Iran War: Military Strikes Continue as US, Tehran Argue Over Terms | The Opening Trade 3/26/2026
Speakers
Summary
- Conflicting signals between the US and Iran over peace talks perpetuate market uncertainty. The US insists talks are ongoing, while Iran publicly rejects a 15-point truce plan and issues its own maximalist demands, including reparations and sovereignty over the Strait of Hormuz.
- The base-case geopolitical scenario is a prolonged, lower-intensity conflict with ongoing disruption to Strait of Hormuz traffic, not a swift return to the status quo ante. The risk is markets prematurely price a full de-escalation.
- Oil price risks are skewed sharply upward; BlackRock's Rob Kapito warns prices could spike to $150/barrel, and the White House is modeling a $200/barrel scenario. Northern Trust's central case is $100-$110, but a move above $150 could trigger a global recession.
- Market positioning appears to lean toward expecting a de-escalation, creating a headroom for disappointment. Significant cash sits on the sidelines, seen as fuel for a rally once conflict uncertainty clears, but the advice is to avoid preempting that bounce.
- The private credit sector faces renewed scrutiny following Ares Management's steep fund loss. Lloyd Blankfein warns of accumulated, potentially overvalued private assets on balance sheets, suggesting a "reckoning" is due, despite counter-messaging from firms like Blue Owl Capital.
- The UK consumer and business sector is acutely vulnerable: household confidence is low, businesses face a confluence of higher energy, wage, tax, and financing costs, threatening to snuff out a fragile recovery.
- The US economy is seen as relatively resilient and sheltered compared to Europe and Asia due to energy independence, the tech investment boom, and recent fiscal tailwinds, supporting a "long US assets" view.
- A breakthrough in AI memory compression by Google researchers (Turbo Coupon) is seen as a potential threat to memory chip demand, pressuring shares of makers like SK Hynix and Samsung, though the long-term impact on AI adoption is debated.
- Central banks (ECB, BoE) face a dilemma: rising energy prices are inflationary, but weak demand argues against hiking. The consensus is they will likely look through the supply shock unless inflation expectations become unanchored (e.g., sustained prices above 4-5% in the UK).
- Gold is failing as a safe haven in this conflict; the view is that a strengthening dollar and upward pressure on yields are negative for gold, and it may have further downside until the conflict concludes.
Trade Ideas
Google researchers touted a new compression technique (Turbo Coupon) that can reduce memory required for large language models by a factor of six, slashing training costs. Shares of memory and storage companies (e.g., SK Hynix, Samsung) fell in Asia. If widely adopted, this innovation reduces demand for high-bandwidth memory (HBM), a key and lucrative product for memory chip makers that had surged during the AI boom. AVOID the memory chip segment of the Electronic Technology sector due to a potential existential threat to a core growth driver and the risk of downward revisions to demand forecasts. The technology has limited applicability, or the reduction in cost per model leads to an explosion in new AI projects that ultimately increases total memory demand.
Haldane outlines a "combination of forces" hitting UK businesses: rising energy costs, wages, taxes, and cost of money, threatening to "snuff out" fragile business confidence. UK household confidence is at a low. Retailers are on the front line, facing squeezed margins and an inability to fully pass through higher costs (e.g., freight, energy) to weakened consumers. AVOID the UK Retail Trade sector due to a severe profit margin squeeze from multiple cost inputs and deteriorating consumer demand. A rapid de-escalation in the Middle East that brings down energy prices and restores consumer confidence before lasting damage is done.
Blankfein states there is an "accumulation of unsold private assets on investors balance sheets" as a warning that some may be overvalued, and "at some point there needs to be a forcing function or a reckoning." He argues that if these assets couldn't be sold in a favorable equity and financing environment, they may be marked above realizable value. A "spark" could trigger widespread markdowns. AVOID the private credit sector due to looming valuation risk and the potential for a correlated sell-off, despite claims of resilience from within the industry. A soft landing where economic conditions improve, allowing for orderly asset sales without forced mark-to-market losses.
Cudmore states he turned "bearish gold at the start of the month" and believes "it's got more downside." He argues the war's onset is inflationary, leading to a stronger dollar and higher yields, which is bad for gold. The traditional war premium has been paid; gold buyers have gotten their catalyst. In the current dynamic, the conflict supports a stronger dollar (US resilience) and potentially higher real yields (inflation fears), both headwinds for gold. SHORT gold as it is failing to act as a safe haven and faces deteriorating macro dynamics specific to this conflict. A dramatic escalation involving direct US-Iran ground conflict that triggers a panic flight to traditional havens, overwhelming the dollar/yield dynamic.
The board of Monte dei Paschi ousted its CEO, who had challenged the board's plans. He had overseen a restructuring and return to profitability. The removal signals deep internal conflict and strategic disagreement at a critical juncture, creating uncertainty over the bank's integration plans and future direction. AVOID due to heightened governance risk and leadership instability, which threatens to disrupt a hard-won turnaround. The appointment of a new CEO who quickly unites the board and executes a clear, successful strategy.
Tannenbaum states his central case for oil is $100-$110/barrel, but he has looked at a "much higher" scenario which "isn't very pleasant" and "could certainly cause a global recession." He references BlackRock's Rob Kapito warning of a spike to $150. The price trajectory depends entirely on the evolution of the Iran conflict. An escalation, such as action against Kharg Island, would damage energy infrastructure and drive prices significantly higher. WATCH because the current price is headline-driven and subject to extreme volatility. The risk/reward is asymmetric, with a high-impact, low-probability tail risk of a price spike causing a global downturn. A swift and genuine diplomatic off-ramp that reopens the Strait of Hormuz fully, leading to a rapid normalization of flows and prices.
Up Next
This Bloomberg Markets video, published March 26, 2026, features Andy Haldane, Lloyd Blankfein, Mark Cudmore, Louise Moon, Carl Tannenbaum discussing XLK, XRT, XLF, GOLD, BMPS.MI, WTI. 6 trade ideas extracted by AI with direction and confidence scoring.
Speakers: Andy Haldane, Lloyd Blankfein, Mark Cudmore, Louise Moon, Carl Tannenbaum · Tickers: XLK, XRT, XLF, GOLD, BMPS.MI, WTI