Pre‑Market
Briefing

Big Bank Equity Strategy

Wall Street Year-End Targets — The Street Is Dividing in Real Time

JPMorgan

Dubravko Lakos-Bujas cut his official S&P 500 year-end target to 7,200 from 7,500, making JPMorgan the second-lowest on the street ahead of only BofA’s 7,100. He warns traders have grown complacent assuming a quick war end: this is a high-risk assumption given that S&P 500 and oil correlations typically turn increasingly more negative after a roughly 30% oil spike. JPMorgan Prime Brokerage separately notes equities look more vulnerable than bonds from a positioning perspective in both developed and emerging markets; long/short equity funds are down approximately 3.4% in March versus 2.2% for the industry overall, described as the worst hedge fund losses since “liberation day.” Previously crowded bets against the dollar have been rapidly unwound.

Goldman Sachs

David Kostin maintains a 7,600 year-end target as his base case, with a moderate slowdown scenario at 6,300 and a severely adverse oil-driven shock at 5,400 — roughly 19% downside from current levels. Tony Pasquariello: “I worry the stock market is underestimating the potential downside tails. The market is certainly smarter than I am, but I’m surprised that market participants aren’t more concerned.” Jan Hatzius raised recession risk to 30% from 25% on rising oil and its global transmission. Oil desk: raised Brent targets to $110/bbl for March-April, estimating a $14–$18/bbl war premium currently embedded in Brent. First rate-cut call pushed from June to September 2026.

Morgan Stanley

Mike Wilson warned the S&P 500 could fall to 6,300 by April amid what he called a perfect storm of geopolitical tension and macro uncertainty. His recession risk qualifier — “assuming oil does not stay above $100/bbl” — has now been definitively breached. The institutional desk is increasing exposure calls to defense, security, aerospace, and industrial resilience, where government spending drives multiyear demand. First Fed cut delayed to September. Morgan Stanley’s published seven-risk framework for the Iran conflict covers: oil supply duration, inflation persistence, Fed policy paralysis, rising defense deficits pushing 10-year yields, consumer affordability before the November 2026 midterms, AI capex disruption from higher rates, and private credit fragility.

Bank of America

Michael Hartnett believes markets are approaching a “buyable washout” but wants stronger signs of capitulation, suggesting levels below 6,600 as more attractive entry. The BofA Bull & Bear Indicator has dropped from 8.4 to 7.4, breaching four policy panic triggers with no full capitulation yet. Savita Subramanian is calling for sector rotation toward HALO stocks — Hard Assets, Low Obsolescence. She flags a K-shaped impact: gasoline and natural gas price spikes hit lower-income consumers disproportionately. BofA’s 7,100 year-end target is now the lowest on the street.

Wells Fargo & Additional Desks

Christopher Harvey at Wells Fargo foresees a limited but intense war with oil price surge expected to eventually reverse on excess global supply once Hormuz reopens. He favors Utilities, Industrials, and Financials, and prefers US Large/Mid-Cap over Small-Cap and international. Wells Fargo Investment Institute is the most constructive institutional voice on the street, maintaining a 7,400–7,600 S&P range while acknowledging the near-term oil shock as a “temporary bulge.” Doug Beath: the week was characterized by “diplomatic dissonance between the US and Iran.” BNP Paribas raised its Q4 2026 headline and core CPI forecasts to 3.3% and 3.2% respectively: the threshold has been crossed for the energy shock to spread to retail prices.

Independent & Macro Strategists

The Strategist Divide: 1,700 S&P Points Between Bull and Bear

Ed Yardeni — Yardeni Research

Yardeni raised the probability of a market meltdown to 35% for the rest of the year, up from 20%, while simultaneously slashing meltup odds to just 5% from 20% as oil surged above $100. His Roaring 2020s base case still carries 60% probability through year-end. He warned: “The US economy and stock market are stuck between Iran and a hard place currently. So is the Fed. If the oil shock persists, the Fed’s dual mandate would be stuck between the increasing risk of higher inflation and rising unemployment.” He now assigns a 15% chance to a stagflationary 1970s scenario and recommended going underweight the Magnificent Seven, a call that has proven prescient.

