Trading Day: This ain’t over

ORLANDO, Florida, March 24 (Reuters) - Wall Street brought an otherwise positive day for global stocks to a downbeat end on Tuesday, as rebounding oil prices, spiking bond yields and soft business activity data compounded concerns that the war in the Middle East is far from over.

In my column today I look at how the war, energy crisis, and market turmoil have sent investors scurrying for safe havens. The only trouble is, the one-size-fits-all safe haven asset no longer exists.

If you have more time to read, here are a few articles I recommend to help you make sense of what happened in markets today. 1. Iran war starts to hit global economy, business surveysshow 2. War-torn bonds may need recession to bounce back: MikeDolan 3. Japan’s core inflation slows below BOJ target,complicates rate communication 4. Ares caps withdrawals at private credit fund afterredemption requests surge 5. Traders bet $500 million on oil price just beforeTrump’s post on delay to Iran attack

Today’s Key Market Moves * STOCKS: Solid gains in Asia, major index gains nudge 3%;Europe +0.5%, UK +0.7%; the big three U.S. indices fall, Mexico+2.2% * SECTORS/SHARES: Seven S&P 500 sectors rise, energy +2%,materials +1.7%; four fall, communications services -2.5%, tech-0.7%. Estee Lauder -10%, Salesforce -6%, IBM -3% * FX: Dollar +0.5%. Aussie, kiwi are biggest G10decliners. In emerging FX ZAR, HUF, THB, INR all fall 1% ormore. * BONDS: Treasury yields rise 10 bps at short end, bearflattening the curve, after extremely weak 2-year auction. * COMMODITIES/METALS: Oil +4.5%, gold -1%.

Today’s Talking Points

* PMI pointers

Closely watched purchasing managers index data for March released on Tuesday show that U.S. private sector output fell to its lowest in 11 months, overall activity in the euro zone fell to a 10-month low, and activity in Britain expanded at its slowest pace in six months.

Unsurprisingly, war in the Middle East, a global energy shock, and soaring oil and gas prices are putting global growth under strain. The longer this goes on, the more activity is squeezed, which could widen labor market cracks and spook policymakers. Maybe rate hike pricing has swung too far?

* Private chancer

Another wave of worry about the health of private credit markets is cresting. In the last 24 hours, Apollo’s $25 billion private credit fund Apollo Debt Solutions and Ares Management’s $22.7 billion Ares Strategic Income Fund have said they are capping redemptions at 5%.

Shares in both firms underperformed on Tuesday. Shares in these and other big names in the sector are down 25-35% this year, as concern over asset value deepens. Do cracks in private credit pose structural risks to markets more broadly? The more firms stop investors from accessing their money, the more that debate will rage.

* A U.S. equity ... upgrade?

Barclays equity strategists put out an interesting note on Tuesday. Despite the war, energy shock, AI disruption, and private credit risks, they are raising their S&P 500 forecast for this year: EPS to $321 from $305, and price target to 7650 from 7400. That implies ~15% upside from today’s close.

They admit the risks skew toward more bear downside than bull upside, but insist the U.S. offers stronger nominal growth than other economies, led by a tech juggernaut that shows few signs of stopping. "We are incrementally bullish on US equities, though the road likely stays bumpy until we turn a corner."

What could move markets tomorrow? * Developments in the Middle East * Energy market moves * Australia inflation (February) * Germany Ifo business sentiment index (March) * European Central Bank President Christine Lagarde speaksat "ECB and its Watchers" conference, with fellow policymakersOlli Rehn, Philip Lane and Martin Kocher * UK PPI and CPI inflation (February) * U.S. import prices (February) * U.S. EIA weekly crude oil stocks * U.S. Treasury sells $70 billion of 5-year notes and $28billion of 2-year floating rate notes at auction * U.S. Federal Reserve Governor Stephen Miran speaks

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