Daily Basis

March 13, 2026

Oil is back above $100, stocks are at their lowest point of the year, Goldman Sachs thinks there's a one-in-four chance we're heading into a recession, and a couple of the biggest names in asset management are quietly telling investors they can't have their money back right now. It has been, as they say, a week.

Oil at $100

There is a version of the oil market where $100 Brent crude is just a number. It's a round number, and markets love round numbers for the same reason humans do: they feel important even when they aren't. But $100 oil is not just a number this time, because the thing pushing it there is a shooting war between the United States and Iran, and shooting wars in the Middle East have a way of making oil prices stay high for longer than anyone's models predict.

President Trump has been fairly clear that he views Iran's nuclear program as a more pressing concern than the price of gasoline, which is a coherent policy position that also happens to be very expensive for everyone who drives a car or heats a home or buys things that were shipped on trucks. The market has noticed. Chevron is up 30% this year, which is the kind of return that makes you wonder whether your index fund should just be an oil fund. ConocoPhillips is having a similarly enjoyable 2026. If you are an energy company, business is good in the way that business tends to be good when the commodity you sell becomes scarce and the scarcity has no obvious end date.

The interesting thing about oil shocks is how they cascade. Oil goes up, so gasoline goes up, so shipping goes up, so the price of everything that gets shipped goes up, which is (checks notes) everything. The PCE inflation print came in at 3.1%, which is the kind of number that makes the Federal Reserve stare at the ceiling and think about all the rate cuts it was hoping to do this year. The Fed's entire 2025 narrative was about gently easing rates as inflation cooled. Oil at $100 is not cooling.

For the typical person with a 401(k) and a car payment, this is a straightforward squeeze. Your commute costs more, your groceries cost more, and the stock portion of your retirement account is not doing great either (more on that in a moment). The one silver lining, if you can call it that, is that high oil prices tend to be self-limiting: they slow down economic activity, which eventually reduces demand for oil, which brings prices back down. The problem is that "eventually" can mean six months or it can mean two years, and in the meantime you're still paying $4.50 a gallon.

The deeper concern is what this does to central bank policy globally. The European Central Bank was also planning to cut rates. The Bank of England was making similar noises. When oil spikes because of a geopolitical crisis, every central bank faces the same ugly question: do you keep rates high to fight inflation and risk choking off growth, or do you cut rates to support the economy and risk letting inflation run? There is no good answer, which is why central bankers look so tired lately.

Stocks Find a Floor (Below Them)

The S&P 500 hit a new 2026 low this week, which is an impressive achievement for an index that was setting records not long ago. It's down about 8% for the year. The Nasdaq is down 2%, which sounds better until you remember that the Nasdaq is supposed to be the exciting, high-growth index, and "slightly less bad" is not really the pitch.

There is something genuinely strange about this market. Earnings have been, by most accounts, pretty strong. Companies are making money. Revenue is growing. The normal inputs that you'd use to value stocks are fine, or at least fine-ish. And yet the market keeps going down, because markets do not trade on earnings alone. They trade on vibes, and the vibes right now are terrible. War in the Middle East, oil at $100, inflation re-accelerating, the Fed stuck in a corner. Good earnings cannot compete with bad vibes.

The Dow futures have been doing this entertaining thing where they open down 1,000 points and then claw back to roughly flat by the close. This is the kind of intraday volatility that makes professional traders feel alive and makes everyone else feel nauseous. It signals a market that has no conviction in either direction, which is somehow worse than a market that is confidently going down. At least when stocks fall with conviction, you know where you stand.

One number that keeps getting mentioned is the Buffett Indicator, which is just the ratio of total stock market capitalization to GDP. It's at 220%, which is higher than it was before the dot-com crash, higher than it was before 2008, higher than it was before COVID. Warren Buffett himself has been sitting on a record cash pile at Berkshire Hathaway, which is either an old man being overly cautious or the greatest investor in history telling you something. You can decide which interpretation you prefer.

The concentration issue makes this scarier than the headline numbers suggest. The top 10 stocks in the S&P 500 now make up about 40% of the index's total weight. That means your "diversified" index fund is really a bet on Apple, Microsoft, Nvidia, and seven of their closest friends. When those stocks catch a cold, the whole market sneezes. It's the kind of structural vulnerability that doesn't matter until it does, and then it matters a lot.

For the young professional with automatic 401(k) contributions, the standard advice is to keep buying through the dip, and that advice is probably correct over a 20-year horizon. But it's worth understanding what you're buying into: a market that is expensive by historical standards, concentrated in a handful of names, and facing headwinds that earnings growth alone may not overcome.

Goldman Says the R-Word

Goldman Sachs raised its 12-month recession probability to 25% this week, which is one of those forecasts that is designed to sound measured and responsible while also being quietly alarming. Twenty-five percent means Goldman thinks there's a one-in-four chance of recession. That's the same odds as flipping two coins and getting heads both times. It's not likely, but it's not the kind of unlikely you'd ignore.

More practically, Goldman pushed back its expected Fed rate cuts to September, which effectively means the first half of 2026 is a write-off for anyone who was hoping cheaper money would bail out the economy. The market is now pricing in about a 40% chance of one rate cut this year and a 40% chance of zero cuts. That remaining 20% presumably covers everything from "surprise cut in June" to "the Fed raises rates and we all pretend that's fine."

The shift in Wall Street consensus has been remarkably fast. In January, the mood was cautiously optimistic. Inflation was trending down. The labor market was solid. The Fed was going to cut rates two or three times, stocks would grind higher, and everyone would make their bonuses. That narrative lasted about six weeks before oil prices, geopolitical risk, and a stubborn PCE print blew it up.

