by Patrick Fearon-Hernandez, CFA, and Thomas Wash

[Posted: 9:30 AM ET] | PDF

Our Comment opens with our views on the latest central bank rate decisions and their implications for the dollar. We then examine why the US and Israel may be seeking a way to transition the conflict into its next phase. In addition, we discuss why Washington has ruled out an export ban and highlight fresh signs of distrust between the US and its allies. As always, we also include a summary of recent US and international economic data releases.

A Global Pause: In the same week that the Federal Reserve signaled that it would not rush to judge the war’s impact on the US economy, several other major central banks followed suit. On Thursday, the Bank of Japan, the Bank of England, the European Central Bank, and the Bank of Canada all kept policy rates on hold. Their decisions reflect uncertainty about whether the conflict will have a short- or long-term effect on inflation and the economy, and these decisions are expected to shape market views of the dollar.

• The choice to remain on hold comes as central banks grapple with the severity of the war’s impact on the economy. ECB President Christine Lagarde stated that while she believes the EU can absorb economic shocks, she is no longer confident that the economy remains in a strong position. Additionally, Bank of Canada Governor Tiff Macklem noted that the Middle East conflict has increased downside risks to the global economic outlook.
• That said, there are signs that some central banks may pivot toward additional rate hikes if inflation shows signs of re‑accelerating. Bank of Japan Governor Kazuo Ueda has reiterated that the bank still expects to raise interest rates, judging inflation risks to be more pressing than growth concerns. At the same time, the Bank of England has adopted a more hawkish tone, signaling a renewed focus on inflation risks in its policy deliberations.
• A potential shift in monetary policy is also likely to influence foreign exchange markets. When investors expect foreign central banks to adopt a more hawkish stance than the Federal Reserve, their currencies tend to appreciate against the dollar, and the reverse is true when they are seen as more dovish. As a result, the dollar could weaken if other central banks are viewed as more assertive than the US in responding to inflation.
• Futures markets have so far priced in a hawkish pivot globally as investors react to rising inflation risks. Following the recent central bank meetings, futures now imply that the US has shifted from one rate cut to holding steady, while expectations for the BoE and ECB have moved from unchanged policy to as many as two hikes this year. By contrast, the implied probability of a rate hike by year-end for the Bank of Canada and the Bank of Japan has remained largely unchanged.
• In the near term, the dollar is likely to find support as investors raise cash and seek safety amid sharply higher oil and energy prices. However, this strength could fade once the conflict begins to stabilize, particularly if the Federal Reserve rules out the possibility of further rate hikes. In that scenario, a weaker dollar could re‑emerge over time, depending on how the situation in Iran evolves in the coming weeks.

US Reinforcements: Now entering its third week, the conflict with Iran appears to be shifting into a new phase. On Thursday, the Pentagon submitted a $200 billion supplemental funding request to the White House to continue ongoing military operations. At the same time, several US allies pledged formal support for Washington’s efforts to secure and reopen the Strait of Hormuz. The shift follows Israeli assessments that the campaign has effectively destroyed much of Iran’s uranium enrichment and ballistic missile infrastructure.

• The proposed surge in defense spending is expected to receive a cool reception on Capitol Hill. Defense Secretary Pete Hegseth said the funds would be used to replenish critical weapons and ammunition expended in the campaign, likely pushing stocks above prewar levels. House leaders have signaled that they are prepared to take up the legislation, but its passage is far from assured, given the GOP’s slim majority and Democrats’ outright opposition.
• Internationally, NATO partners appear eager to ease tensions with Washington by committing to help secure the Strait of Hormuz. On Thursday, seven allies — the UK, Japan, France, Germany, Italy, the Netherlands, and Canada — joined a pledge to take appropriate measures to ensure safe passage through the waterway. Although the statement did not explicitly commit naval forces, it signals a growing willingness among these countries to coordinate military efforts to protect vital sea lanes.
• The escalating costs of the war may be pushing the US and Israel toward a point where declaring victory becomes an appealing option. However, whether this happens within days remains unclear, as it would likely require a settlement that leaves the current Iranian regime in place — a prospect that seems improbable given the ongoing attacks. Furthermore, even if a declaration is made, there is no guarantee the conflict will not reignite, particularly given the network of Iranian proxy groups across the Middle East.
• While a de-escalation should reduce geopolitical uncertainty and offer some relief for equities, attention will quickly shift to logistics. Reopening trade routes, restoring production, and preventing a spike in interest rates driven by higher inflation expectations and heavier debt issuance are likely to become key priorities. In this environment, firms that are less energy-intensive and carry relatively low debt burdens should be better positioned to benefit from the transition.