Tom Lee — Fundstrat Global Advisors

Tom Lee is maintaining his 7,700 year-end target — the most bullish on the street. His framework: in the past eight major wars, the stock market bottomed early in the conflict. He recommends buying the Magnificent Seven, arguing that the entire premium these tech stocks built has been erased and that doesn’t make sense. He suggests a near-term S&P bounce toward 7,300 before a potential 20% bear market in the back half. The tension in his thesis: he notes a 20% bear market risk himself — making this a tactical not structural bull call.

Ray Dalio — Bridgewater

Dalio’s debt death spiral warning has found direct validation in the Iran war context. The mechanism: the Pentagon has asked the White House for a $200 billion war emergency supplemental, adding to a $38.86 trillion national debt and a projected $1.9 trillion deficit in FY2026. Dalio has flagged that Gulf sovereign wealth funds may be reconsidering their US Treasury holdings — Saudi Arabia reduced its Treasury holdings by approximately $14.7 billion in January alone. He advises holding 10–15% in gold as portfolio protection and continues to frame the real threat as dollar depreciation, not outright default: the central bank will print, but purchasing power will erode.

Mohamed El-Erian — Allianz / Wharton

El-Erian’s most critical and underappreciated insight this cycle: Gulf Cooperation Council countries are facing unanticipated near-term revenue pressures from their own energy sectors being disrupted. They expected high oil prices with an open Strait; instead they have high oil prices with a closed Strait and no ability to export. Gulf SWFs hold roughly $2 trillion in US stocks, bonds, hedge funds, and real estate — and the risk that they reduce US Treasury buying at the same time the US is issuing $200 billion in war bonds is a genuine tail risk for the long end of the curve. He flagged bond yields rising during geopolitical conflict — the opposite of the historical haven pattern — as inflation-driven rather than geopolitics-driven.

Jeff Gundlach — DoubleLine

Gundlach described markets as stuck in a holding pattern: “Kind of a going nowhere market right now, sort of trendless.” DoubleLine’s positioning has been defensive — holding cash and anticipating a prolonged period of elevated rates given the stagflationary oil shock. His March 23 CNBC appearance provided no new strategic levels but reinforced the cautious framework.

Helima Croft — RBC Capital Markets

Croft has been the single most consistent energy commodity voice this cycle. Her key call: “We have to brace for a potentially extended military operation.” On what needs to happen to end the crisis: “The only way this crisis abates is if there is some way that we can reopen the Strait of Hormuz and give confidence to shipping companies that their tankers will not be attacked.” She flagged that the OPEC production boost question is entirely moot because the lion’s share of OPEC barrels in the region could become stranded assets in an extended war scenario. Iraq might have to shut in production entirely if it cannot export through Hormuz.

Jeff Currie — Carlyle Group

Currie describes the current energy upheaval as the mirror image of Covid: the paper markets have entirely disconnected from the physical markets. The US will be the last to feel energy disruptions, as it is insulated as a net oil exporter; the impact hits Asian and European importers first. His structural framework: the “dollar recirculator” is breaking down. When Western countries froze Russian reserves, they signaled that foreign dollar holders could be used as geopolitical leverage. Gulf states are now questioning their US Treasury appetite — a long-cycle, structurally bearish view for the dollar and bullish for commodities.

Ian Bremmer — Eurasia Group

While Trump may find it relatively easy to start a war, ending one is far more complicated, and neither side is clearly winning. Russia benefits from higher energy revenues and US military attention diverted from Ukraine. China faces short-term harm as a heavy Hormuz oil dependent but long-term strategic benefit as US reliability as a global partner is undermined. Iran’s enriched uranium stockpile remains intact, and the conflict increases the likelihood that Iran will accelerate efforts to develop nuclear weapons. American munitions stockpiles for sustained strikes are limited. On this weekend’s Pakistan talks: Bremmer has consistently flagged Pakistan as a key intermediary, and the Islamabad summit aligns with his earlier framing.

Technical Analysis

The Technical Picture — Deteriorating Backdrop, No Capitulation Signal Yet

Mark Newton, CMT — Fundstrat Head of Technical Strategy

Newton’s latest technical assessment: near-term SPX trends remain bearish, and trends and momentum remain negatively sloped while market breadth is in dire need of immediate recovery. Equal-weighted SPX broke down two weeks ago as market breadth and momentum nose-dived. Sectors like Discretionary, Industrials, and Healthcare have pulled back to join the weakness previously seen only in Tech and Financials. The key observation: while many stand ready to buy the dip, trends require some meaningful recovery following the recent deterioration, and that likely cannot happen as WTI pushes back up toward $115 and bond yields break out across the globe. There has not been capitulation. Semis and Memory stocks are the next potential leg down to watch.

