Weekly Commentary: Lacking A Good Scenario

2026-03-28 06:00:26 ET

The problem, as I see it, is that fragile markets have more to lose with each passing day. And with each day of intense bombing, there is seemingly less to lose for the IRGC. As goes the markets, so go global economic prospects. Four weeks in, the likelihood of precarious escalation remains on a steady upward trajectory. Markets Friday began to accept the seriousness of an unfolding predicament not readily amenable to Trump and Fed "puts." With reliable backstops uncertain, markets must begin contemplating precarious scenarios for the first time in a while.

The Bloomberg MAG7 Index slumped 2.8% Friday, boosting the week's loss to 4.9% - with the index closing the week at the lowest level since August 1st (down 15.7% y-t-d). Friday's losses included Meta Platforms down 4.0%, Amazon 4.0%, Tesla 2.8%, and Microsoft 2.5%. For the week, Meta sank 11.4%, Alphabet 8.9%, Microsoft 6.6%, Nvidia 3.0% and Amazon 2.9%. Meta ended the week at the lowest close since April 23rd, Microsoft April 8th, Nvidia September 5th, and Alphabet November 28th. Amazon closed the week within 55 cents of the low back to May 9th. Air is leaking from the AI Bubble.

March 24 - New York Times (Maureen Farrell): "The private credit industry, a once-booming corner of the lending markets, is facing an investor exodus and heightened scrutiny of its risky practices. The bad news seems to keep coming. On Tuesday, Ares Management, an investment firm with more than $600 billion in assets, said it would block roughly half of the redemption requests from one of its private credit funds. A day earlier, the private equity giant Apollo Global Management said the same of one of its funds… Also on Monday, the debt-ratings agency Moody's downgraded a private credit fund run by KKR to junk status, warning investors that a growing number of the fund's outstanding loans were not being repaid and that its profitability is at risk."...

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