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Investing in the current environment is becoming challenging. If you apply pure rational analytics, perhaps you should have a big portion of your portfolio in cash (for instance like Warren Buffett), but if you look at equity indices, we have regained all time highs. Also, inflation is picking up, so perhaps cash is not ideal when it comes to a long term investing plan. In the charts below, you can see that, using the S&P500 as a whole, the case is not compelling: CAPE Schill

US equity markets have re conquered all time highs. Perhaps it’s due to optimism on the end of the Iranian conflict, even though it’s still not clear when and how it will happen. Perhaps investors have decided to move on when they saw oil tankers coming to the US for oil. But it’s the debt market that requires attention. It’s also at an all time high. Debt keeps piling up. US Debt has grown almost 10X over the last 26 years (as of today national debt is $39.1Tn). For China, t

With everything that’s happening in the Middle East, the potential escalation with Turkey, the ongoing negotiations to reopen Hormuz, and the private credit issues, you would think the market should be down for the year. But it’s not. The S&P500 is up YTD, as you can see in the chart below. It’s actually 35 points from all time highs. The resilience of this market is remarkable. Perhaps the reason why investors have found renewed interest in the U.S. equity market has to do w

The economists at the Dallas Fed have published a study that, among other things, presents the impact on oil and US inflation of 3 quarters of continuous blockade in the strait of Hormuz. You can see see the results regarding oil in the chart below. $110/barrel for 1 quarter, up to $167 if it remains closed for 3 quarters. CPI could reach 5% annualized. That is a warm welcome to Kevin Warsh at the Fed. That is almost a guarantee of economic recession for the U.S. and Europe.

On Friday, the U.S. bureau of labor statistics published the March inflation report. The monthly increase was 0.9%, and the YoY price increase was 3.3%. In the chart below you can see that the jump was basically due to energy prices, linked to the conflict in Iran. The market thinks this is temporary. The news from Hormuz tells us it may be more permanent than we think. There’s a toll now imposed on we very ship that crosses thr strait, and now it appears that no ship is allo

The negotiations in Islamabad concluded after 21 hours with no agreement between the parties. The U.S. delegation, led by Vice President JD Vance will be returning to the U.S. without a deal on Hormuz, nuclear proliferation or conflicts through Iran armed proxy groups. No clear path forward has been stablished, which means we can see attacks again. Not clear if the ceasefire will stand. Since negotiations took place over a weekend, the only market reference we have is crypto,

The negotiations between Iran and the U.S. are about to begin. The U.S. delegation has arrived to Islamabad, and It appears that Iran has the upper hand. Interestingly, they has invited China and Russia as its witnesses. The US has invited Saudi Arabia and Qatar on its side. At the same time, the US has authorized the release of $6 Bn in frozen Iranian funds with Qatar and South Korea to arrange the transfer within days. The main objective seems to be opening the strait of Ho

The BEA published yesterday the thrid and final revision of the U.S. GDP for the fourth quarter of 2025. From the impressive 4.4% of the 3Q25, we went from 1.4% for the initial 4Q25 print, to 0.7% in the second revision, to 0.5% for the final one. All of them are annualized figures. In the chart below you can see the trend. The U.S. economy is slowing down, amd thanks to conflicts, and the rise in oil, we have sticky inflation, perhaps temporary. We have been in the temporary

As expected, the workable list of points presented by Iran was immediately violated, in this case by Israel, who took the opportunity to bomb Lebanon, trying to eliminate Hezbollah. Iran has responded by closing again the strait of Hormuz, so we’re back to square one. But are we? Oil has not moved back to the prior highs, and US equity futures are slightly down. Is the market starting to adjust to the consequences of the conflict? Or is it because China is starting to interve

Yesterday, Iran presented its "10-point plan" which includes the following terms: 1.  Complete cessation of the war on Iraq, Lebanon, and Yemen. 2.  Complete and permanent cessation of the war on Iran with no time limit. 3.  Ending all conflicts in the region in their entirety. 4.  Reopening the Strait of Hormuz. 5.  Establishing a protocol and conditions to ensure freedom and security of navigation in the Strait of Hormuz. 6.  Full payment of compensation for reconstruction

