Notes from the Last Bull Standing
Okay. Deep breath.
The Strait of Hormuz is functionally closed. Brent crude touched $113 intraday on Friday before "jawboning" from the White House walked it back to $110. The Dubai physical price — the one that actually moves oil in Asia, not the paper contract traders obsess over — is at $126, up 76% since February 27th. Seventy-six percent. In less than a month. The last time physical crude moved like that in a compressed window, we were in the middle of an actual land war in the Gulf.
Oh wait.
The VIX closed above 30 for the first time since March 9th. Michigan consumer sentiment printed 53.3 — not the preliminary, the final, which somehow came in worse than the already-bad flash reading. One-year inflation expectations hit 3.8%, the highest since this war started. The futures market now assigns a 52% probability that the Fed's next move is a hike. Not a cut. A hike.
And the S&P 500 is 7% below its all-time high.
Seven percent.
I keep turning that number over in my head like a coin I can't identify. Seven percent. We have a war shutting down a waterway that carries 20% of global oil supply. We have a consumer sentiment index at levels associated with recessions. We have Italian 10-year BTPs repricing 78 basis points at auction in a single week — 78 basis points, the sharpest move since the 2022 energy crisis, and that crisis nearly broke the eurozone. We have five consecutive losing weeks for U.S. equities, a streak not matched since 2022. We have nearly $8 trillion parked in money market funds because institutional capital has quietly decided that cash is a position.
And the index — the one CNBC cuts to every forty-five minutes, the one 401(k)s are benchmarked against, the one retail America treats as a proxy for national wellbeing — is down seven percent from its peak.
BlackRock came right out and said it this week: risk assets don't reflect the macro damage that energy pricing implies. That sentence, from one of the largest asset managers on earth, should have moved something. Instead it sits there, politely ignored, like a fire alarm in a building where everyone assumes the fire is in someone else's floor.
The optimists have a theory. They always do.
The theory is that Trump's rhetoric is "working" — that presidential jawboning is suppressing paper crude prices even as physical markets seize up, and that a deal, a ceasefire, some diplomatic off-ramp will materialize before mid-April, when the strategic reserve releases and temporary sanctions waivers run out of road. The White House has extended its pause on attacking Iranian energy facilities to April 6th. Oil executives and analysts are apparently telling anyone who will listen that the Strait needs to be open by mid-April or the supply disruption becomes structurally embedded, not temporary. S&P Global, in its base case, assumes disruptions last only a few weeks and has Brent returning to $60 by year-end. Their adverse scenario — persistent disruption, $200 Brent in Q2 — they include almost apologetically, as if naming it might summon it.
The window is not wide. It is narrowing by the day.
What worries me isn't the war itself, or even the oil price. Wars end. Straits reopen. What worries me is the asset price that has already decided the war is transitory, the inflation is temporary, and the Fed will eventually pivot back to accommodation — all without any of those things being true yet. The equity market is pricing the resolution, not the disruption. It is running the optimistic scenario as its central case while the bond market, the VIX, the physical oil curve, and the University of Michigan's survey respondents are running something considerably darker.
One of these is wrong.
Bitcoin had a worse week than the S&P. Down past 25% year-to-date, with analysts eyeing $61,000 as the next level of capitulation. The crypto crowd spent two years telling anyone who'd listen that Bitcoin was digital gold — an uncorrelated store of value that would shine precisely when fiat systems buckled under geopolitical stress and inflationary pressure. We now have geopolitical stress. We now have inflationary pressure. Gold is up 2.6% on the week. Bitcoin is not.
The ECB, meanwhile, has opened a formal investigation into four altcoins under MiCA. Bureaucratic, procedural, overdue — and yet the timing has a certain poetry. The institutions are moving in as the speculators are moving out.
The quarter ends Tuesday. Everyone knows what window dressing looks like: a brief, perfunctory bid in megacap names to clean up the closing NAVs, followed by nothing. Don't mistake it for a trend.
The honest read on this market, as of Sunday evening, is that the equity complex is being held up by inertia, index mechanics, and a collective institutional reluctance to be the first large seller in a market where the exit is already narrow. The macro picture — oil shock, sentiment collapse, rate expectations flipping toward hikes, a Fed transition happening in real time — is not a 7%-correction macro picture. It's a 20%-to-30%-drawdown macro picture, priced in slowly, grudgingly, by a market that has been conditioned by fifteen years of central bank backstops to treat every selloff as a buying opportunity.
Maybe they're right. Maybe the Strait opens. Maybe Trump closes a deal before April 6th. Maybe Warsh threads the needle, oil falls back to $70, and the second half of 2026 looks like the consensus expected back in January.
Or maybe the fire is on this floor.
Watch the physical Dubai crude spread versus Brent. Watch whether the Italian BTP-Bund spread continues to widen. Watch what happens to S&P 500 earnings estimates if oil holds above $100 through April. The equity market's 7% correction is not a verdict. It's a hypothesis.
The bond market is forming a different one.
Published March 29, 2026