Good morning.
Oil crossed $100 again overnight and the U.S. Navy admitted it won't escort ships through the Strait of Hormuz. That's the headline. Everything else this morning is trading around that one fact. S&P futures are down about 0.5% and there was a broad global selloff overnight.
Here are 3 things worth watching today:
THE $100 LINE IS BACK. Brent briefly broke back through $100 a barrel this morning after Iraq suspended oil terminal activity following fresh tanker attacks. The IEA's record 400 million barrel reserve release — the largest in history — is not holding prices down. Analysts are now openly talking about $130 if the Strait stays closed for months. One economist at KPMG put the ceiling at $130 to $200 if this drags into summer. The market is starting to price in that scenario.
BANKS ARE GETTING HIT. Morgan Stanley and Cliffwater have capped withdrawals from private credit funds. Morgan Stanley, Bank of America, and JPMorgan were all down more than 1% premarket. Rising yields from the oil shock are squeezing credit-sensitive companies hard. This is the part of the story that doesn't get enough attention — the Iran conflict isn't just an energy story, it's quietly becoming a credit story too.
ADOBE REPORTS TODAY. With all the macro noise, Adobe's earnings after the bell are easy to overlook. They shouldn't be. Adobe is one of the clearest reads on whether AI is actually helping or hurting software revenue. Their guidance will say a lot about where the broader software trade goes from here.
Setup to watch: Clean energy funds hit record highs yesterday — quietly, while everyone watched oil. If this conflict extends, the rotation out of fossil fuel exposure and into domestic energy alternatives could have real legs. Worth keeping an eye on names like ICLN and FSLR.
— Sunrise | VonTrend