Sentiment & Positioning

Fear Readings at Extremes — But No Capitulation Signal Yet

Options Market & Dealer Positioning — Critical Post-OPEX Context

March OPEX was one of the largest on record, with roughly $1.3 trillion delta notional rolling off. The JPM Collar (35,000 contracts on an SPX 5,470/6,475 put spread with a short call at 7,155) has now rolled off, removing the market’s key structural shock absorber. The result: the market is now operating in negative gamma territory, meaning dealer hedging will amplify directional moves in both directions. With VIX near 30 and SPX 1-month realized volatility at approximately 13%, the options market is pricing in a massive volatility premium — the widest gap between implied and realized vol in years. Either realized vol must catch up via further selloff, or implied vol must compress via resolution rally. SPX put skew has steepened again over the past week — large traders are reloading puts rather than rotating to calls despite the 7%+ selloff from January highs. Technical support is not evident until the 6,200 level, confirmed independently by multiple technical and quantitative desks. 70,000 April 40 VIX calls traded in a single session last week — one large participant betting on a sharp volatility increase.

Hedge Fund Performance & Positioning

Long/short equity funds are down approximately 3.4% in March versus 2.2% for the industry overall. Global macro funds are down approximately 3%; the CTA index is also negative. Previously crowded dollar short bets have been rapidly unwound. Record short positions on US stocks reflect what one flow analyst described as conditions for a rally being very high if geopolitical tensions ease — the corollary being that any ceasefire headline or genuine peace signal could trigger violent short covering.

Recession Landscape & Macro Research

Recession Probability Dashboard — Consensus Is Converging

Key Macro Data Points

US gas prices have risen 35% in a single month — the biggest one-month spike in 30 years and the highest levels since August 2022. The 12-month US inflation expectation has surged to 5.2%, the highest since March 2023, before the war has even fully appeared in the data. Credit card balances 90+ days delinquent sit at 12.7% — the highest since 2011. Auto loan delinquencies at 5.2% — the highest since 2010. 30-year mortgage rates recently touched 6.5%, up from 6% at war start, with weekly mortgage applications falling 10%.

The OECD projected US inflation could hit 4.2% this year, up from 2.6% in 2025 — which would make America the highest-inflation G7 nation. This is the first public forecast to frame it that way. Oxford Economics holds that a global recession requires oil above $140 sustained for two months — we are not yet there. Neuberger Berman estimates the oil threshold for meaningful demand destruction is $150 sustained for six to twelve months, with a current forward curve (WTI $76, Brent $82 by December 2026) well below that level. The IEA’s coordinated 400-million-barrel emergency reserve release is described as a stop-gap measure providing only a temporary bridge.

The Moody’s 2026 Six-Risk Convergence

Moody’s published its “Six Credit Risks 2026” executive summary within the past 72 hours. Of the six scenarios — geopolitical fractures, inflation expectations de-anchoring, AI equity correction, AI job displacement, private credit contagion, and general default risk rising — scenarios 1, 2, and 5 are all currently active simultaneously. Moody’s notes this is an extraordinarily rare convergence. The private credit scenario explicitly flags leadership transition at the US Federal Reserve as an additional destabilizer for yield volatility and credit pricing.

The “April Supply Cliff” Warning

The single most important new structural energy intelligence of the week: through approximately April 19, the world has lost 4.5–5 million barrels per day of oil from the war, amounting to roughly 5% of global supply. That number is set to double by mid-April as SPR releases and small Iranian and Russian oil exemptions expire. This is the “oil cliff” framing: Middle East producers are shutting in wells because they have no storage, and reversing shut-ins can take three to four months according to Kuwait’s petroleum CEO. This means the current $95–$107 Brent range may be before the worst physical supply crunch, not after it. Goldman’s three oil scenarios: Brent averages $71/bbl in Q4 in the most optimistic case (flows restored within one month); $93/bbl in the adverse case (60-day disruption); and $110/bbl through Q4 2027 in the severely adverse case, potentially approaching the 2008 all-time high of $147.