No Export Bans: The White House has so far ruled out imposing a ban on crude oil and natural gas exports to keep domestic energy prices in check. The decision comes as the Trump administration explores ways to cushion households from the economic fallout of the conflict. While an export ban could lower prices at home, it would likely drive them higher globally. The refusal to take that step may increase pressure on Washington to pursue diplomatic off-ramps to the war instead.

NATO Tensions: Denmark was preparing for the possibility of a US invasion earlier this year. The government sent soldiers with explosives to Greenland to destroy a runway near the capital, as well as a former fighter base, if necessary. They were also supplied with blood reserves in case they were forced to confront US forces. This approach was backed by France and Germany, underscoring growing distrust of the US among key allies. We believe this could signal that Europe intends to become less dependent on the US for its security.

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by Patrick Fearon-Hernandez, CFA, and Thomas Wash

[Posted: 9:30 AM ET] | PDF

Our Comment begins with our take on the latest Federal Reserve announcement, followed by an update on the conflict in the Middle East. We then turn to key market developments, including the US softening its assessment of China’s ambitions toward Taiwan, the Bank of Japan’s decision to hold rates steady, and an Apple supplier’s move to diversify its rare earth supply chain. As always, we also include a summary of recent US and international economic data releases.

Fed Stands Pat: The Federal Reserve kept rate cuts on the table after its two‑day meeting, while signaling that officials are still digesting the implications of the ongoing conflict. On Wednesday, the Fed voted 11–1 to leave the policy rate unchanged at a target range of 3.50% to 3.75%, with Governor Stephen Miran dissenting in favor of an immediate cut. While the rate announcement appeared to have a dovish tilt, the forward guidance from the press conference and the Summary of Economic Projections made clear that policymakers have not yet settled on a firm policy path.

• During the press conference, Fed Chair Jerome Powell emphasized that while the committee expects higher energy prices to put upward pressure on both headline and core inflation, it does not yet have a clear sense of how large or persistent that impact will be. He also noted that tariff‑related goods inflation remains a key driver of current price pressures and said policymakers are watching for signs that those effects begin to fade over the coming months, even as the war adds a new layer of uncertainty to the outlook.
• Powell further cautioned against the over‑interpreting of the Summary of Economic Projections, stressing that the evolving conflict and associated oil shock could significantly alter the outlook in the near term. That uncertainty is reflected in the new SEP, where Fed officials marked up their 2026 forecasts for growth and inflation while leaving their unemployment estimate broadly unchanged and still signaling just one rate cut this year.
• While the inclusion of a rate cut in the Fed’s projections may look dovish at first glance, Powell made clear it is far from guaranteed. He stressed that the committee will not begin easing until it has “greater confidence” that inflation is moving sustainably toward the 2% target. That caveat weighed on market sentiment, reinforcing speculation that, with the Middle East conflict likely to push prices higher in the near term, inflation could drift further from target and make even a single 2026 cut harder to deliver.
• Moreover, given that this is likely to be Chair Powell’s final Summary of Economic Projections, we see it as carrying limited weight for the future policy path. While a sharp policy shift could become necessary if the growth or inflation outlook changes materially, we expect Powell and the Committee to refrain from major adjustments at that meeting, preferring instead to hand over a clean slate to his successor. In our view, this reduces the likelihood of the Fed moving rates, in either direction, before the summer.