The asset coverage test (ACT) is a key leverage restriction under the 1940 Act, applicable to Business Development Companies (BDCs). BDCs are the public sister of Private Credit funds. The test measures a BDC’s ability to cover its senior securities (primarily outstanding debt/borrowings and any preferred stock) with its assets. Most BDCs today adhere to the lower coverage ratio of 150% (effectively 2:1 debt to equity) post 2018 (it used to be 200%), provided they have appro

It’s increasingly difficult to understand the status of the Iranian conflict. Just when you think both parties are close to reaching an agreement, there’s more bombing. And the situation changes, literally, by the hour. We’re in the latest 48h Trump ultimatum that coincides with the prior 10 day warning he published 10 days ago. But at the same time they seem to be negotiating a truce. Brent oil is down so far today, which means the market thinks the talks are real. But inve

The Iranian conflict has entered its second month with significant escalation involving direct US involvement alongside Israel. It has caused thousands of deaths (military and civilian) across Iran, Israel, Lebanon, and Gulf states, widespread infrastructure damage, displacement of millions, and disruptions to global energy markets thanks to the closure of the Strait of Hormuz. The situation remains fluid and highly escalatory, with risks of further missile exchanges, proxy i

Yesterday’s U.S. jobs report showed a surprisingly strong rebound in payroll job growth, with nonfarm payrolls rising by 178,000. The report delivered a positive surprise after February’s weakness (which included strike activity, weather, and other factors). The unemployment rate edged down to 4.3% from 4.4% (below the expected 4.4%). The number of unemployed people was roughly 7.2 million. Job growth beat expectations by a wide margin, suggesting the labor market has some u

The US Bureau of Labor Statistics (BLS) releases the Employment Situation report for March 2026 today, at 8:30am. What’s to be expected? The labor market showed signs of weakness in February: Nonfarm payrolls unexpectedly declined by 92,000 jobs and the unemployment rate rose to 4.4 %  (from 4.3% in January). Factors included a healthcare worker strike, weather impacts, federal government job cuts, and broader slowdown in hiring momentum. Consensus for March expects Nonfarm p

In a strange combination of diplomacy and military actions, both Iran and the US talked about peace and the need to end the conflict, while bombing each other and their allies. Words don’t matter in this conflict. It’s what they do that matters, not what they say. And the thermometer of the conflict, Brent oil, is up again 8% today. After an open letter where Iran President addressed the American people reassuring Persians have no emnity to Americans and that they are simply

Central banks are selling US treasuries and MBS. You can see the trend in the charts below. They have been, for the most part, buying gold instead of buying or holding US bonds. The trigger was the confiscation of Russian assets at the beggining of the Ukraine war, but the fiscal situation in the US has perhaps depended the concern about the strength of the U.S. dollar as a long term store hold of value. Gold has been sold (or swapped) during the Iranian war by Turkey and by

It is getting clearer by the day that Trump wants to get out of the war with Iran as soon as possible. The level of frustration is increasing rapidly, and patience is running thin. The latest announcement coming from the White House indicates that the U.S. may be ending the war without reopening Hormuz. This can be a tactic to test the public opinion on the matter or it could be just another maneuver to create confusion. In the chart below, you can see the price of West Texas

The Nasdaq 100 and the DJIA are in correction territory (-10%) from the maximums. The S&P500 will join them soon. Brent oil, just reached $116 and continues to inflict pain all over the world. The Iranian conflict shock, with the continued closure of the strait of Hormuz has changed the narrative, direction and leadership of the U.S. stock market. In January, it was still a growth story, with mag7, AI and the rapid intervention in Venezuela, at the center of the universe. Feb

The Iranian conflict is creating dislocations, with the blockage of Hormuz and its subsequent shock on oil prices. Take a look at the chart below: since the 70’s the ratio of gold vs oil has been contained in a range between 10-30 times. That was considered the norm. In 2020, thanks to COVID that ratio spiked to 70, as the world came to a stop, with minimum usage of oil, and gold spiked thanks to global monetary and fiscal stimuli. It it came back relatively quickly. What do