March 24th Market Overview

Happy Tuesday

Yesterday’s relief rally vanished the second Tehran denied talking to Washington. The Pentagon is now sending the 82nd Airborne to the Middle East, and oil is back above $100.

Markets keep trying to price in a quick diplomatic fix, but the reality of a prolonged energy shock is setting in. It’s a nasty market from all sides.

Let’s dig in...

Today's Big Picture

1. The Oil Whipsaw
   
   Everyone bought the dip Monday when Trump teased peace talks. Today, Iran denied the talks exist, Israel kept bombing, and Saudi Arabia is reportedly gearing up to join the fight alongside the UAE. Crude immediately reversed back above $100. Pakistan offered to host talks, but Iran's deputy parliament speaker said the Strait will not reopen and there will be no negotiations.
   

2. Wall Street's Private Lending Machine Is Breaking Down 
   Big firms like Apollo $APO, KKR $KKR, and Ares $ARES spent years lending money to mid-size companies banks wouldn't touch, then packaged those loans into funds and sold them to everyday investors promising 8 to 10 percent returns. Problem is, those loans can't be sold quickly like stocks, and now the borrowers are struggling. The IMF estimates 40 percent of them have negative free cash flow.
   
   So investors want out, the funds can't pay everyone, and the gates are slamming shut. Apollo told investors they'll get less than half what they asked for, Ares is capping withdrawals too, and Moody's cut a KKR fund to junk. The sector has lost $265 billion in market cap since September.
   

3. Anthropic Spooks the Software Trade 
   
   Anthropic released an update allowing its AI to take control of your computer to complete tasks autonomously. Software stocks got hit hard in response. The iShares software ETF $IGV is now down nearly a quarter this year as Wall Street prices in the possibility that AI agents replace the traditional SaaS business model faster than anyone expected. Salesforce fell and Palantir led the losses.

Market Overview

Index Performance

Stock Spotlight

SanDisk $SNDK ( ▼ 0.86% )  
and Western Digital $WDC are quietly becoming the favorite back-door AI trades. Data center buildouts are creating massive demand for memory and storage that is completely ignoring the broader tech selloff.

Apple $AAPL ( ▲ 0.58% )  
is the only major smartphone brand actually gaining switchers in a shrinking global market, per a new Morgan Stanley survey. Global shipments are expected to fall significantly in 2026.

Tesla $TSLA ( ▲ 0.42% )  
finally caught a break in Europe. February registrations moved higher, snapping a losing streak that had been running since late 2024. Still a tough market though, with cheap Chinese EVs from BYD flooding the zone.

Big Name Updates

Amazon $AMZN ( ▼ 1.45% )  
admitted the war is disrupting its Bahrain data centers again. Second time since the conflict started. Big Tech's plan to turn the Gulf into a computing hub is running into geopolitical reality.

Jefferies $JEF ( ▲ 3.25% )  
caught a bid after reports that Japan's Sumitomo Mitsui is plotting a takeover. The bank already owns a minority stake and seems ready to absorb the whole firm.

Clear Secure $YOU ( ▲ 0.15% )  
is approaching all-time highs as travelers scramble to skip TSA lines during the partial government shutdown. Stock is up more than half this year.

Oracle $ORCL ( ▼ 3.77% )  
fell despite Citizens reaffirming a $285 target. Down nearly a quarter in 2026 as investors question the $50 billion debt-fueled AI push.

Other Notable Company News

Circle $CRCL ( ▼ 19.54% )  
had its worst day on record after reports the Clarity Act could ban yield payments on stablecoins. Coinbase $COIN got dragged down with it.

Netgear $NTGR ( ▲ 11.83% )  
gained after the FCC banned imports of foreign-made consumer wireless routers on national security grounds.

Ecolab $ECL ( ▲ 1.43% )  
got upgraded to overweight by JPMorgan, which thinks the war-related selloff is overdone. The company recently acquired CoolIT for direct-to-chip data center cooling.

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Sector Watch

Bond Market

The Treasury market looks fragile after today's two-year note auction saw terrible demand, with less non-dealer bidding than average per BMO. The two-year yield climbed to 3.94 and the ten-year pushed to 4.42, its highest since July. Yields grinding higher alongside a war and oil above $100 is not a combination the equity market can shrug off forever.

Policy Watch

The Fed 
Powell is sticking to his usual playbook. He told reporters last week the response depends on how long the energy shock lasts. The "standard learning" has been to look through oil spikes, but that assumes inflation expectations stay anchored. Multiple Fed speakers are on deck this week.

Middle East
The war is expanding. Saudi Crown Prince MBS is reportedly close to a decision to join the attacks on Iran, per WSJ, and the UAE has started shutting down Iranian-owned facilities in Dubai including the Iranian Hospital. Pakistan formally offered to host peace talks between Washington and Tehran. Trump said Tuesday that Iranians are "talking sense" and want a deal, while Politico reported the White House is quietly eyeing Iran's parliament speaker Ghalibaf as a potential negotiating partner and even a future leader.

Economy 
Today's S&P Global PMI showed U.S. business activity hit an 11-month low. The real alarm is in the price data: input costs hit a 10-month high driven by energy, and selling prices reached their highest since August 2022. Europe's reading was worse, with S&P Global using the words "stagflation alarm bells." BP's chief economist said at CERAWeek that this disruption is incomparable to any past oil shock in scale.

International 
Japan's core inflation fell below the BOJ's target for the first time since 2022, a sign that the global growth picture is deteriorating fast. Meanwhile:

• China capped a planned fuel price increase at half the original amount to protect consumers

• Ship insurance in the Persian Gulf is running at 5 to 10 percent of vessel value, the highest in 25 years

• The ECB warned it must be "very agile" to contain inflation as the war brings stagflation risks closer

What to Watch

Consumer Sentiment Friday 
This will be the first clean look at how $100 oil is hitting household confidence. If it craters, the stagflation narrative gets a lot louder.

Oil Forecasts Keep Climbing 
Goldman sees Brent hitting $115 in April. Citi's bull case is $150. Oxford Economics expects the Strait of Hormuz to remain impassable until at least May with volumes only returning to half of pre-conflict levels. None of these forecasts assume a quick resolution.

Retail Investors Are Tapping Out 
Individual investors were net sellers of single stocks on Monday for the first time since 2023, per Vanda Research. Retail flows into stocks and ETFs have dropped by nearly half since the war started. These are the buyers who caught every dip since Liberation Day. If they stay out, the market loses its most reliable support.

Suspicious Oil Trading Before Trump's Post 
About $760 million in oil and stock futures traded in a two-minute window Monday morning, right before Trump posted about postponing Iran strikes. Same pattern we saw with the Liberation Day tariff pause last spring. Nobody knows who was behind it.

Thanks for reading - you are now the more informed 🙂

- John

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