This Is How Big Money Is Trading the War in Iran

Ozan Tarman (0:02)

Bloomberg Audio Studios, podcasts, radio, news.

Joe Weisenthal (0:18)

Hello, and welcome to another episode of the Odd Lots Podcast. I'm Joe Weisenthal.

Tracy Alloway (0:23)

And I'm Tracy Alloway.

Joe Weisenthal (0:25)

Tracy, we're recording this March 25th, 2026 That's 9, 10 a.m. Are you gonna do the seconds as well? No, but the reason I do mention the time the cash trading and the stock market hasn't opened, the reason I mention the time is not just because things are moving fast, but to establish, we've had market moving headlines already this morning. Oh, absolutely. Just in the last 15, 20 minutes, we got some headlines attributed to the Fars News Agency out of Iran saying, there is no interest in talks, there's no interest in ceasefire. The US position about pursuing a ceasefire is illogical. That moved futures down a little bit. We're, it's a cliche, a headline-driven market, you hear that a lot. The last several weeks have felt like the headline-driven market to drive all headline-driven markets.

Tracy Alloway (1:11)

No, I know it's a cliche, but it really is a headline-driven market. And I think part of the issue here is because no one's entirely sure what the goals are when it comes to Iran, it's really hard to judge progress of the conflict on any sort of fundamental basis, right? So all you can look at is basically what Trump and the other two sides are saying. And so you get these big reactions every time they tweet something or post on Truth Social and then tend to contradict each other.

Joe Weisenthal (1:41)

Absolutely. And you know, I do think, look, there is this extreme level of skepticism from almost any headline you get out of the US White House. I think if you go back to the post-liberation day environment, particularly with the sort of modest rapprochement with China, you would get these headlines, we're talking, and then the Chinese would put out a headline, we're not talking. But then it turns out that there was a little bit more talk than what maybe the Chinese side had admitted to.

So, often I think, as much as you dis... as many people are inclined to disbelieve headlines, I don't think people will disbelieve them entirely. When Trump said yesterday that the Iranians had sent him a prize that was extremely valuable, and it's like, whew, I mean, that's tough to take seriously. But is there some modest signal? I don't know, it's really tough. It's really tough. But I just want to say two other things real quickly on this, which is that even with the headlines today about Iran rejecting ceasefire, futures are still up. So it's not like people have like completely, oh, nothing's happening. And for all the talk about, and we've had multiple guests, and they're the smartest people in the world, talk about oil is going to surge the longer this goes on. As of the time we're talking about this, Brent crude is still right around or just under $100. We haven't had the mega surge yet. So I like to take markets seriously, even if sometimes I don't always understand what they're doing.

Tracy Alloway (3:05)

Well, the big question to me is whether or not markets are still in denial, right? And you see people talking about like, oh, people are being very optimistic about the future. I saw the Morgan Stanley Report saying that corporate profits were going to go up later this year. The oil price, again, we're talking about the closure of the Strait of Hormuz, which is the sort of thought experiment that has bedeviled oil analysts for decades. And yet, the reaction has been kind of muted. Meanwhile, in the rates market, there's a lot going on there, too. And you still have a lot of bond traders who are very reluctant to price out the possibility of a rate cut later this year.

Joe Weisenthal (3:45)

Completely. And it feels like the idea of a rate cut, at least for now, does not seem anywhere near the quote table. But anyway, so how do traders even make sense of this headline? How do they know what headlines to believe? Why does there sometimes seem to be this gap between what a lot of people think the market should be and where it actually is? Very excited to say we have one of the most plugged in people that we know, someone who is talking to people who move serious money every single day. He goes around the world and he has dinners with them and he talks to them about their trades. He even brought us a nice gift, which is his tour t-shirt. It is the cover of the Macro Dinners 2026 Tour with a nice Deutsche Bank logo.