A Push for Calm: Attacks on energy facilities around the Red Sea and the Persian Gulf have prompted President Trump to call for calm. On Wednesday, both Israel and Iran struck critical energy infrastructure in the region, with key natural gas and oil installations in Iran, Qatar, and Saudi Arabia reportedly affected. The resulting supply disruptions pushed Brent crude above $115 a barrel, with prices at risk of testing $120 if the conflict continues to escalate.

• The rise in energy prices comes as the war continues to intensify. President Trump has used the latest attacks to urge both sides to stop striking energy infrastructure, while tying that restraint to a new threat of US retaliation. He has pledged that Israel will carry out no further attacks on Iran’s South Pars gas field unless Tehran hits Qatar again, and he warned that in that case the United States would “massively blow up” the field itself.
• The call for calm comes amid growing signs that the war could trigger a broader global energy crunch. European countries have already seen a sharp rise in energy costs, with benchmark gas prices jumping since Iran’s attacks on natural gas facilities in Qatar. At the same time, several Asian governments are exploring ways to conserve fuel to avoid straining supplies, and there is mounting concern that some African nations could face outright shortages if disruptions persist.
• The longer facilities remain damaged or shut in, the more protracted the process of restoring normal production will be. Because many petroleum extraction and storage sites are not designed for extended periods of inactivity, prolonged downtime can complicate maintenance, accelerate equipment degradation, and ultimately make it more difficult and costly to bring capacity fully back online once the conflict subsides.
• The timing of any resolution to the conflict remains highly uncertain, but its economic aftershocks are likely to persist for weeks, and in some cases months. In our view, this raises the risk of an uptick in inflation as supply disruptions and precautionary buying push energy prices higher. Against this backdrop, we expect energy companies to fare relatively well, as tighter supply and elevated prices are likely to support margins for producers.

US Reduces Alarm: The US intelligence community’s latest Annual Threat Assessment marks a notable shift in its outlook on Taiwan, stating that Beijing does not currently plan to execute an invasion by 2027. While Beijing remains committed to reunification, the report suggests that China has no fixed timeline for this objective and maintains a strong preference for a peaceful resolution over military conflict. This more tempered outlook also reflects a softening of tensions between the US and China as both sides explore the possibility of another trade agreement.

Bank of Japan: The Bank of Japan left its benchmark interest rate unchanged at 0.75%, citing heightened uncertainty stemming from the conflict in the Middle East. In his press conference, Governor Kazuo Ueda indicated that policymakers are trying to look through the short‑term effects of the turmoil and keep the option of an April rate hike on the table. The decision, coming shortly after the Federal Reserve also chose to hold rates steady, underlines that major central banks are inclined to be patient and data‑dependent as the conflict unfolds.

US Decoupling: Apple supplier Murata Manufacturing plans to reduce its reliance on Chinese rare earth elements over the next three years. This shift comes as nations increasingly seek to insulate their supply chains from geopolitical volatility, particularly after China utilized its rare earth dominance as leverage in trade negotiations. Diversification is expected to become a defining global trend as industries strive to mitigate vulnerability to future supply shocks.

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by Patrick Fearon-Hernandez, CFA, and Thomas Wash

[Posted: 9:30 AM ET] | PDF

Our Comment opens with our views on the upcoming Fed announcement following its two-day meeting. We then provide an update on the conflict in the Middle East. Next, we highlight key market developments, including a US company’s acquisition of a mining firm in Africa, Beijing’s greenlight for Nvidia to sell more chips into China, and the drag on the Chinese economy from higher aluminum prices. As always, we include a summary of recent US and international economic data releases.

