In this week’s episode of 7 Market Movers, Doug Huber covers:

• How the Iranian conflict is impacting the markets
• The latest updates on crude oil prices
• What’s going on with redemptions in private credit markets 

Watch the full episode below for these updates, the latest jobless claims report, and more:

TRANSCRIPT:

Hello everyone. My name is Doug Huber and I'm the Deputy Chief Investment Officer here at Wealth Enhancement. Let's get into what drove markets this the week of March 9th, 2026. We did get an economic data released this week with jobless claims being released for the first time since the start of the Iranian conflict.

The good news was they did tick down to 213,000, so remaining low and showing no signs of layoffs we might expect during the early days of a hypothetical recession. That said, the market is essentially shaking off data releases and instead keeping most of its focus on the geopolitical situation at hand. While there's always many tensions pushing and pulling markets, this week we're gonna focus on two primary themes driving the news flow. First, and the biggest one is the escalating headlines surrounding the Iranian conflict and what that could mean for energy markets and future inflation expectations.

And second, there's been a lot of renewed scrutiny around certain areas of the private credit market. With dramatic headlines always come dramatic market reactions. However, point to point this week, the market's been relatively measured. So let's walk through what actually moved.

On the equities markets, we'll start with the US side of things. So large cap stocks, if you think the S&P 500, they've been quite volatile on a day to day basis, but generally held up really well for the week. So they're only down roughly 1% through the close on Thursday. Larger companies tend to have stronger balance sheets and more global revenue streams, which can help cushion those short term geopolitical shocks.

On the sector side, as you'd expect defensive names and energy names certainly have outperformed for the week. Small caps on the other hand tend to be more volatile and that's what we did see this week, but they were still down modestly through the close on Thursday, I think only losing roughly 1.4%. They're typically more sensitive to the domestic economic conditions and tighter financial conditions. And so if you have expectation for rising rates and then higher uncertainty, they're gonna tend to impact smaller companies more directly.

If we look internationally, developed markets saw some pressure, particularly in regions more exposed to energy supply routes, but currency movements helped offset some of that weakness with indices only down roughly 0.5% on the week. Emerging markets were a little bit more mixed. If you were an energy exporting country, they benefited from the higher oil prices while energy importers faced a little bit more pressure. Also, stronger US dollar, we've seen the US dollar kind of buoyed right now.

That stronger US dollar was definitely an additional headwind for some of those emerging economies. The key takeaway here, markets priced modestly for uncertainty, but this was not a disorderly sell off. So that's a positive. On the rate side, we always think of the US ten year as kind of the benchmark rate.

And this week, the 10-year continued to move higher, going from 4.1% up to 4.26% through Thursday. And so that's kind of interesting because we did not see that traditional flight to safety move in bonds. Instead, these rising oil prices are really driving up increased in, excuse me, increased inflation expectations. And that's gonna continue to push up on yields, especially because today, if you look, it's actually interesting.

The market is now pricing in less than one rate cut for the year from Federal Reserve. So there is an expectation that we could see inflation higher for longer, especially driven on the commodity side. With that, let's take a look at that. I mean, commodities are typically the cleanest or clearest transmission channel for geopolitical risk.

And so oil is the big one, the Strait of Hormuz continues to be closed, Iranian missiles are hitting ships in the region and so oil is very sensitive to that and it's moved higher this week from $93 to $101 and kind of bounced around everywhere in between depending on the day.

That being said, the International Energy Agency has said it plans to release up to 400 million barrels from their strategic oil reserves. And so hopefully that'll help alleviate some of the pressure on oil prices.

Natural gas was a little bit more muted. It's actually up 1.9% through the week, but nowhere near as much as oil was. And frankly, that's because its pricing dynamics tend to be more regional and they're less directly tied to the Middle East supply routes.

Gold was an interesting one because I think we all think of that as a traditional hedge during periods of geopolitical uncertainty and it certainly had a great run. Although interestingly, this week it kind of bounced around losing just a little bit of money for the week. And so I think this is fairly typical behavior. Geopolitical tensions rise, you tend to see energy and goal kind of follow suit. The bigger one we're seeing a lot of and this is separate from geopolitics, is the topic of private credit, right? You might be hearing about redemption limits at certain non traded BDCs or business development corporations.

