Global debt just crossed $111 trillion. Up from ~$20 trillion in 2000.
The U.S. (~$38T) and China (~$19T) now account for over half of it. For a decade, zero rates allowed this to build without pressure. That’s changed. New issuance now comes with a real cost. Interest expense is rising quickly, especially in the U.S. Source: Michael Chu, CFA, CFP Visual Capitalist
Oil product exports from the Middle East dropped 65% in March compared to February.
However, they may increase going forward. Why? Iran has recently categorized countries as: 1. Friendly; 2. Neutral; and 3. Non-friendly. Friendly countries will have free passage through the Strait of Hormuz, while neutral countries will be allowed to pass with a fee. This should enable higher levels of oil and other exports from the Middle East, but possibly still less than in February. Source: BraVoCycles Newsletter
The military budget Trump proposed today is $1.5 trillion.
Adjusted for inflation, that's $260 billion higher than the largest military budget on record. Source: Stephen Semler
SPX is pushing slightly above the downtrend, testing the 21-day MA.
A close above could turn this into a squeeze setup, but 6700 (futures) remains the key resistance to watch. More here. Source: TME
Markets have historically tended to bottom well ahead of broader spillover effects.
As Andreas Steno Larsen notes, “markets typically bottom when the rate of change improves.” Source: TME
SPX has tracked oil almost tick-for-tick since the Iran war began. Now it’s starting to decouple.
Do you trust forward-looking equities, or oil stuck at extremes? Source: TME
Is this a warning sign of a private credit crisis, or just market panic?
Blue Owl Capital, often considered a poster child for the private credit boom, closed at a record low as worries grow about the health of the $1.8tn market. The stock fell 1.4% to $8.45, slipping below its previous low from late 2022. It is now down 68% from its all-time high. Source: HolgerZ, Bloomberg
The Strait of Hormuz is the lifeline of the global economy: Saudi Arabia is the largest source of crude oil transiting the Strait at 38%, followed by Iraq at 22% and the UAE at 14%.
Iran, Kuwait, and Qatar follow at 11%, 10%, and 5%, respectively. On the destination side, China receives the largest portion at 37%, followed by India at 14%, Other Asia and Oceania at 16%, South Korea at 12%, and Japan at 12%. This means ~75% of all crude oil passing through the Strait flows to Asia, making the region overwhelmingly the most exposed to the current disruption. Saudi Arabia and Iraq alone represent 60% of all crude transiting the chokepoint, meaning any prolonged closure disproportionately impacts their export revenues and Asian buyers simultaneously. The Strait of Hormuz is the most critical chokepoint in global energy flows. Source: Global Markets Investor