What makes the recession talk particularly uncomfortable is that it comes alongside inflation talk. In a normal recession, prices fall, the Fed cuts rates aggressively, and the economy recovers. In a stagflationary environment (high inflation plus low growth), the playbook breaks down. The Fed can't cut rates because inflation is too high, but the economy needs stimulus because growth is stalling. It's the monetary policy equivalent of trying to drive with one foot on the gas and one foot on the brake.

For what it's worth, Goldman's track record on recession calls is mixed, which is a polite way of saying they've been wrong about as often as they've been right. But the direction of the revision matters more than the specific number. Six months ago, nobody on Wall Street was talking about recession risk. Now it's a regular topic of conversation, and the firms that talk about it first tend to be the ones whose clients are already positioning for it.

The Gates Are Closing

Here is something that should probably get more attention than it's getting: BlackRock limited withdrawals from one of its private credit funds last week. Then Morgan Stanley did the same thing with one of its funds. Then Cliffwater capped redemptions from its fund too. Three major asset managers, in the span of a few days, all telling investors some version of "we'd love to give you your money back, but now is not a great time."

Private credit has been the hottest trade in finance for the past three years. The pitch was simple and appealing: banks pulled back from lending after the regional bank crisis in 2023, private credit funds stepped in to fill the gap, and investors earned yields of 10-12% in a world where Treasury bonds paid 4-5%. The money poured in. Pension funds, endowments, wealthy individuals, and eventually retail investors through interval funds and other structures that promised liquidity with an asterisk.

The asterisk is the important part. Private credit is, by definition, illiquid. You're lending money to mid-sized companies that can't or won't borrow from banks. Those loans don't trade on an exchange. They don't have daily prices. When a fund says it will let you withdraw quarterly, it's making a promise that depends on its ability to either sell loans (hard) or use its cash buffer (finite). When too many people want out at the same time, the fund has to choose between selling assets at a loss or telling investors to wait. BlackRock, Morgan Stanley, and Cliffwater all chose "wait."

The timing is not great. Markets are volatile, valuations are wobbly, AI spending is getting questioned (which matters because a lot of private credit went to tech-adjacent companies), and geopolitical risk is elevated. These are exactly the conditions that make investors want liquidity, and exactly the conditions that make liquidity hardest to provide. It is, you might say, a design flaw.

The banking sector, by contrast, is doing fine. The major banks reported strong results this quarter with healthy return on equity and contained credit losses. This is ironic because the whole premise of private credit was that banks couldn't or wouldn't do the lending that needed to be done. It turns out banks are fine; it's the shadow banks that are having trouble. This pattern (regulated institutions weather the storm while unregulated ones struggle) is so common in financial history that it barely qualifies as a pattern anymore. It's more like a law.

If you have money in a private credit fund, this doesn't necessarily mean you should panic. Gate provisions are a standard feature, and funds use them to prevent forced selling that would hurt all investors. But it's worth paying attention to the difference between an investment that is illiquid by design and one that is illiquid by accident. When the gate goes up, it can be hard to tell which one you're in.

The S-Word

Stagflation is one of those economic concepts that gets invoked like a horror movie villain: everyone knows the name, most people have never actually experienced it, and the mere mention of it is enough to make economists nervous. The last real stagflation in the United States was in the 1970s, when oil shocks (sound familiar?) combined with loose monetary policy to produce a decade of high inflation, high unemployment, and general misery. We are not there yet. But the ingredients are starting to look uncomfortably familiar.

The PCE inflation number at 3.1% is backward-looking, which means it tells you what prices did last month, not what they'll do next month. With oil above $100 and no obvious catalyst to bring it down, forward-looking inflation expectations are rising. Consumers expect to pay more for things. Businesses expect to charge more for things. When expectations shift like that, they can become self-fulfilling: workers demand higher wages to keep up with prices, companies raise prices to cover higher wages, and the whole thing feeds on itself.

The Fed's problem is acute. Its mandate is to keep both inflation and unemployment low, and in a stagflationary environment, those goals conflict directly. Raise rates to fight inflation and you risk pushing unemployment higher. Cut rates to support jobs and you risk letting inflation spiral. The "soft landing" narrative that dominated 2024 and early 2025 assumed the Fed could thread this needle. That assumption is getting harder to maintain.

What makes this moment different from the 1970s (besides the fashion) is the speed of information flow and the complexity of global supply chains. In the 1970s, an oil shock took months to work through the economy. Today, futures markets reprice instantly, companies adjust within weeks, and consumers feel it at the pump by Tuesday. This speed can be stabilizing (markets adjust faster) or destabilizing (panics spread faster), depending on your temperament and your time horizon.

For someone in their late 20s or 30s with decades of investing ahead, stagflation is uncomfortable but not catastrophic. The 1970s were terrible for stocks in real terms, but people who kept investing through them did fine over the next 40 years. The hard part is emotional: watching your portfolio stagnate while your cost of living rises requires a kind of patience that is easy to recommend and hard to practice. The best thing you can do is boring, which is usually the case with personal finance. Keep your emergency fund topped up, don't panic-sell, and remember that the economy has survived worse than this (though perhaps remind yourself of that quietly, because saying it out loud feels a little tone-deaf at the moment).

The Bottom Line

If there is a theme to this week, it's that the things everyone assumed would go right in 2026 are, one by one, going wrong. Oil was supposed to stay manageable. Inflation was supposed to keep cooling. The Fed was supposed to cut rates. Private credit was supposed to be the smart money trade. All of these assumptions are being tested simultaneously, which is the kind of thing that turns a rough patch into something more serious. It's also, historically, the kind of environment that creates opportunity for patient investors, though "patient" is doing a lot of heavy lifting in that sentence. The market is not in crisis. But it is in the part of the story where the narrator says "and then things got complicated," and you know there are still a lot of pages left.