Morning Intelligence

Newsletter Sweep — The Week’s Freshest Framing

Reuters Morning Bid — “Crude Escalation”

Mike Dolan’s Monday morning edition frames the session as follows: markets remain unconvinced that a hasty end to the Middle East war is imminent, with oil prices surging again and global stocks getting off to a rocky start. Any hopes of near-term de-escalation were wiped away as Houthi forces joined the conflict and Trump suggested US troops could take Kharg Island, Iran’s main oil export hub. The signals out of Washington remain mixed, however, with Trump continuing to talk up prospects for a peace deal. Dolan’s thematic column of the week: how Gulf states’ shaken faith in US military protection could ripple through the petrodollar system — and what a world of “petroyuan” in place of petrodollars would look like structurally. This is the most important structural geopolitical-finance article of the week.

Wall Street Brunch — Key New Intelligence

NFP consensus for Friday’s release into closed markets: economists expect 56,000 jobs and unemployment to hold at 4.4%. Russia plans to ban gasoline exports from April 1 through July 31 to prioritize domestic supply amid global energy market volatility — removing approximately 120,000–170,000 barrels per day from global gasoline supply. Primary buyers affected: China, Turkey, Brazil, Africa, and Singapore. Ukraine’s drone strikes have separately halted approximately 40% of Russia’s oil export capacity, compounding the supply disruption. The Pentagon is developing plans for weeks of ground operations including Special Operations raids and missions under consideration include possible seizure of Kharg Island and strikes on coastal weapons systems near the Strait of Hormuz. Officials estimate such objectives could take weeks, not months. WTI bullish technical targets as high as $124 if current momentum persists. The S&P 500 death cross has been flagged as a meaningful technical deterioration signal.

Bloomberg Markets Wrap — Monday 6 AM UTC

Stocks extended a selloff and oil rose as Houthi forces entered the Middle East conflict and an expanded US military presence raised concerns about a prolonged confrontation. Government bonds advanced. Asian shares fell 2.1% on concern that higher crude oil prices will weigh on economic growth. European equity-index futures traded 0.7% lower. S&P 500 contracts erased earlier losses and edged up 0.1%, indicating some selling pressure may be easing. Brent crude is on track for a record monthly increase.

Australian Market Framing — Global Read-Through

ASX200 finished last week at 8,516, snapping a three-week losing streak but still down 7.42% for March and 2.27% for Q1. Best performing sector: Materials +4.57%. Worst: IT -4.77%. Saudi Arabia has managed to partially circumvent the Hormuz closure by utilizing its east-west pipeline to get up to 6 million barrels per day to international markets via the Red Sea — but that pipeline may now become a Houthi target, as the Houthis throttled Red Sea traffic for two years starting in 2023. Australian RBA rate hike expectations: OIS curve pricing cumulative 72 basis points of tightening by year-end, matching the global hawkish pivot narrative.

Capital Markets & Structural Risks

The Second Story: Private Credit Cascade & Treasury Market Stress

Private Credit Contagion — Full Cascade

The $1.8 trillion private credit market is experiencing its most significant crisis since the asset class emerged. The chain of events: Blue Owl Capital Corp II ended regular quarterly liquidity payments on its $1.6 billion fund when redemption requests exceeded the 5% quarterly cap, with its stock now down approximately 60% from a year ago. Blackstone’s BCRED saw investors seek to pull a record 7.9% of assets ($3.8 billion), with Blackstone raising $400 million from its own capital and senior executives to satisfy 100% of requests. BlackRock HPS Lending Fund ($26 billion) restricted withdrawals in early March. Morgan Stanley North Haven Private Income received repurchase requests for 10.9% of shares. Cliffwater’s $33 billion flagship fund has shareholders seeking to withdraw 7%. Ares Capital has halted redemptions after a wave of investors sought to exit. Apollo’s $25 billion private credit fund returned only approximately 45 cents on the dollar to redeeming investors. From April 2024 to January 2025, PE stocks staged extraordinary gains (Blackstone +58%, Ares +68%, Apollo +78%, Blue Owl +81%, KKR +103%). Since peak, the selloff has erased approximately $265 billion in market cap.

