Bloomberg Surveillance 3/16/2026
Speakers
Chris Verrone — Head of Technical & Macro Strategy, Strategas
— Chopping Block co-host
Summary
- The Middle East conflict has entered its third week, effectively closing the Strait of Hormuz and driving Brent crude above $100 per barrel.
- UAE oil production has been cut nearly in half (from 3.5 million to 2 million barrels per day) following repeated drone strikes on the key Fujairah export terminal.
- The US administration is heavily pressuring NATO allies and China to form a naval coalition to reopen the Strait, but major allies (UK, Germany, Japan, Australia) are pushing back against military involvement.
- The massive energy supply shock is raising fears of global stagflation, severely complicating the upcoming central bank rate decisions for the Fed, ECB, BOE, and BOJ.
- Despite the geopolitical turmoil and a 40% monthly surge in crude prices, US equities are showing resilience, with investors viewing the US as relatively insulated compared to Europe and Asia.
Trade Ideas
"Gold is number one on that list... The fact that it hasn't [gone to 6000], I think it reflects blow off like conditions in gold. Silver is also acting worse, as well as platinum and palladium. I think they are all going lower." Despite a major geopolitical war and a massive energy shock, precious metals are failing to rally as intuition would suggest. This inability to catch a bid during a textbook safe-haven event indicates exhausted buying pressure and a trend reversal. SHORT precious metals as they are exhibiting blow-off top behavior and failing to act as safe havens during a major conflict. A sudden escalation that directly threatens the US dollar or the global financial system could reignite safe-haven buying in precious metals.
"We think it's more of a buy outside the U.S. We like Europe, core Europe. The idea of two hikes priced in this year is not appropriate." The market is pricing in rate hikes for the ECB due to the inflationary impact of the energy shock. However, central banks typically look through supply shocks. The severe hit to European economic growth from triple-digit oil prices will ultimately force the ECB to cut rates, not hike them, driving bond yields lower. LONG European sovereign bonds as the market is incorrectly pricing in ECB rate hikes during a growth-destroying energy shock. If the energy shock causes persistent stagflation and the ECB rigidly prioritizes its inflation mandate over economic growth, they may actually hike rates, hurting bond prices.
"The long-term structural fundamentals, the earnings growth in the tech sector is bringing money back to the U.S. and supporting U.S. equity markets." While Europe and Asia are highly exposed to the energy price shock, the US is buffered by relative energy independence. This dynamic drives global capital flows back into US mega-cap tech and semiconductor hardware, which continue to deliver massive earnings growth despite geopolitical noise. LONG US technology and semiconductor hardware as a relative safe haven supported by strong fundamental earnings growth and US energy independence. A prolonged energy shock that causes a severe US consumer recession could eventually drag down enterprise tech spending and earnings.
"Around that seven to 10 year point does provide you quite a bit of protection from a growth shock." The massive spike in oil prices acts as a regressive tax on the consumer, leading to demand destruction and a subsequent economic growth shock. Central banks will not hike into a supply-driven energy shock, meaning the next major move in yields is likely lower as economic growth slows down. LONG medium-to-long duration US Treasuries as a hedge against an impending growth shock caused by triple-digit oil prices. If inflation expectations become unanchored and the Fed is forced to hike rates to maintain credibility, long-duration bonds will sell off.
"Software found its bottom or at least is in the bottoming process and investors are looking for ways to position in some of those that maybe were called falling knives before but now it is fallen." Software stocks have already been severely beaten down and are showing relative strength by bouncing on rough market days. Because software companies have high margins and are less directly exposed to physical supply chain and energy shocks, they offer a fundamentally sound area for investors looking to deploy risk capital. LONG software equities as they have completed their bottoming process and offer a high-margin refuge from physical commodity shocks. A broad market capitulation event or a renewed spike in long-term interest rates could cause further multiple compression in high-valuation software names.
"NVIDIA is at 83% share of data center semiconductors right now. And that's plateaued. Where you go from 83% share it's hard to go up much from that... competitors have the door cracked open for them and are rushing in." NVIDIA has reached peak market share and is facing severe supply constraints (TSMC packaging limits) and demand constraints (hyperscalers struggling to finance massive data center builds). This creates an opening for competitors to take market share, limiting NVIDIA's upside potential from current levels. NEUTRAL on NVDA as peak market share, supply bottlenecks, and emerging competition cap further upside. If NVIDIA announces a revolutionary new product architecture that significantly lowers the total cost of ownership for AI training, they could maintain their monopoly and drive the stock higher.
Up Next
This Bloomberg Markets video, published March 16, 2026, features Chris Verrone, Jeff Blaser, Stephen Parker, Vishal Khanduja, Liz Young Thomas, Jay Goldberg discussing GLD, SLV, PALL, PPLT, IGOV, BNDX, QQQ, XLK, SMH, IEF, TLT, IGV, XSW, NVDA. 6 trade ideas extracted by AI with direction and confidence scoring.
Speakers: Chris Verrone, Jeff Blaser, Stephen Parker, Vishal Khanduja, Liz Young Thomas, Jay Goldberg · Tickers: GLD, SLV, PALL, PPLT, IGOV, BNDX, QQQ, XLK, SMH, IEF, TLT, IGV, XSW, NVDA