MARKET CALL: Stock P/Es Discounting Higher-For-Longer Oil Prices & Interest Rates

The fog of war is getting thicker because of the likelihood of US boots on the ground (the "bog of war"). The US Department of War has deployed 15,000 troops to the war zone, raising the risks of a longer war and more American casualties, which will cause an uproar in the US.

On Tuesday, March 3, we wrote: "We've been expecting a pullback due to excessive bullish sentiment, but now we expect a 10% correction from the high. It's hard to imagine that the IRGC won't use drones and speed boats to maintain their effective blockade of the Strait. If they are successful in doing so, the correction could be closer to 15%." On March 8, we raised the odds of a recession and a bear market in stocks from 20% to 35%. We also warned that we can't rule out a bear market "until ships can sail freely through the Strait."