Market pressure could continue 'even if the war were to end tomorrow': Strategas' Jason Trennert

Summary

• Sees a strong and persistent inverse correlation between the stock market and oil prices, noting it has held in 12 of the last 13 trading days.
• Believes it will be hard for the market to make significant upside progress until key geopolitical pressures, particularly from oil, are resolved.
• Argues the current Middle East conflict is structurally different and will have a longer-lasting impact than past events (e.g., Venezuela, Iran).
• States that even if the war ended immediately, the damage to regional energy infrastructure (e.g., natural gas plants) would keep supply offline for years.
• Contends that even post-conflict, the cost of moving goods through the Strait will remain meaningfully higher due to elevated insurance and shipping costs.
• Suggests this prolonged disruption will raise the global cost of capital, as more debt issuance will be required and credit standards tighten.
• Notes the U.S. is energy self-sufficient but lacks sufficient refining capacity, creating a potential strategic advantage if expanded.
• Posits that the "BEAUTIFUL" bill (presumably the infrastructure bill) is highly stimulative and could drive significant productivity gains, helping to tamp down inflation over the next couple of years.
• Acknowledges the war is currently a dominant factor for the Fed and inflation in the near term, but sees a potential longer-term productivity-driven disinflationary path.