Fed Thoughts: The FOMC will issue its statement and hold a press conference after its two-day meeting, setting out its latest views on inflation and the economic outlook in the wake of the recent Middle East conflict. In the run-up to the decision, markets have pared back expectations for rate cuts this year, and some participants are even speculating that a hike could be back on the table. Fed funds futures now price in roughly one rate cut over the course of the year, and the outcome of this meeting is likely to be a key driver of Wednesday’s market action.

• In the run-up to the meeting, there were already signs that some Fed officials were growing more cautious about cutting rates. Minutes from the prior meeting suggested that the combination of prospective tariffs and a stronger-than-expected economy warranted at least a shift in the committee’s language, including clearer guidance on the conditions under which another rate hike could be considered if inflation failed to make progress toward the Fed’s 2% target.
• The escalating conflict in the Middle East is likely to push US officials toward a more hawkish stance. Just before the Fed entered its 10-day blackout period, several officials downplayed the possibility of further rate cuts. Both Boston Fed President Susan Collins and Minneapolis Fed President Neel Kashkari signaled their opposition to another cut this year. Meanwhile, New York Fed President John Williams acknowledged the risks but left the door open for a potential move.
• Although the market expects the Fed to moderate its rate-cut outlook, attention will remain fixed on any signals of a potential hike. The last major oil shock, in 2022, prompted the Fed to aggressively tighten policy to address supply and demand imbalances. This time, however, a less tight labor market and considerably lower inflation suggest the central bank may have more room for patience before considering a similar action.
• While we expect the Fed to keep rates on hold, a pivot in signaling from cuts to potential hikes could still provoke a sharp market reaction. Any indication of future tightening would likely amplify concerns that the economy may come under increasing strain from the combination of higher interest rates and elevated oil prices. In turn, this could spur a broad de‑risking shift, pushing investors toward a more defensive stance in their portfolio positioning.

US Fights On: The US-Israeli conflict with Iran has kept oil prices below $100 a barrel, though they remain elevated as the timeline for a resolution remains unclear. On Tuesday, President Trump stated that the US is prepared to act unilaterally to defend the Strait of Hormuz following pushback from NATO allies. Simultaneously, Iran has intensified its regional campaign, targeting natural gas facilities in the UAE. Despite these tensions, equity prices have remained resilient, as the market continues to have optimism that conditions will not worsen from here.

• The White House appears determined to press ahead with the conflict as it seeks to disarm Iran. In an Oval Office meeting, the president sharply criticized allies that refused his request for assistance in the strait, openly questioning their loyalty but vowing to continue the campaign. He has also ordered continued strikes on Iran’s key oil facilities on Kharg Island in an effort to pressure Tehran back to the negotiating table.
• Iran’s security establishment has suffered a major setback following the confirmed death of Ali Larijani, a key architect of the country’s military strategy. His loss removes one of Tehran’s more pragmatic power brokers, potentially tilting the balance of power in favor of hardliners. Yet despite the blow, Iran remains resolute in pursuing its campaign to disrupt maritime traffic through the Strait of Hormuz.
• While some investors fear oil prices could breach the psychologically significant $100 mark, broader market sentiment reflects confidence that such a move is unlikely in the near term. The White House has been actively working to stabilize energy supplies and prevent a sharp price surge. On Tuesday, it announced plans to ease sanctions on Venezuela to help ease supply constraints and authorized the reopening of an offshore oil pipeline in California.
• So far, markets have largely digested the conflict through a rotation rather than a broad-based selloff. The S&P 500 is only modestly lower year-to-date, even after a relatively weak start, while the S&P SmallCap 600 index and S&P MidCap 400 have surrendered most of their earlier gains. We expect large caps to continue to outperform if the conflict worsens, but we see room for that leadership to reverse should geopolitical tensions begin to ease.

