“If you do not know which port you are seeking, no wind is favorable.”
-Seneca
Here’s what you need to know this week:
- Stocks rise on ceasefire news
- Rising oil prices begin to impact inflation
- Negotiations fail and tensions return in Iran
Unbothered
Stocks posted strong gains last week on news of a (short-lived) ceasefire with Iran. The bulk of the gains came on Wednesday due to President Trump announcing the ceasefire on Tuesday evening. The price of oil fell more than 15% in one day and markets surged by more than 3%[1].
The ceasefire was on shaky ground from the start. Israel refused to stop bombing Lebanon despite Iran’s protest that Lebanon was included in the ceasefire. Vice President JD Vance traveled to Pakistan over the weekend to meet directly with senior Iranian officials but was unable to secure a broader deal[2]. Tensions have ratcheted up since then (more below) but markets continue to gain ground, seemingly undeterred by a prolonged conflict.
Inflation Returns
The latter half of last week saw two reports measuring inflation for US consumers. The first was the Personal Consumption Expenditures (PCE) report for the month of February, released on Thursday. The February report showed monthly inflation at 0.38% and annualized inflation at 2.8%, higher than the 2.6% that analysts expected[3].
The more important was the Consumer Price Index (CPI) report for the month of March. The CPI report was released on Friday and was the first inflation report to show the impact of rising oil prices on US inflation. The report showed monthly inflation at 0.9%, marking the highest monthly increase since 2022:
The report also showed annualized inflation at 3.3%, a sharp rise from the 2.4% rate in February:
Energy experts say oil prices may remain elevated even the conflict resolves quickly due to damage to oil infrastructure in the Middle East. If so, the subsequent elevated inflation may reduce the chances of interest rate cuts from the Federal Reserve this year.
Blockade the Blockade
President Trump announced a full blockade of the Strait of Hormuz beginning on Monday morning due to the impasse in Vice President Vance’s negotiations with senior Iranian leadership. He announced later on Monday that Iran was still willing to negotiate, sending stocks back into green territory[4]. Investors have mostly shrugged off the possibility of a broader conflict and the S&P 500 currently sits roughly 1% below its all-time high.
Tanker captains don’t have the luxury of ignoring the conflict. Satellite imagery shows hundreds of ships piled up on both sides of the Strait of Hormuz, unwilling to risk their cargoes (and their lives):
Oil traders are also taking the conflict seriously. Brent crude, the benchmark for oil prices in the Middle East, is currently trading at roughly $95 dollars per barrel:
While prices have declined from the highs of ~$115/bbl in March, we are still far above the average of ~$67/bbl from before the conflict began. A quick resolution is clearly in the best interest of consumers due to inflation, but for now investors seem surprisingly sanguine about the conflict.
What Else
- Ukrainian official Kyrylo Budanov told reporters that a ceasefire between Ukraine and Russia may be imminent
- Multiple attacks were carried out against the home of Sam Altman, CEO of OpenAI, highlighting a growing apprehension of artificial intelligence companies
- California gubernatorial hopeful Eric Swalwell suspended his campaign amid allegations of misconduct with multiple female staffers
- Rory McIlroy won the Masters on Sunday, becoming just the fourth golfer in history to win the tournament in back-to-back years
- The OKC Thunder secured home court advantage throughout the NBA playoffs and play their first playoff game this Sunday, April 19th
What We’re Reading
The Artemis II astronauts have successfully returned to Earth! The record-setting space mission was a smashing success and has helped pave the way for the Artemis IV mission to build a base on the moon in 2030. Click below to read about the mission, see photos of the spacecraft and space, and learn about the mission’s mascot Rise, created by a third grader from California:
What’s Happening Downtown
The Night Market at Scissortail Park returns this Friday, April 17th. The market occurs once per month during the warmer months and features more than 100 local vendors as well as live music, food vendors and activities. The market runs from 5:30 – 10:00 PM, click below to learn more:
To read more from our blog, click here
Written by: Kane Ogle, CFP®
Steve Beck, Kane Ogle, CFP®, Amber Eduvigen, CFP®, Cale Olbert, CFP®, Brett Valentine, CFP®, Brandon Ingerson, Bill Daniel, Sam Postich, Jenni Hess
[1] Bloomberg [2] AP [3] Morningstar [4] Yahoo! Finance