The war in Iran continues to dominate the news and the markets. Oil prices are higher, because the Strait of Hormuz remains mostly closed. The U.S. has lifted sanctions on Russian and Iranian oil in the hopes that oil prices will stabilize or even fall, but that resulted in Iran now earning more from its oil than it did before the war started. Meanwhile, the Houthis in Yemen have begun bombing Israel, potentially opening a second front in the Israeli war effort. American troops are heading to the theater of war, and U.S. saber-rattling about a ground invasion has people everywhere worried. In a related story, the maximum enlistment age for U.S. service people has just been raised from 35 to 42.
Stock prices are lower, with all three major indices down for a fifth-straight week. The Standard & Poor’s has fallen 7% this year so far, while the Dow Jones Industrials and Nasdaq Composite Index are both in corrections, having dropped by more than 10%. The energy sector is the sole bright spot in stocks. Still, as the Wall Street Journal points out, company-earnings forecasts have RISEN since the start of the war, and the AI boom is continuing with its almost bottomless hunger for microchips and data centers. Both influences should help slow the current drop in stock prices.
Bond prices are also falling – pushing yields higher. The ten-year Treasury Note is now yielding more than 4.4%, up from a recent low of 3.96% at the end of February.
Investment money has only so many places it can go, and with investors selling shares AND bonds, it seems like money is moving into cash at this point. Perhaps with so many conflicting signals coming out of the White House, a wait and see attitude makes sense. But we do not recommend abandoning your allocations to stocks and bonds, since historically markets will recover more quickly than expected, and those on the sidelines may well miss the move.
The Organization for Economic Cooperation and Development (OECD) is now predicting that U.S. inflation will spike to 4.2% this year due to the war and energy prices. Prior to the war, the OECD was predicting 2.8%. Brent crude, the international standard, has jumped 59% in price this month – more than it rose in the 1990 Gulf War. Fuel surcharges are already being added to airline tickets and cruise packages, and standard mortgage rates have climbed to 6.64%
With the U.S. debt approaching $39 trillion dollars, one wonders why the world continues to buy Treasurys. Yale economist Martha Gimbel compared the Treasury market to a Hallmark movie: the big city developer will seem like an acceptable boyfriend only until our heroine meets the lovable small-town veterinarian. In other words, Treasurys will continue to dominate only until an attractive substitute is found.
Meta (parent company of Facebook) and YouTube (where you can learn to knit while singing along to your favorite oldies) were both found guilty of negligence in the design of their products – causing harm to children. And in a related story, Mark Zuckerberg is building a personal AI agent to help him better perform as Meta’s chief executive. So first, a qualified yay, since a bot may do less harm in this situation than Zuckerberg has done, and second, I bet Zuckerberg’s personal AI won’t allow endless doom scrolling, deepfakes of children, and angry faces from his competitors.
There is random talk about capping Social Security benefits at $100,000 per year. This move would extend the life of the Social Security trust fund by seven years.
Remember the halcyon days of the pandemic when changing jobs was often accompanied by a big raise in salary? (Other than that, of course, it was a terrible time.) Nowadays 40% of white-collar workers who changed jobs at the end of 2025 took salary CUTS. Why change jobs at all? Perhaps to avoid being laid off. March’s jobs report is due to be released this coming Friday. In February we saw a loss of 92,000 jobs.
An asteroid the size of a house passed Earth last week, along with four others which created fireballs in the sky visible to the naked eye. Worried about an asteroid hitting YOUR house? You can track activity in the sky with NASA’s Asteroid Watch. (https://www.jpl.nasa.gov/asteroid-watch/)
For the week ending on March 27th, the S&P 500 finished at 6,386, The Dow at 45,166, and the Nasdaq at 20,948. The yield on the ten-year Treasury Note closed the week at 4.44%. U.S. crude oil costs $101.05 per barrel today, while Brent crude costs $114.31 per barrel. The bid for New York gold is approximately $4,550.50 per ounce, and one Euro is worth $1.15.
Elizabeth E. Cook
Partner, Diastole Wealth Management
News and information presented here was gathered from sources believed, but not guaranteed, to be reliable, including (but not limited to) Morning Brew, Barron’s, The Wall Street Journal, Yahoo Finance, Axios, Forbes, The Washington Post, CNBC, MSNOW, Fortune, The Week, Bloomberg and Bloomberg BusinessWeek, Gallup, The Hustle, CNN, Reuters, USA Today, and the AP. If you have questions, please call Diastole at 203.458.5220, or write to me, Liz Cook, at ecook@dwinvest.com. Thank you for reading!
According to Nestle, 12 tons of KitKat candy bars were stolen as they were trucked between Italy and Poland. That’s 413,793 KitKats in total. One must ask, was marijuana just decriminalized in that part of Europe?