A lot of framing it as concerns around a potential bubble and even going so far as to make comparisons to 2008. I think it's important to think about this because, you know, the headlines are shocking, but let's get into it a little bit. And what does it mean if you do hold private credit? What does it mean if you don't hold private credit? And so it's important to separate these liquidity headlines from fundamental credit deterioration. What we're seeing is primarily is stress concentrated in loans originated in 2021 and lower, excuse me, and earlier.

And so this was a period when leverage was higher, borrowing costs were lower, but those loans are now facing more pressure in this higher rate environment as they have to go out and refinance. And some of these industries that there remains, specifically software, is facing a lot of headwinds from the AI movement. And so I think the market is out there with these headlines. There's been a lot of stress in the liquidity side of things, but what does that really mean? I think if you look through the majority of the portfolios out there, most of the loans in there were originated in 2023 and later. And that's important because not only were they underwritten more conservatively because they were already in a higher interest rate environment, but they were also underwritten at a period where AI was front and center, right? That is part of the underwriting process to understand how that was gonna impact business models.

The more immediate issue today is elevated redemption requests in certain number of these BDCs and funds. And it's important to look at this because those redemption gates are functioning as designed. They're there specifically to prevent for selling of assets and protect those clients who are gonna take that longer term investment view and choose to remain invested. And so that's actually helping those that are kind of understanding the situation and not just running for the door because they're scared from a headline.

And so really this is primarily a liquidity management story and not a systemic credit collapse. Let's talk about why this isn't 2008 because that was a terrible time or anybody who had to live through it, especially on the economic side of things, what it did to asset values. And so there's a lot of headlines that are drawing that comparison to the global financial crisis, but structurally today looks very different than that. First and foremost, banks are far better collateralized than they were in 2008.

There's a lot of regulation on those banks. Their balance sheets are much sharper and frankly, most of these loans are made away from the banks. These private credit loans are generally senior secured, which essentially means they are the first in line to get cash flows in the event of default or an impairment to the business. But more importantly, they're not layered into all these complex securitizations that have been embedded throughout the financial system.

If you think back to 2008, the big problem was kind of all held these subprime mortgage backed securities. They were in our money market funds. They were in our investment portfolios. They were everywhere, right? And that's not what it's like today.

On the vehicle side, most of the vehicles that hold these private credit loans use very little structural leverage. So there's not that levered system like the banking was back in 2008. And if you stress test, it really shows that we would need default rates exceeding the levels we saw in the great financial crisis for sustained multi year negative returns across these diversified private credit portfolios. And so the system today is a far stronger shock absorber than it did in 2008. But you might say, Doug, well, if I don't hold private credit, so what does all this hubaballoo have to do with me and is there some contagion risk to other parts of the economy? And so, I think first and foremost, it's important to understand there's no direct exposure to any of these gated funds.

The function of the public equity and fixed income markets is remaining quite orderly, even despite the volatility that's occurring because of the geopolitical situations going on in the Middle East. We're seeing no freeze in short term funding markets or breaking of the buck of money markets. And so the really this stress appears to be concentrated within specific vehicles and specific vintages. You're seeing some pressure on publicly traded asset managers that might invest in the space. But outside of that, there's nothing indicative of a broad corporate credit collapse. So at the end of the day for diversified investors, the market performance is gonna continue to be driven primarily by earnings growth, inflation trends and the overall economic conditions, not by private BDC redemption mechanics. And so to put it all together, geopolitical tensions pushed energy prices higher, think we've all seen that, and they're certainly causing elevated volatility.

Tenure, the yields here in the US are rising, especially on the back of elevated inflation expectations. The private credit stress appears concentrated and liquidity driven, not systemic, And markets are repricing risk, they're not unraveling. And so while volatility may persist, the current data is not suggesting that we have this broad financial instability at this stage. As always remain focused on diversification, proper liquidity alignment, and avoiding emotional reactions to these short term headlines. We thank you all for listening. We're excited to be back with you next week where I'm sure we'll have more updates as we continue to see what goes on in the Middle East and as we see new economic releases. So thank you again.

This information is not intended as a recommendation. The opinions are subject to change at any time and no forecasts can be guaranteed. Investment decisions should always be made based on an investor's specific circumstances. Investing involves risk, including possible loss of principal. 

There is no guarantee that asset allocation or diversification will enhance overall returns, outperform a non-diversified portfolio, nor ensure a profit or protect against a loss.

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