March 13th Market Overview

Happy Friday

Brent settled above $103 while ships burn in the Strait of Hormuz. The S&P is only down 3 from its prewar close. I think investors are badly mispricing how long this lasts.

This war isn't good for anyone, and I keep seeing both sides of the aisle asking what the heck are we doing in Iran. What's the strategy? How does it benefit us?

Going deeper on this tomorrow with all premium readers. Have a good weekend everyone.

Let’s dig in...

Today's Big Picture

1. 1. The Oil Math Doesn't Work
   Iran is actively mining the Strait of Hormuz using thousands of small navy boats. The White House has tried reserve releases and Russian sanction waivers, but government reserves can't cover even half the daily shortfall from a closed shipping lane. Arab diplomats say Tehran feels empowered and has laid out steep preconditions for any talks. I expect prices to stay elevated until we see a real military breakthrough.
   

   2. Growth Slows While Inflation Bites 
   Fourth-quarter GDP was revised down to 0.7 from 1.4, a sharp deceleration from 4.4 the quarter before. Core PCE ticked up to 3.1 in January. The Fed is boxed in. You can't cut rates to save growth when inflation won't come down, and all of this data is from before the war even started.
   

   3. Private Credit's Locked Doors
   Investors asked to pull 14% out of Cliffwater's $33 billion fund. Morgan Stanley is capping withdrawals. When these funds can't sell loans to pay back fleeing investors, they lean harder on bank credit lines. I'm watching the regional bank sector closely because that's where this hidden exposure usually lives.

Market Overview

Index Performance

Stock Spotlight

Adobe $ADBE ( ▼ 6.91% )  
CEO Shantanu Narayen is stepping down after 18 years. Barclays immediately downgraded the stock, saying it'll take time for a new leader to move the needle on a $25 billion annual recurring revenue base. AI revenue disappointed and Firefly is cannibalizing Adobe Stock.

Ulta Beauty $ULTA ( ▼ 14.28% )  
warned of slower growth ahead. Their earnings forecast came in light and investors ran for the exits.

CF Industries $CF ( ▼ 4.81% )  
hit all-time highs. U.S. fertilizer makers are taking global market share while Strait of Hormuz disruptions choke Middle East supply. Cheap natural gas gives them a serious margin advantage.

Big Name Updates

Nvidia $NVDA ( ▼ 1.33% )  
got a lift after reports that ByteDance is assembling roughly 36,000 Blackwell B200 chips in Malaysia. That's a massive order and confirms the AI buildout hasn't slowed down. By end of the day all gains evaporated.

Coinbase $COIN ( ▲ 1.04% )  
caught a bid as Bitcoin crossed $73,000. Some investors are treating crypto as a hedge against the oil shock, betting governments will have to stimulate their way through it.

Meta Platforms $META ( ▼ 4.05% )  
delayed rollout of its new AI model. Stock dropped on the session.

Other Notable Company News

Stryker $SYK ( ▼ 0.29% )  
is dealing with a cyberattack tied to the Iran conflict that's disrupting operations.

BuzzFeed $BZFD ( ▼ 0.42% )  
issued a going-concern warning. They lack the liquidity to survive the coming year.

Mosaic $MOS ( ▼ 6.7% )  
and Nutrien $NTR are both rallying hard on the agricultural supply chain disruption from the Strait closure.

Rivian $RIVN ( ▼ 2.61% )  
unveiled R2 pricing between $45,000 and $58,000, trying to go downmarket. Investors didn't care. Stock dropped further.

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Sector Watch

Bond Market

Treasury yields barely flinched despite the ugly growth data. The 10-year sits at 4.286. The dollar hit its highest level since last summer against the euro and the yen is near 159.4, approaching intervention territory. Sticky inflation plus a shooting war is pushing everything into the dollar.

Policy Watch

Fed 
A federal judge tossed the DOJ subpoenas targeting Chair Jerome Powell. That kills a political distraction right when the Fed needs to be focused on stagflation. Fed funds futures have taken even a September cut off the table. Only one cut is priced in for all of 2026, in December. Trump posted on Truth Social demanding Powell cut "immediately."

Fiscal & Trade

• Bessent, Greer, and China's Vice Premier He Lifeng meet in Paris this weekend to lay groundwork for the Trump-Xi summit March 31 to April 2 in Beijing. Rubio joins Trump on the trip.

• The U.S. expanded a waiver letting countries buy Russian oil at sea, freeing up about 19 million barrels. Won't move the needle since most of that oil was already finding buyers through backdoor channels.

International

• Arab diplomats say Tehran is demanding steep preconditions for any peace talks.

• Israeli intelligence says the regime isn't close to falling. Netanyahu acknowledged regime change requires an internal uprising that isn't coming.

• Hegseth said the U.S. is working to clear the Strait but didn't say how. Energy Secretary Wright said escort convoys might start by month-end.

What to Watch

Fed Meeting Next Week 
They'll hold rates. The statement language is what matters. The market wants to know if they'll acknowledge stagflation or keep pretending inflation is still trending down.

China Summit Framework 
Paris talks this weekend set the table for the late March summit in Beijing. Tariffs, fentanyl, Taiwan all on the agenda. This is flying under the radar because everyone is fixated on Iran. Any concrete framework on tariff de-escalation could move markets fast.

Strait of Hormuz Timeline 
The entire market hinges on this. If the Navy gets escort convoys running by month-end, oil could retreat fast. If not, $110-plus is in play. Iran's mining activity determines the timeline.

Thanks for reading - you are now the more informed 🙂

- John

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