US Mining Expansion: A US-based minerals company is set to acquire a mining operation in the Democratic Republic of the Congo. The deal reflects a broader shift in Washington’s Africa strategy, moving from humanitarian aid toward strategic investment partnerships. The DRC, the world’s largest producer of cobalt and the second-largest producer of copper, sought US security assistance in exchange for its mineral wealth. The move highlights that the US is building close relationships with countries through security rather than trade guarantees.  

China Approves Chips: Nvidia has received approval from Beijing to resume selling certain chips into China. This decision will allow the company to once again supply its H200 processors to Chinese firms, following a tense standoff between Washington and Beijing over chip and materials exports aimed at curbing each side’s AI ambitions. While the partial resumption of trade suggests a modest easing in tech‑related trade frictions between the two powers, it is unlikely to mark the end of their broader strategic dispute.

Aluminum Woes: A pickup in aluminum prices has begun to dampen demand in China, as many manufacturers grow reluctant to place new orders. The resulting drag on aluminum-intensive activity is likely to weigh on the economy at a time when it is already contending with higher oil prices and tighter trade tariffs. Taken together, these pressures suggest that the conflict in Iran is likely to further restrain China’s growth outlook.

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by Patrick Fearon-Hernandez, CFA, and Thomas Wash

[Posted: 9:30 AM ET] | PDF

Our Comment today opens with an update on the war in Iran. We next review several other international and US developments that could affect the financial markets today, including an interest rate hike by the Australian central bank that could signal similar moves around the globe and a move by President Trump to postpone his upcoming summit with Chinese President Xi.

United States-Israel-Iran: According to the Wall Street Journal late yesterday, Iran’s security forces have launched a new crackdown on domestic dissent aimed at preventing any uprising that could threaten the regime’s power. While the crackdown isn’t yet as violent and lethal as the one in January that killed thousands, it does suggest that the government can still control society and that rising popular unrest is not likely to put an end to the war, at least for the time being.

• In another key development overnight, Israel said it had killed Iranian security chief Ali Larijani, who had been seen as a key force in Tehran’s aggressive military response to the US-Israeli attacks. Tel Aviv also said it killed the commander of Iran’s Basij paramilitary force, which the regime uses to tamp down domestic dissent.
• Separately, the US allies that President Trump has asked to help secure shipping through the Strait of Hormuz are showing varying signs that they aren’t interested. For example, German Chancellor Merz and his defense minister, Boris Pistorius, have rejected the idea outright, with Pistorius saying, “This is not our war. We did not start it.” Japan, Australia, the UK, and France have also indicated they’re unlikely to send navy ships. The news appears to be pushing oil prices some 3.3% higher this morning.

Pakistan-Afghanistan: Hundreds of people are feared dead after an air strike on a hospital in Kabul that the Afghan government blamed on Pakistan. The Pakistani government has denied the allegation of civilian casualties, but the incident nevertheless suggests that the ongoing tensions over cross-border terrorist attacks could blow up into a full-scale war. That would not only mean a second major war in Asia, but because of Pakistan’s arsenal of nuclear weapons, it could also be deeply unsettling for global financial markets.

Australia: The Reserve Bank of Australia today hiked its benchmark short-term interest rate by 25 basis points to 4.10%, marking its second increase in the last two months. In its statement, the RBA said the rate hike was needed to address “the expected inflationary implications of the conflict in the Middle East.” The move could be taken as a harbinger of rate hikes by other major central banks as the Iran war continues to push up global commodity prices.

United States-China: In a press conference yesterday, President Trump said he has asked the Chinese government to delay his summit with President Xi that was set to begin at the end of March. According to the president, he requested a delay of about one month so that he can remain in Washington and manage the Iran war. The delay will prolong uncertainty in US-China trade relations, but the bigger story may simply be that Trump expects the war to last at least through the end of the month — a timeline that could well drive global energy prices higher.

United States-Cuba: As the US continues to essentially blockade energy shipments, authorities yesterday announced a massive failure of the power grid and a nationwide blackout. That means some 11 million people are currently without power. The result is likely to be further domestic protests and more pressure on the government to reach a deal with the US regarding dismantling its communist system and reducing its ties with US adversaries such as China.

