Cease Fire Impacts
What a difference 24 hours makes.
It could be a false-flag drop in oil prices, but the war in Iran does place a geopolitical premium on oil. After the ceasefire was announced, oil prices plunged. West Texas Intermediate (WTI) fell nearly 16%, the biggest one-day decline since the early days of the COVID pandemic.
Even if things start moving, it will take weeks for this inventory to transit out of the Persian Gulf and reach destinations in India, Asia, and elsewhere.
The latest Durable Goods report showed mixed results. Overall, there was a 1.4% decrease to $315.5 billion. This was the third consecutive monthly decline. The drop was sharper than the -1.1% consensus forecast.
The decline was largely driven by a 5.4% plunge in transportation equipment.
Non-defense aircraft and parts plummeted 28.6%. Excluding transportation, new orders actually rose 0.8%. Business Investment Proxy: Core capital goods orders, which are a proxy for business investment, increased 0.9%, suggesting growth in business equipment spending.
The manufacturing outlook, according to the ISM Manufacturing PMI for March 2026, rose to 52.7%, indicating the sector continued to expand.
…And Where Do We Go from Here?
No one seems to know how the ceasefire will play out. Saying it’s over appears to be too optimistic. From a business perspective, it isn’t over yet whether the fighting is over or not.
Global supply chain challenges remain and will remain for months to come. Materials originating in Iran could be disrupted for some time, with economic repercussions for many parts of the world.
Whether there is a material improvement in supplies is the main question. It could take weeks or months for a full recovery. Furthermore, no one is positive that there will be any short-term reversal of price increases.
The optimal word for 2026 is fragile, as in this fragile ceasefire is affecting the fragile U.S. economy.
Read this week’s Brief for other market insights.
