Bloomberg Surveillance 3/25/2026
Speakers
Summary
- The core market narrative is defined by the war in Iran and its stagflationary shock, creating extreme volatility and a disconnect between physical commodity markets (tight) and financial futures (lower on diplomatic hopes).
- A U.S. 15-point peace plan has been delivered, but Iranian officials publicly reject cease-fire talks as "illogical," creating substantial two-way risk heading into a weekend deadline.
- The physical oil market is severely strained: ~10M barrels/day are shut in, jet fuel trades over $200/barrel in Asia, and shortages could spread to Europe and vulnerable U.S. regions like California within weeks.
- A prolonged closure of the Strait of Hormuz would require months to normalize flows even after a ceasefire, and repairing damaged energy infrastructure could take years.
- The U.S. economy is seen as relatively insulated due to energy production and AI-driven capex, but California faces a severe crisis due to refinery shutdowns and reliance on Asian imports.
- Central banks, especially the ECB with its single mandate, face a policy dilemma; the Fed's bar for hiking is seen as high due to its dual mandate and a labor market showing early signs of softening.
- Private credit markets are under stress with significant redemption requests, primarily from the wealth channel, though net flows are currently stable due to offsetting inflows.
- Corporate earnings, particularly for U.S. tech, are viewed as resilient, underpinned by AI investment expected to drive future efficiency, creating a haven narrative for U.S. equities.
- Airline capacity, especially airfreight, is severely constrained as Middle Eastern carriers (18% of global cargo capacity) are largely sidelined, causing prices to double.
- There is active speculation about potential market manipulation, with suspicious trading activity noted around key geopolitical announcements.
Trade Ideas
Horne argued that U.S. corporate earnings have shown resilience through multiple shocks, underpinned by a strong labor market and heavy investment in AI for future efficiency gains. He believes geopolitical events typically have short-lived market impacts. The core U.S. equity thesis, especially for large-cap indices like the S&P 500, remains intact based on nominal growth, earnings resilience, and technological investment, which insulates it relative to other economies facing the same shock. This is a LONG view on the broad U.S. market (best expressed via the S&P 500) as a relative haven with a durable earnings stream, advocating for looking through the short-term geopolitical volatility. The conflict escalates into a prolonged global recession that overcomes U.S. insulation.
Flexport's CEO stated that airfreight prices from Asia to the U.S. have doubled, capacity is the "biggest problem," and 18% of global air cargo capacity (Middle Eastern airlines like Emirates, Qatar) is effectively removed from the market. The airline industry (a commercial service) is experiencing a severe supply shock due to the war, not just a price shock. This is structurally impairing profitability and logistics for an extended period. This is an AVOID because the sector is facing a severe, non-transitory cost inflation and capacity constraint that will directly hit earnings and operational stability, with no near-term solution. A rapid diplomatic resolution and return of Middle Eastern carriers to full service.
Reported that "ARM shares rising 13% in the premarket as the company moves to sell its own chips... It is a big pivot for this company as it takes aim at the fast-growing data center market tied to AI." The company is shifting from a pure licensing model to a higher-margin, direct sales model targeting the high-growth AI data center market, with an expected $15bn annual revenue from this new business within five years. This is LONG because the strategic pivot directly captures the immense and sustained investment cycle in AI infrastructure, representing a major new growth vector. Execution risk in manufacturing and competition from established chipmakers.
United's CEO stated that if oil prices stay elevated, it would mean "$11 billion of expense for us. That would require prices to be up 20% to breakeven." The company is cutting 5% of unprofitable capacity. The airline is explicitly modeling a scenario of persistently high oil prices ($100+/barrel) and states that fares must rise 20% to offset this cost—a level that could destroy demand. This is a WATCH because it presents a clear binary outcome: either the energy shock abates (bullish) or United must attempt a massive price hike that could break consumer demand (bearish). The stock is a direct proxy for the duration of the oil shock. Oil prices fall faster than expected, or demand proves more inelastic than modeled.
The transcript reports that "Chevron's warning that California is heading toward an energy crisis because of the Iran war" and that the company "may quit refining oil in California within a decade unless officials roll back regulations." California is highly vulnerable to the Strait of Hormuz closure because it imports ~20% of its refined fuels from Asia. Chevron, a major refiner in the state, is explicitly linking the geopolitical crisis to an existential threat to its local operations. This is a WATCH because it highlights a critical, company-specific operational and regulatory risk that is being acutely exposed by the current shock. The outcome will significantly impact Chevron's strategic assets. California officials could relent on regulations, or the conflict resolves quickly, alleviating the supply crunch.
Up Next
This Bloomberg Markets video, published March 25, 2026, features Martin Horne, Ryan Petersen, Yahaira (quoting news), Scott Kirby, Annmarie Hordern discussing SPY, JETS, ARM, UAL, CVX. 5 trade ideas extracted by AI with direction and confidence scoring.
Speakers: Martin Horne, Ryan Petersen, Yahaira (quoting news), Scott Kirby, Annmarie Hordern · Tickers: SPY, JETS, ARM, UAL, CVX