Alphabet Goes FCF-Negative!

Renewed chaos in the oil markets has broad asset-class implications

Key Takeaways

• Oil Chaos Returns: The stock market may be awakening to the array of headwinds facing it. The war is intensifying in the Middle East, and now not only is the Strait of Hormuz shuttered again, but the Houthis are also joining in and wreaking havoc on the Red Sea (claiming their first attack on commercial ships in recent months). About 20% of the world’s oil supply transits these two bodies of water. Chaos is back in the crude market: Brent crude has extended its gains to take out $98/bbl, up +11% for the week and +34% in July to date.