Wealthion Macro Bites 3-13

Reuters reports an escalating White House tug-of-war between Trump advisors concerned surging gasoline prices will extract a political cost and hawks pressing the President to maintain a hardline offensive against Iran. Axios reports President Trump is committed to continuing Iranian military operations for at least three to four additional weeks before considering any end to the conflict.

The Trump administration is preparing a 30-day exemption to the (1920) Jones Act requiring American ships to be used to transport goods between U.S. ports. The exemption would allow foreign tankers to transport oil, gasoline, diesel LNG and fertilizer among U.S. ports, especially Gulf Coast oil to East Coast refineries and fuel from the region to more populous areas.

The U.S. Department of Energy announced it will invest $1.9B to accelerate upgrades of U.S, power grids. Selected projects ⁠will need to demonstrate how reconductoring or replacing existing power lines with higher-capacity conductors (combined with transmission technologies) can bolster the U.S. electric grid.

Honda has joined the list of global carmakers taking massive write-downs as they scale back electric vehicle ambitions. Honda announced plans for $15.7B in write-downs adding to the $70B industry total (including Stellantis, Ford, General Motors and Volkswagen).

The fading status of 60/40-type portfolio models is taking another hit from stagflation concerns linked to the Iranian conflict. Unprecedented oil market turmoil is causing government bonds to decline along with stocks. On Thursday, the S&P 500 fell 1.52% while 2-year Treasury yield surged 9bps (to 3.744%).

Friday Data Deluge: Jan. PCE Price Index (est. +0.3% m/m & +2.9% y/y) and Q4 GDP (2^nd est. +1.4%) @ 8:30 am; Mar. U. of Mich. Sentiment (est. 54.8) 1-yr infl. exp. (est. +3.7%) and 5-10-yr. infl. exp. (est. 3.4% @ 10 am.

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