$10 Trillion Treasury Rollover Risk

US debt suddenly faces weakening demand as $10 trillion must be rolled over this year amid the Iran war. Combined with the $200 billion Pentagon war supplemental request, the fiscal pressure on the Treasury market has rarely been greater. The 30-year yield briefly touching 5.00% is not just a number — it is the psychological threshold where institutional buyers historically reassess duration risk. Multiple strategists have identified the 4.50%–4.70% range on the 10-year as the intervention zone that determines whether Trump escalates or extends his Iran deadline. The mechanism: the 10-year hitting 4.45% on March 23 likely triggered the same calculation that led Trump to pause tariffs when the 10-year hit 4.50–4.60% in April 2025.

Prediction Markets — Ceasefire Odds

The ceasefire prediction market has generated $62.4 million in total trading volume since February 28. Current state: approximately 30% odds on Strait of Hormuz traffic normalizing by April 1 (tomorrow); 39% by end of April; 67% by June 1; 76% by July 1. Trump’s Sunday statement that negotiations are progressing has nudged odds higher. A separate investigation by multiple outlets found suspicious oil futures activity in the minutes before Trump’s March 23 Truth Social post: approximately 6,200 Brent and WTI futures contracts ($580 million notional) traded in a single minute, 15 minutes before the post. Eight newly created accounts on prediction markets bet $70,000 on a ceasefire by March 31, positioned to collect $820,000. The CFTC is undergoing what one former official called a sea-change, reassessing everything about prediction market regulation.

Notable M&A & Market Events

Olaplex surged approximately 49% premarket after Henkel AG agreed to acquire the company in an all-cash deal valued at $1.4 billion ($2.06/share, a 55% premium). Brown-Forman moved +14% on reports that Pernod Ricard is considering a bid. Meta Platforms faces significant stock pressure after two major court losses on child safety in a single week, with broader implications for Big Tech platform liability. Sony raised PlayStation prices another $100 — the second hike in under a year, representing embedded consumer electronics inflation being passed through in real time. GameStop CEO Ryan Cohen has signaled acquisition interest, with one analyst firm noting the company may have built exposure to a target via swaps and speculating about a possible Best Buy interest. SpaceX may file for an IPO as soon as this week or next — which would be the largest IPO in US history at current private valuations of approximately $350 billion plus. In a VIX 31+ environment, a SpaceX IPO filing would be a significant contrarian confidence signal from private markets.

Real-Time Market Intelligence

Fast Money & Flow Intelligence — What the Active Community Is Watching

Active market participants are converging on several high-conviction themes this morning that have not yet appeared in institutional research:

Premarket Movers

Notable Individual Names — Monday Open

Federal Reserve & Monetary Policy

A Fed Trapped Between Oil Inflation and Recession Risk

Current rate: 3.50%–3.75%, held at the March 18 meeting (second consecutive hold). Powell’s March 18 key quote: “The forecast is that we will be making progress on inflation, not as much as we had hoped. Near-term measures of inflation expectations have risen in recent weeks, likely reflecting the substantial rise in oil prices.” He added that the conventional view of seeing through an energy price spike as a one-time increase is the historical framework, but acknowledged the Fed is in a difficult spot simultaneously facing rising inflation and weakening growth.

CME FedWatch: probability of a rate increase by year-end crossed 52% on Friday — the first time above 50%. Rate cut probability: 8%. Goldman and Morgan Stanley each pushed their first cut calls to September 2026. The Fed’s own yield curve indicators are showing a “bull steepener” pattern — historically, the curve uninverts because recession has already begun, not in anticipation of one. Schwab’s chief investment strategist described the Fed as “pickled” with its dual mandate in conflict. The most telling structural data point: at year-start, markets priced two rate cuts for 2026. Now markets price a higher probability of a hike than a cut.

Powell’s term ends May 15, 2026. Kevin Warsh is the expected successor. The WSJ has flagged uncertainty around Warsh: Wall Street is unsure whether he will preserve Fed independence or deliver the easy-money posture Trump has demanded, noting his enthusiasm for reducing the central bank’s bond holdings. Senator Tillis is blocking the Senate confirmation vote until a DOJ probe into Fed headquarters remodeling is resolved. Nick Timiraos has flagged this FOMC moment as “a potential dress rehearsal for an uncomfortable 2026 — multiple dissents, a deeply divided committee, maybe even the end of 30 years of consensus-driven Fed policy.”

Wildcards & Additional Intelligence

Items That Could Change the Briefing’s Framing