Public Markets 8-Hour Briefing
×Market Turmoil Amid Middle East Conflict
Oil prices surged as the Iran conflict entered its sixth day, with Brent crude climbing above $70 per barrel. Airbus gained after Citi upgraded the stock to Buy, lifting its target price amid expectations of strong demand for commercial aircraft despite regional tensions.
Corporate Developments
Berkshire Hathaway CEO Greg Abel initiated the conglomerate's first share buyback of the post-Buffett era as cash holdings reached a record $373 billion. Revolut applied for a US banking license, signaling its push to enter the American market under the Trump administration's more permissive regulatory stance.
Financial Sector Impact
BlackRock slashed the value of a private loan to zero just three months after valuing it at full price, marking another sudden wipeout in private credit markets. JPMorgan hosted its 3,500-person leveraged finance event in Miami Beach, where attendees grappled with war-related market volatility affecting the roughly $3 trillion leveraged finance sector.
Regional Market Reactions
South Korea's Kospi bounced nearly 10% after an Iran-driven rout, recovering from earlier losses as markets stabilized. Emerging-market currencies fell to session lows as the conflict escalated, with several Middle Eastern cities facing missile threats and oil prices surging.
Energy Market Disruption
Saudi Arabia began shifting crude exports to the Red Sea as Strait of Hormuz disruptions mounted, with about 10 million barrels loaded from the Al-Muajjiz terminal in the first four days of March. Adani Total Gas tripled gas prices for large industrial users beyond 40% of their daily allocation as Middle East supply constraints tightened.
Technology and AI Sector
OpenAI unveiled Symphony, a potential shift beyond chat-based AI applications, according to UBS analysis. Nvidia sank on reports of global AI chip export rules, adding to sector volatility as companies navigate regulatory uncertainty.
Real Estate and Infrastructure
EQT Real Estate acquired East Coast warehouses from Mapletree Investments for $575 million, expanding its US industrial portfolio. Galvanize hit $1 billion for a commercial real estate strategy focused on energy resilience, backed by billionaire investor Tom Steyer.
Aviation Industry Challenges
Delta Air Lines overhauled its C-suite as operations chief plans to exit, following the retirement of its longtime president. Heathrow Airport faced mounting cancellations and parked planes due to the Mideast war, creating operational challenges for the London hub.
Consumer and Retail Sector
Victoria's Secret projected its best year since splitting from L Brands, forecasting robust revenue growth that exceeded Wall Street expectations. Target accelerated in-store investments as part of its turnaround strategy, planning to open more than 30 locations this year.
International Trade and Policy
Germany secured a US sanctions exemption for a Rosneft refinery, sparing Berlin from major fuel supply disruptions. India sought clarity from the US on a proposed Strait of Hormuz insurance mechanism for oil tankers and other vessels transiting the critical waterway.
Currency and Bond Markets
UK mortgage costs were set to rise as swap rates increased on Iran war concerns, with a key gauge reflecting future interest rate expectations reaching year-to-date highs. Eurozone retail sales declined unexpectedly in January, pointing to fragile household sentiment even before the energy price surge.
Precious Metals and Commodities
Gold prices faced pressure as ECB Governing Council member Olli Rehn urged maintaining a "cool head" amid the Iran war, suggesting the conflict's duration would be the main driver of inflation outlook. Silver prices saw limited upside potential over the next 12 months according to UBS analysis.
Private Equity and M&A
Saba Capital offered a steep discount for Starwood real estate shares, seeking a stake in the fund that sharply limited investor redemptions in 2024 at a 20% haircut. Glencore entered the battle for a former FTSE miner, proposing support for Shakhmurat Mutalip who is close to finalizing a deal for a stake in Eurasian Resources Group.
Regulatory and Legal Developments
Trump stated he must be involved in selecting Iran's next leader, while Trump and Bondi faced a lawsuit over approval of ByteDance's TikTok US asset sale. The US Defense Department sought information to expand metal stockpiles, focusing on five critical minerals to reduce supply chain risks.
Startup and Innovation
Sierra Space raised $550 million, lifting its valuation to $8 billion as it drives to become a defense contractor for the US government. Lio secured $30 million from Andreessen Horowitz and others to automate enterprise procurement processes.
Market Technical Analysis
Presenting FedLock, a new way to measure Fedspeak with large language models, was introduced by Bloomberg Markets. NYSE owner Intercontinental Exchange invested in crypto exchange OKX at a $25 billion valuation, marking a significant institutional move into digital assets.