US Monetary Policy: The Fed today begins its latest policy meeting, with its decision due tomorrow at 2:00 PM ET. Based on futures trading, investors almost unanimously expect the policymakers to hold their benchmark fed funds interest rate at its current range of 3.50% to 3.75%. The real news may come from Chair Powell in his post-meeting presser. The most market-swaying items he could touch on include whether higher wartime energy prices might require new rate hikes or whether he’ll leave the Fed board at the end of his term as chair.

US Stock Market: The Wall Street Journal reported yesterday that the Securities and Exchange Commission is preparing a rule change that would give publicly listed companies the option to publish their financial reports just twice per year instead of the current quarterly requirement. The change could be proposed as early as next month, at which point it would be subject to a public comment period and then an SEC vote. If finally approved, the change would help firms save money, but at the expense of financial transparency.

US Labor Market: Unionized workers at a key JBS beef-processing plant in Colorado remain on the picket lines today after launching a strike for better pay yesterday. The affected plant reportedly accounts for about 5% of domestic beef consumption, suggesting that a prolonged work stoppage could cut supplies enough to drive up prices. On top of the higher energy prices already evident from the war against Iran, the result could be even higher consumer price inflation and more political headwinds for the Republicans in November’s elections.

US Precious Metals Market: The Wall Street Journal yesterday carried an interesting article noting that several states — including Georgia, Tennessee, Wyoming, and Utah — have now passed or considered legislation requiring them to hold some of their investment assets in gold bullion. The amounts bought so far are small, but the news provides further evidence of how growing geopolitical frictions and the threat of currency debasement are spurring greater demand for precious metals.

US Artificial Intelligence Industry: At AI chip darling Nvidia’s annual developers’ conference yesterday, CEO Jensen Huang announced an array of new products and services aimed at making AI models more efficient and ushering in the age of “inference.” Importantly, Huang also predicted that Nvidia would sell $1 trillion of its current cutting-edge chips, Blackwell and Rubin, by the end of 2027.

• Investors so far seem to be taking Huang’s announcements as signs that the firm can keep innovating and adding value as the AI industry evolves.
• In pre-market trading so far this morning, Nvidia’s stock price is up 0.2% to $183.57 per share.

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by Patrick Fearon-Hernandez, CFA, and Thomas Wash

[Posted: 9:30 AM ET] | PDF

Our Comment today opens with an update on the US-Israeli war against Iran and President Trump’s call for foreign nations to chip in with naval forces to restart the flow of oil, natural gas, and other commodities through the Strait of Hormuz. We next review several other international and US developments with the potential to affect the financial markets today, including a preview of this week’s many central bank policy meetings around the world and the start of talks on updating the USMCA trade agreement.

United States-Israel-Iran: President Trump on Saturday called on foreign countries such as China, France, and Japan to send naval forces to the Persian Gulf to help secure commercial shipping traffic through the Strait of Hormuz. The call has produced political headaches for countries as it would put their navy ships at risk for a war they didn’t start. They also may be reluctant to contribute if they feel they can’t rely on the US military coordinating with them. Still, in the interest of easing energy prices, many are mulling whether and how to help.

• Separately, US Energy Secretary Chis Wright yesterday warned that there are “no guarantees” that oil prices would fall in the coming weeks,” despite rosier assessments from the White House.
• Indeed, the Wall Street Journal reported over the weekend that top US energy firms such as Exxon Mobil and Chevron have warned the US administration that energy prices could well keep rising as long as hostilities continue.
• On a more positive note, however, Iranian Foreign Minister Araghchi said yesterday that the strait “is open to everyone, except American ships and those of its allies.” That could suggest that Iran is open to letting some shipping through the strait, although ship owners, crews, and insurers are still likely to avoid the area until the fighting ceases definitively.
• On balance, investors appear to be encouraged by the weekend developments, pushing oil prices lower so far today and giving a boost to US stock index futures.

