Public Markets 8-Hour Briefing
×Market Volatility and Energy Crisis
US stocks slumped Friday as oil prices surged and a surprise jobs decline fanned inflation fears. The S&P 500 fell sharply, marking its worst week since June, while Treasury bonds saw their biggest weekly loss since April on inflation concerns. The dollar rallied for its best week since 2024 as a safe haven amid Middle East turmoil.
Oil prices continued their climb, with traders warning $100 crude is imminent if the Iran war persists. Qatar's LNG facility remains largely intact despite drone strikes, though Kuwait cut oil output as storage fills up. US aluminum buyers are rushing to secure alternative supplies from Asia as the conflict disrupts major foreign sources.
Federal Reserve and Economic Data
Fed officials offered conflicting signals on rate policy. While some called for rates to stay on hold "for quite some time," others saw no urgency for cuts amid inflation. Fed Governor Waller said the Iran war is "unlikely to cause sustained inflation," though Chicago Fed President Goolsbee called the weak jobs report a "tough miss" that raises labor market concerns.
Nonfarm payrolls unexpectedly fell by 92,000 in February, the biggest decline since the pandemic. White House economic director Hassett called the report an "outlier" blaming bad weather, while BlackRock's Rosenberg said it undermines the benign economic outlook.
Financial Sector Stress
Financial stocks tumbled as private credit concerns persisted. BlackRock limited redemptions at its private credit fund after withdrawal requests surged to 9.3% of NAV. Blue Owl revealed a £36 million exposure to collapsed UK lender Century Capital. Western Alliance plunged after suing Jefferies over a $126 million loan.
Credit investors are unwinding long positions worth tens of billions of dollars and jumping into hedging trades. Insurer bond moves on private credit are "overdone" according to Goldman Sachs, while 5x leveraged ETFs face resistance at the SEC.
Corporate and Deal Activity
Braskem Idesa is in talks with creditors for financing that would fund a potential Chapter 11 bankruptcy. IG4 Capital signaled it may abandon talks to acquire a controlling stake in Brazilian petrochemical giant Braskem SA as antitrust delays persist.
Servier agreed to buy Day One for $2.5 billion, expanding its oncology portfolio with a 68% premium. Colombia's local debt shifted from worst performer to leading gainer as higher oil prices sparked a rally.
Geopolitical and Market Strategy
Bank of America is steering clients to buy HALO stocks - "hard assets, low obsolescence." Goldman Sachs recommends a geopolitical basket of defense contractors as Wall Street rewrites trading playbooks on the US-Iran war.
Israel's currency and stock market surged even as war rages, while airlines face an "existential threat" from potential jet fuel surges according to Deutsche Bank. Russia emerges as the first clear winner from the conflict as Indian refiners snap up Moscow's barrels after Middle East flows bottle up.
Technology and Private Markets
Axel Springer bought the Telegraph in a £575 million deal, scuppering Daily Mail owner's proposed acquisition. Susquehanna-backed crypto firm BlockFills prepares for restructuring after being sued by a customer and suffering accounting failures.
SpaceX's surging stake raises doubts over private assets in ETFs as a modest investment morphed into a monster position. Robinhood brings private markets' valuation problems to the masses. Polymarket bets on the Iran war show limits of prediction markets for Wall Street.
International Markets
European Central Bank must be "vigilant" to upside price risks from geopolitical events, though it doesn't have to react if price growth remains reasonable. Japan and Canada aim for deeper energy ties during Carney's visit to Tokyo.
UK gilt yields sold off sharply on fears of inflation from the Iran war as hopes for Bank of England rate cuts fade. Swiss officials still aim for a US trade accord after the Supreme Court decision on tariffs.