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Potential near-term stock market volatility is linked to geopolitical tensions in the Strait of Hormuz.
The US economy is experiencing accelerating inflation in the components monitored by the Federal Reserve.
Core PCE inflation, on a three-month annualized basis, is currently at 4.4%.
Super core PCE inflation is currently at 4.5% on a three-month annualized basis.
42 Macro estimates that trend productivity growth in the US is accelerating by 150 to 200 basis points.
The widespread adoption of AI technology is expected to cause a convergence in productivity, profit margins, and valuations between early adopters like mega-cap tech and the rest of the market.
The doubling of AI-related capital expenditures in a single year indicates the sector is in a bubble.
Global oil inventories increased by approximately 700 to 800 million barrels in the 12 months prior to the recent supply disruption.
If the current oil supply disruption continues, global inventories could fall to levels by the third quarter that would support Brent crude prices of $150-$180 per barrel and refined product prices above $200 per barrel.
Pangea Policy assesses the risk of a resumption of military hostilities with Iran as significant and not merely a short-term trading risk.
The White House's conditions for de-escalating the conflict with Iran are contingent on Iran abandoning its nuclear ambitions and reopening the Strait of Hormuz.
The current US strategy is based on the belief that escalating economic pressure will compel Iran to concede to US demands before the conflict causes severe global repercussions.