SOTS 2nd Hour: Iran Investor Headlines, Goldman's Credit Expert, & A Sora Subject? 3/25/26

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Sara Eisen (1:04)

Good Wednesday morning. Welcome to Squawk on the Street. I'm Sara Eisen with Mike Santoli. Today, we are live from Post 9, as always, at the New York Stock Exchange. David and Carl are out today. Coming up this hour, is the easing of tensions in the Middle East for real? We'll talk to former Israeli ambassador to the US., Michael Oren, about the reported US peace plan for Iran and whether Israel will be on board. Plus, Goldman Sachs credit expert Jonny Fine with us, as more concerns creep up around the private credit market this week. And we are on Supreme Court watch again, as we await a potential decision this hour on President Trump's authority to fire Fed Governor Lisa Cook. We'll bring you the headlines as soon as we get them. But Mike, everybody's watching oil prices as a barometer for how the market is feeling about the Iranian tensions. I decided today to present three other charts to watch because things are moving as a result of the war in Iran. So the first one we have here is fertilizer. We hear a lot about the straight of Hormuz being a key transportation hub for oil prices. 20% of the global oil is shipped through there. Well, guess what? About a third of fertilizer. So we did urea prices, which are spiking. They're not as liquid and traded as some of these oil and gas commodities. But this is obviously a huge deal. Urea fertilizer is, I guess, the most popular kind of nitrogen-based fertilizer. The Middle East is a key supplier. And straight-up hormone is key when it comes to shipping the fertilizer. People are worried about the spring planting season, which can start as early as March. There are, I guess, alternatives. And we do make a lot of fertilizer in this country. But globally, this is when you have to worry about spillover effects on inflation, like food.

Michael Santoli (2:47)

Exactly. Yeah. I mean, that's the reason also that there's considered to be this very narrow window timewise when you might be able to have this be kind of a quick interruption. And obviously, it's going to get transitory prices getting through. But maybe it's not something that you have to extrapolate for months on.

Sara Eisen (3:05)

I totally agree. And that is the thing. It's short term and long term here when it comes to some of these prices and also the cost of inflation. But how about diesel? You know, we talk a lot about gas prices going up, but diesel prices, and this is the lifeblood of the supply chain, right? This is in trucks and in agriculture and in equipment like tractors. I mean, this is what and it's beyond $5 a gallon. I think in California, it's gone up past $7 a gallon. And so when we also think about the kind of ripple effects that that some of this could have, you know, the blocking of the shipments of diesel and the spike in prices, you do look toward manufacturing and all sorts of industries because, you know, a lot of the transportation runs.

Michael Santoli (3:48)

Yeah, this is this is margin pressure is kind of the way I think investors would experience it. Just kind of this tax on commercial activity largely. And again, something that, you know, the market's good at looking through things if it knows that it's somewhat temporary or for on the on the downslope of the of the crisis. But that's what the market is kind of grasping for assurance about.

Sara Eisen (4:09)

Yeah, but we're going to be looking for comments and, you know, as we start to get earnings from the freight companies or the ad companies or the construction companies, because, as you say, it could, it definitely drives up their costs, at least in the short term. And then the third area we're watching where we've seen a big impact are mortgage rates, because we've seen treasury yields and mortgage rates track the market, the bond yields. They have risen on concerns about inflation and higher oil prices. I mean, look what's happened to the 30-year mortgage. We had such progress on it below 6 percent, and now we're back up to, you know, 6.5 percent. And that's already having a little bit of a ripple effect because we got the data today, total mortgage application volume dropped 10.5 percent last week from the previous week because we saw this spike. Again, you know, hopefully, it's very temporary. And when there's some sort of resolution and the war ends, it comes back down and then there's pent up demand. But it is something we're watching.