Trump Extends Energy-Attack Ceasefire, Market Volatility, Health Care Costs | The Close 3/26/2026
Speakers
Summary
- Venu Krishna (Barclays) base case expects resolution of the Iran war within 1-2 months, but downside risks have increased; bear case S&P 500 could fall to 5900.
- Krishna notes oil at $110/barrel would hit consumer discretionary earnings by ~16%, while benefiting energy and materials sectors via pricing power.
- Ed Morse (Hartree) warns a 6-week closure of the Strait of Hormuz would disrupt 10 million barrels/day, requiring demand destruction and pushing gasoline toward $6/gallon.
- Morse emphasizes negotiations are fragile and other regional escalations (e.g., Iraq, Kuwait) could further disrupt supply.
- Mimi Duff (GenTrust) allocates to real assets (commodities, gold, uranium) as havens, up 20% YTD, while the software sector is down 25% and highly susceptible to AI disruption.
- Scott Chronert (Citi) observes international equity ETFs saw record flows in February, but may reverse; looks for a downside flush in U.S. ETFs to signal a bottom.
- Michael Zezas (Morgan Stanley) outlines three scenarios: de-escalation (equities/bonds rally), partial reopening (Brent ~$100), and escalation (Brent ~$150, risk-off).
- David Roman (Goldman) highlights AI in health care can improve operational efficiency; companies with proprietary data (e.g., robotic surgery records) have a durable edge.
- Thomas DiNapoli (NY Comptroller) reports record Wall Street bonuses, supporting state tax revenue, but acknowledges competition from other states for finance jobs.
- Google's new algorithm could reduce AI memory requirements by ~6x, pressuring memory chip stocks (e.g., SanDisk down 11%).
- Private credit faces liquidity confusion, with Apollo and Blue Owl acknowledging miscommunication to retail investors about redemption limits.
Trade Ideas
Venu Krishna explicitly said that in a scenario of sustained higher oil prices, the energy sector clearly benefits. Higher oil prices directly boost revenues and profits for energy companies, giving them pricing power. LONG energy minerals sector as a hedge or beneficiary of ongoing geopolitical tensions and elevated oil prices. A rapid resolution to the Iran conflict that causes oil prices to collapse.
Ed Morse stated that if the Strait of Hormuz remains closed for six weeks, it would disrupt 10 million barrels per day of supply, and prices will go higher, potentially requiring demand destruction. Closure of the Strait blocks a major chokepoint for global oil exports, creating a physical shortage that must be met by drawing inventories or reducing demand, pushing prices upward. LONG oil because the geopolitical situation suggests sustained supply disruption, and negotiations are uncertain with risks of escalation. A swift diplomatic resolution that reopens the Strait and restores flows quickly.
Mimi Duff stated that the software sector is highly susceptible to being taken over by AI and has already declined 25%. AI disruption threatens traditional software business models, and the sector has shown vulnerability during market stress. AVOID technology services due to structural headwinds from AI and recent underperformance. A breakthrough in software companies' adoption of AI that enhances their products rather than displacing them.
Up Next
This Bloomberg Markets video, published March 26, 2026, features Venu Krishna, Ed Morse, Mimi Duff discussing XLE, WTI, XLK. 3 trade ideas extracted by AI with direction and confidence scoring.
Speakers: Venu Krishna, Ed Morse, Mimi Duff · Tickers: XLE, WTI, XLK