The U.S. energy industry is quickly emerging as a winner from the military action against Iran. The Republican Guard in Iran has declared that the Strait of Hormuz is now closed for shipping. Qatar suspended its LNG exports for the first time in 30 years, so the U.S. dominance over LNG exports will likely increase.
Brent crude oil prices are now $84 per barrel, and WTI crude oil prices are also surging, so many U.S. energy companies will likely reap windfall profits as Iran attacks energy infrastructure in Qatar and Saudi Arabia. The price of shipping is rising as routes get longer and insurance costs rise, so for the time being, war-related inflation has emerged.
Other immediate winners from this military action are the U.S. dollar, , and defense-related stocks, like , , and . Normally, military actions do not disrupt the stock market, but it is imperative that the ongoing military action is fast and furious, so it is over quickly. Under no circumstances does the U.S. want American hostages in Iran, since that was what destroyed Jimmy Carter’s presidency.
The Financial Times reported that the private credit industry continues to lose its mojo as the fund freeze impedes other private credit companies like , , , and . As an example, Blackstone’s flagship private credit fund, BCRED, has been hit with $1.7 billion in redemption requests in the first quarter, which represents 7.9% of its assets.
Traditionally, Blackstone likes to limit its redemption requests to 5%, so if the redemption requests continue to accelerate, it is possible that Blackstone will follow Blue Owl and freeze redemptions. Naturally, another private credit freeze would likely cause a selling panic, so Blackstone is apparently going to try to meet all redemption requests for the time being.
Meanwhile, the Institute of Supply Management (ISM) announced that its was 52.4 in February, down just a bit from 52.6 in January. This was the second month in a row that the ISM manufacturing index rose above 50 and signaled an expansion. The best news was that the backlog of new orders component surged to 56.6 in February, up from 51.6 in January. It is possible that severe winter weather in February helped to boost the new order backlog. Overall, fully 12 of the 17 industries that ISM surveyed reported an expansion in February.
