The market is spring loaded.
Goldman Sachs says hedge funds are extremely short the market. If there is a sudden end to the war, the market will soar.
WT., Iran is increasing its oil exports through the Strait.
If true, what is the response of the United States?
The Strait of Hormuz is effectively closed except for Iranian ships carrying crude for China. The Strait has been mined and Iran is attacking ships trying to transit the Strait.
https://www.cnbc.com/2026/03/11/cargo-ship-struck-strait-of-hormuz-uk-iran-war.html.
https://www.cnbc.com/2026/03/11/us-strikes-iran-mine-ships-strait-of-hormuz-war-oil.html
https://www.cnbc.com/2026/03/11/iran-ships-oil-china-strait-hormuz-closure-.html
Time is running out for Trump and the Republican Party to win back disaffected voters. Voters hate inflation especially gasoline inflation.
Only 40% of voters are in favor of the war.
The IEA is releasing up to 400 million barrels of crude oil from strategic reserves. The United States is participating in the release. The administration will tap the Strategic Petroleum Reserve.
To encourage oil tankers to transit the Strait, the insurer Chubb, with the backing of $20 billion from the United States, will provide insurance against Iranian attacks. (I doubt if this will accomplish much.)
If Trump wants lower oil prices he should guarantee to U.S. shale producers prices of $80 a barrel until the end of his term. Producers will respond to the price incentive.
Defense Production Act
The President is invoking this law from the Cold War to circumvent California’s extreme environmental laws and regulations so that oil can be pumped from a field off the coast of the state. For too long, California’s anti growth policies have harmed the nation as a whole. The Constitution says Congress has authority over interstate commerce not any single state.
Fertilizer shipments from Gulf states are being severely disrupted.
JP Morgan is tightening credit standards.
Economics
The CPI for February came in at 2.5% on a 12 month basis. The February report did not capture the spike in gasoline prices. For the six months through February, core CPI inflation was 2.3%.
High gasoline prices are a consumption tax. Over time high gasoline prices are a drag on economic growth. Inflation falls as economic growth slows.
Watch wage inflation. If wage increases do not accelerate, the rise in consumer inflation from high gasoline prices will be temporary.
Taxes matter, Howard Schultz, founder of Starbucks, is leaving Washington state and its taxes on the wealthy. He is moving to Florida.
Markets and Stocks
I continue to be very positive on U.S. equities as well as European stocks and selected emerging markets. I would not chase oil. WTI for December is trading around $70 a barrel.
U.S. equities continue to tread water. The S&P 500 slipped lower, down 0.8%. The Nasdaq Composite settled up 0.8%.
West Texas Intermediate oil rose by about 4% to settle at around $87 a barrel.
Oracle
ORCL’s investment in data centers is paying off. Data center revenues were up over 40% in the just reported quarter. ORCL says demand continues to exceed supply for cloud computing. The company sees better than expected growth through 2027. My two year price target for the company is $300 up about 90% from current prices.
Micron
The boom bust cycle for memory semiconductor companies is over. AI is memory intensive. Each new AI platform from Nvidia requires more memory. Memory demand is not linear. For example, Nvidia’s next accelerated computing platform, Vera Rubin, will require three times more high bandwidth memory than Nvidia’s current architecture, Blackwell.
https://www.cnbc.com/2026/03/11/memory-stocks-ai-chips-demand.html
Rheinmettal
The German defense companies is guiding to 45% revenue growth for the next few years. I continue to like the stock. The stock symbol in the U.S. is RNMBY.
https://www.ft.com/content/3333f30c-2d70-41b8-91f3-27f350abacc3
Coeur Mining
The Canadian press is very bullish about demand for silver. I am too.
https://stocks.apple.com/ANEKbXyNDS72qpwog1J6h3w
Boeing
The stock is a disaster but I try to invest and not trade. I will keep my small investment.