Good morning investors! Fear appears to have overtaken the market as the situation in the Middle East continues to worsen. Israel now expects the war to continue for another four weeks at least.
Today we cover:
What to expect this week
Luxury brands to lose
Memory stocks under question
📊 Economy and News
What to Expect This Week
Here’s what to keep an eye on this week:
Monday, March 16
Industrial production & capacity utilization (Feb).
Empire State manufacturing survey (Mar), NAHB homebuilder confidence (Mar).
Earnings: Dollar Tree (DLTR), Science Applications International (SAIC).
Tuesday, March 17
Pending home sales (Feb).
Earnings: Tencent Music (TME), Lululemon (LULU), Oklo (OKLO), DocuSign (DOCU).
Wednesday, March 18
FOMC interest rate decision & statement.
Fed Chair Jerome Powell press conference.
Producer Price Index (PPI, Feb), factory orders (Jan).
Earnings: Micron Technology (MU), Jabil (JBL), General Mills (GIS), Williams-Sonoma (WSM), Five Below (FIVE), Macy’s (M).
Thursday, March 19
New home sales (Jan).
Initial jobless claims, Philadelphia Fed manufacturing survey (Mar), wholesale inventories (Jan).
Earnings: Alibaba (BABA), Accenture (ACN), FedEx (FDX), Darden Restaurants (DRI), PlanetLabs (PL).
Friday, March 20
Earnings: Xpeng (XPEV).
Global hits:
Oil spike may trim global GDP by 0.3%, push inflation higher.
IEA says 411.9 million barrels of oil from emergency reserves to be released.
Oil poised for further gains as Middle East conflict threatens export facilities.
Reminder: Global luxury brands face a modest but localized sales hit from the escalating Middle East conflict, according to a Bernstein report. The region, now a key growth driver rivaling Japan and accounting for about 6% of total sector sales (closer to 8% for major players like LVMH, Richemont, and Kering), has seen sharp disruptions as "airport doors" largely close, slashing tourist traffic and affecting roughly 9% of the retail network. Bernstein expects March regional sales to halve—primarily due to collapsed tourism—resulting in a manageable ~1% (100 basis points) headwind to overall Q1 2026 sales.
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📈 Stocks
S&P 500 6,632.19 (-0.61%)
DJIA 46,558.47 (-0.26%)
NASDAQ 22,105.36 (-0.93%)
BRENT CRUDE 103.01 (+0.42%)
* Prices as of Mar 15th, 12:20 AM UTC
Memory Chips Under The Limelight
Bank of America remains relatively optimistic about memory chip production resilience. The bank recently raised its outlook for the global memory market, forecasting stronger DRAM and NAND pricing alongside improved 2026 revenue growth driven by AI demand.
BofA highlighted that concerns over supply disruptions from the Iran conflict appear contained for now. Memory chipmakers maintain 4–6 months of key material inventories (including helium and bromine, partially sourced from the Middle East), and companies have diversified sourcing to the U.S. and Japan.
Energy supply risks to major hubs in Taiwan, South Korea, and Japan also seem manageable due to alternative LNG shipments and backup power options. As a result, BofA does not anticipate production cuts tied to the conflict in the short term.
In contrast, Morgan Stanley sounded a more urgent alarm in its "Tech Bytes" report, warning of immediate vulnerabilities in the semiconductor supply chain. The closure of the Strait of Hormuz threatens a dual crisis:
Taiwan's "LNG cliff": Taiwanese foundries, including dominant player TSMC (which produces ~90% of advanced chips and consumes 9–10% of the island's power), hold only about 11 days of onshore LNG storage (with additional weeks possible from offshore vessels).
"Sulfur squeeze": Disruptions to Gulf oil refining limit sulfur supplies, a key input for sulfuric acid used in extracting copper and cobalt for chips, batteries, and data center expansion. This creates second-order bottlenecks for electrification and infrastructure.
Morgan Stanley cautioned that rising oil prices could deliver a "double whammy" — higher input costs combined with softer end-user demand from inflation-pressured consumers.
Interesting: Meta planning sweeping layoffs as AI costs mount.
💵 Personal Finance
Volatility Is Normal – Don’t Exit Stocks Now
UBS advises investors not to abandon equities despite heightened market volatility driven by geopolitical tensions, the Iran conflict, and oil market disruptions.
While recent swings have raised uncertainty around growth and inflation, the bank emphasizes that such periods of stress are routine: since 1981, the S&P 500 has averaged a maximum intra-year drawdown of ~14%, yet long-term buy-and-hold strategies have historically outperformed attempts to time the market.
Volatility spikes (reflected in elevated VIX levels) have often preceded above-average 12-month returns, and missing even the best single week or quarter over decades can drastically cut total gains.
UBS points out that the S&P 500 has delivered positive returns in roughly 72% of calendar years since 1960.
Instead of exiting stocks, the firm recommends staying invested through diversified portfolios, with tactical additions of quality fixed income, gold, and alternatives to better manage risk during uncertain times.
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