Iran War: Major German Company Warns Investors Of Conflict Risk | The Pulse 3/4
Speakers
Christian Kötz — CEO, Continental AG (Tires Division)
— Chopping Block co-host
Summary
- Geopolitical Escalation: The conflict involving Iran has escalated significantly (Day 5), with 1,800 missiles/drones fired at the UAE and attacks on Saudi infrastructure. The Strait of Hormuz is effectively contested despite US assurances.
- Oil Market Bifurcation: While spot oil is up ~15%, the long end of the curve (Dec '26) is only up 2-3%, suggesting the market views this as a supply shock rather than a structural demand shift.
- Winners & Losers: The conflict creates a distinct split in energy markets. Middle East producers face physical risk; non-MENA producers (Canada, Norway) capture the price premium without the infrastructure risk.
- Private Credit Shakeout: Apollo CEO Marc Rowan predicts a "shakeout" in private credit where asset accumulation shifts from easy money to disciplined risk management, favoring large incumbents over new entrants.
- Industrial Margin Squeeze: Manufacturing sectors dependent on oil derivatives (like tires) are flashing warning signs regarding raw material costs, signaling potential margin compression in Q2/Q3.
Trade Ideas
Rowan states a "shakeout" is coming to private credit. He argues that "reward for good work is actually more work" (managing more money) and that disciplined risk managers will make more money than ever before. In a high-rate, volatile environment, capital flees from smaller, inexperienced private credit shops and consolidates into the "Too Big to Fail" alternative managers. The "shakeout" kills the small players but acts as a market share donation to the giants. LONG Top-Tier Alternative Asset Managers. Systemic default rates rising faster than underwriting models can handle.
Jon Stanton
CEO, The Weir Group
Weir Group CEO states demand for Copper and Gold is "really, really strong" driven by "national critical mineral security" and defense needs, not just Net Zero. The geopolitical instability (Iran war) accelerates the trend of "Onshoring" and "Resource Security." Governments are removing regulatory hurdles for new mines. This benefits the miners (FCX) and the "picks and shovels" engineering firms (WEICY, CAT) supplying the expansion. LONG Mining Services & Critical Mineral Producers. Global recession crushing industrial demand for base metals.
Ziad Daoud
Chief Emerging Market Economist, Bloomberg
Daoud explicitly states that to win from this oil spike, a country must be an oil exporter *outside* the Middle East. He names Norway and Canada as prime beneficiaries. Middle East producers (Saudi, UAE) face physical infrastructure risk (refinery attacks mentioned) and shipping blockades in Hormuz. Canadian (CNQ, SU) and Norwegian (EQNR) producers capture the "War Premium" ($19/barrel estimated) with zero physical risk to their assets. LONG Non-MENA Energy Producers. A sudden diplomatic off-ramp or rapid de-escalation causing the war premium to evaporate.
Christian Kötz
CEO, Continental AG (Tires Division)
Continental CEO warns that rising oil prices directly impact raw material costs (synthetic rubber/carbon black are oil derivatives). He notes there is a lead time before these costs hit the P&L, but the impact is coming. Tire manufacturers operate on a lag. They will incur higher input costs immediately but cannot raise prices on consumers fast enough to offset it (typically a 6-month lag). This guarantees margin compression in the coming quarters. AVOID/SHORT Tire Manufacturers (Continental, Goodyear). Oil prices collapse quickly, or demand for replacement tires spikes unexpectedly.
Oliver Crook
Chief European Correspondent, Bloomberg
Spanish PM Sanchez is critical of US/Israel actions. Trump has explicitly threatened a "full trade embargo" on Spain. The Spanish index (IBEX) has already sold off. Spain is politically isolated within the Western alliance regarding this conflict. A US trade embargo would disproportionately hurt the Spanish economy compared to its EU peers. Markets hate political uncertainty and trade wars. SHORT Spanish Equities (via ETF). EU steps in to negotiate a bloc-wide deal that protects Spain, or Trump walks back the threat.
Joumanna Bercetche
Anchor, Bloomberg
1,800 missiles/drones fired at UAE alone. US rushing to put defense plans in place. Iran targeting logistics hubs and airports. The sheer volume of incoming fire confirms the depletion of interceptor stockpiles (Patriots, THAAD, Iron Dome). This necessitates immediate, massive replenishment contracts for US defense primes. The "War of Attrition" phase guarantees recurring revenue for missile defense manufacturers. LONG US Defense Primes. Supply chain bottlenecks preventing companies from fulfilling orders.
Up Next
This Bloomberg Markets video, published March 04, 2026, features Marc Rowan, Jon Stanton, Ziad Daoud, Christian Kötz, Oliver Crook, Joumanna Bercetche discussing APO, BX, KKR, WEICY, FCX, CAT, EQNR, CNQ, SU, CTTAY, GT, EWP, RTX, LMT, NOC. 6 trade ideas extracted by AI with direction and confidence scoring.
Speakers: Marc Rowan, Jon Stanton, Ziad Daoud, Christian Kötz, Oliver Crook, Joumanna Bercetche · Tickers: APO, BX, KKR, WEICY, FCX, CAT, EQNR, CNQ, SU, CTTAY, GT, EWP, RTX, LMT, NOC