gave CEO Sundar Pichai a new pay deal worth up to $692 million, including stock options tied to Waymo's growth. Nvidia investing.com tied CEO Jensen Huang's $4 million bonus to 2027 revenue milestones. Costco finance.yahoo.com took a big step to fix one of members' biggest complaints.
Technology & Innovation
Stablecoin firms are betting big on AI agent payments that barely exist, with Circle and Stripe racing to build systems for autonomous transactions. China investing.com pivots to AI to manage record 12.7 million graduate influx. China's new five-year plan finance.yahoo.com calls for AI throughout its economy and tech breakthroughs.
US regulators finance.yahoo.com said banks won't face extra capital charges on tokenized securities. The Federal Drug Enforcement Administration bloomberg.com opened an investigation into Jeffrey Epstein in 2015, centering on money laundering and drug trafficking allegations.
Regional Developments
Australia's household spending bloomberg.com rebounded in January as the RBA weighs another hike amid energy cost concerns. Bangladesh's energy stockpiles bloomberg.com were affected by the Iran war. Sri Lanka bloomberg.com is in a "good position" to absorb oil price shocks, according to its central bank governor.
Australian pensions industry bloomberg.com representatives will head to the US next week, seeking to showcase the scale of investments in the world's largest economy. Venezuela and the US bloomberg.com are scrutinizing dozens of confidential oil contracts signed during Nicolas Maduro's reign.
Market Outlook
Lloyd Blankfein sees geopolitical risk amid "an anxious market," warning his experience suggests "a reckoning" is coming. The economic fallout from the Middle East war is spreading outside the region. Energy markets were rocked this week, with roughly one-fifth of the world's oil supply originating from the Persian Gulf.
India ft.com received a reprieve as the US eased sanctions on buying Russian oil with a 30-day waiver. Indian refiners investing.com raised LPG rates for the first time in a year amid the Iran conflict. China investing.com extended its gold-buying streak to 16 months amid Middle East turmoil.