Global Monetary Policy: Major central banks from the Federal Reserve to the European Central Bank and the Bank of England will hold their latest policy meetings this week, and all are expected to hold their benchmark short-term interest rates unchanged as they gauge the potential impact of the Iran war on consumer price inflation. The Fed will open its meeting on Tuesday and will release its decision on Wednesday at 2:00 PM ET. Investors are nearly unanimous in expecting it to hold its fed funds rate at the current 3.50% to 3.75%.

United Kingdom: In response to the massive jump in natural gas prices touched off by the war against Iran, the British energy industry is reportedly pressuring the government to boost the country’s investment in gas storage facilities. The aim would be to give the UK economy emergency reserves that could help it better weather supply shocks. More broadly, we see the effort as consistent with our view that global fracturing and rising geopolitical tensions will spark more hoarding of natural resources and drive up commodity prices over the longer term.

Cuba: With the US continuing to essentially blockade oil deliveries to Cuba even as it wages its war against Iran, reports show a growing number of Cubans are protesting against their regime. The growing protests suggest the US policy is prompting greater popular unrest, which could potentially encourage further US pressure on Cuba once the US administration can divert its attention from Iran.

United States-Mexico-Canada: The US and Mexico today launch their long-planned review of the USMCA free-trade agreement that was struck in 2020 to replace the previous NAFTA deal. The talks will focus on curbing imports from Asia and other regions, tightening the rules that make products eligible for USMCA benefits, and improving North America’s supply chain security. However, the US administration has indicted its displeasure with the trade deal, so the result could well be a significant weakening of it, to the detriment of Mexico and Canada.

US Monetary Policy: A federal judge late Friday invalidated the Department of Justice’s subpoenas against the Federal Reserve and Chair Powell, accusing the White House of issuing them for political purposes. According to the judge, “There is abundant evidence that the subpoenas’ dominant (if not sole) purpose is to harass and pressure Powell either to yield to the President or to resign and make way for a Fed Chair who will.”

• The DOJ has already said it will appeal the ruling, potentially delaying the confirmation of Kevin Warsh as the new Fed chair.
• That means the Fed is likely to continue holding its benchmark short-term interest rate steady at its current high level. As we have argued in the past, any rate cuts this year are likely to be backloaded in the second half of 2026.

US Private Credit Industry: In new research published today, credit hedge fund Davidson Kempner Capital Management warns that the private capital industry’s problems are far worse than Wall Street has acknowledged, as traditional metrics obscure weaknesses in the leveraged buyout market. The analysis indicates that excessive leverage, weak cash flows, and loose debt contracts have converged to significantly boost the risk of defaults. The news will likely raise further concerns about growing risks in the US financial system.

US Movie Industry: At last night’s Academy Awards ceremony, Warner Brothers production One Battle After Another won six Oscars, including for best picture and best director. The movie beat out Sinners, also from Warner Brothers, which won four Oscars.

China: Retail sales in January and February were up 2.8% from the same period one year earlier, roughly matching expectations and accelerating from a gain of 0.9% in the year to December. Fixed-asset investment in the same period was up 1.8% on the year, beating expectations and reversing part of its 3.8% decline in 2025. Despite the improved figures, however, home sales in the period were down 22.0% year-over-year, reflecting how the lingering effects of China’s real estate bubble continue to weigh on economic growth.

France: In the first round of local elections yesterday, the far-right populist National Rally did well across the country, including in the southern areas it was prioritizing. That sets the party up to sharply increase its local political power after the run-off elections of March 22. The elections are being taken as an indicator of how well National Rally could do in the presidential election next year. If it wins the presidency, France would likely undergo major policy changes, such as embracing Russia in foreign policy and enacting populist economic policies at home.

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