Monthly Market Debrief

Market Snapshot

Well… shit. US stocks posted their worst quarter versus the rest of the world’s indexes since 1980. The main driver of this decline is Trump’s chaotic and reckless tariff implementation. The lack of a coordinated campaign has markets overreacting to the smallest signals in his speeches and answers to reporters. His lack of understanding on the technical aspect of tariffs and disregard for their impact on prices (specifically cars) has markets realizing these may be more than “negotiating tactics.” I am writing this on April 1st, so it may not accurately reflect any changes while you read this on April 3rd. The fact that I must note when I am writing this indicates how unpredictable Trump’s plan (or lack thereof) is. Markets, companies, and investors like stability and predictability…

Another market dampener was higher than expected inflation data. Yes, I was wrong in my CPI prediction… BUT core PCE Personal Consumption Expenditures (the Fed’s preferred inflation measure) – ticked up to 2.8% in February from 2.6% in January. Markets did not like this one iota. The full force of the Trump Tariffs haven’t even hit inflation numbers, and they are already back on the rise. My specific recommendation was wrong, but my first prediction that the Fed cut rates too early is still very much alive.

Company Highlight - WIZ

On March 18^th, Alphabet (Google) announced a $32 billion acquisition of WIZ, a cyber security startup, in its largest ever acquisition. WIZ was founded in 2020. From 0 to $32 billion in less than 5 years is insane.

1,903 days elapsed from WIZ’s founding in January of 2020 to March 18^th, 2025. At $32 billion, that is the equivalent of adding $16.8 million in value PER DAY including weekends and holidays. At $32 billion, that is the equivalent of adding $194 in value PER SECOND. That is productivity and efficiency that DOGE can’t even dream about.

WIZ is a private company, so my 39% increase is based on an earlier offer from Google in July of 2024 for $23 billion. The trust you have in your product to turn down $23 billion… madness. The definition of risk it to get the $32 billion biscuit. 

WIZ is a digital security firm that specializes in cloud security. WIZ will provide a security blanket around Google’s cloud service as it fights Amazon and Microsoft for cloud dominance.

Right now, WIZ is an add on service for companies developing large cloud databases. From writing the code to monitoring servers, WIZ offers services for every stage of cloud computing services. They claim to be used by 50% of Fortune 100 companies. 

By adding WIZ to the Google umbrella, Google could offer WIZ security services at a discount or included with Google cloud packages. If the deal is approved by regulators, this may give Google the competitive edge it needs or be a black hole for profitability if innovation comes knocking. Looking at you DeepSeek.

Current Event - US Strikes Houthi Targets

In case you’ve been living under a rock, the National Security Advisor, Mike Waltz, inadvertently added Jeffrey Goldberg, editor-in-chief of the Atlantic, to a group chat where Secretary of Defense Pete Hegseth sent classified information regarding a pending strike on terrorists in Yemen. I won’t belabor the points that the media has focused on – Pete Hegseth texted classified information at the time it was sent and is lying to the American people, and Mike Waltz knows and communicates with Jeffrey Goldberg despite claiming his number was “sucked in” to his phone, potentially exposed a covert Israeli source, and is also lying to the American people.

I want to instead discuss the question that I feel the media hasn’t covered - why are we striking terrorists in Yemen?

The Yemeni Civil War started in 2014 after an Arab Spring uprising culminated in Houthi rebel forces taking over the capital of Sanaa. Since then, the conflict between Houthis, government forces, and other terrorist groups (namely al-Qaeda) has caused the world’s worst humanitarian crisis, killed hundreds of thousands, displaced millions, and infected over one million with cholera. In 2022, a UN-brokered ceasefire successfully decreased hostilities even beyond its expiration. Since then, Saudi Arabia, Houthis, and Iran have continued peace talks, with few notable developments.

Following Hamas’s October 7^th attack on Israel, Houthi terrorists have attempted to strike Israel and attacked/hijacked commercial ships in the Red Sea. With increased risk in the Red Sea, many companies have diverted ships around Africa increasing costs and time. The Red Sea accounts for 10% of global seaborne trade due to its strategic location as a choke point to the Suez Canal between Asia and Europe. 

In January 2024, US and British forces began attacking Houthi forces in Yemen to curb the attacks on commercial ships. 

 When asked about the effectiveness of the strikes in 2024, former president Biden said “are they stopping the Houthis? No. Are they going to continue? Yes.” A Pentagon spokesperson clarified that they never said the strikes would immediately stop the Houthis. Over 260 strikes later under Biden, Houthis are still able to launch attacks. 

Under Trump, the military has expanded its targeting and scale of attacks.  

We are being told the “devastatingly effective” strikes are to ensure freedom of navigation and deter attacks on commercial vessels, but the Houthi attacks haven’t stopped. In fact, less than 24 hours after this attack, Houthis launched at least 10 attack drones at our aircraft carrier. So, are our strikes actually successful? 

With a second carrier strike group underway to join the fight, how long will we sustain this campaign? At what point will we try a different tactic? 

The Signal chat leak and the associated response is an embarrassing indicator that our highest officials are unqualified and unprofessional. The bigger indicator, though, is the fact that the Trump administration is continuing an ineffective campaign of drone striking terrorists without an honest assessment of the plan and end state.

I am not against using our military power to ensure safe maritime travel. I am against sporadic strikes without an overarching campaign and strategy. Our military leaders, with congressional approval, need to develop a coherent strategy that codifies objectives and end states in a comprehensive plan that includes all aspects of US power. You cannot bomb an ideology out of existence as proven in Korea, Vietnam, Iraq, Afghanistan, and Gaza. I don’t know how to eliminate a terrorist organization but decades of trying has proven that it requires more than FA-18s and MQ Reaper Drones.

Debrief on Deck

Next week, we will be talking about Black Rock, not to be confused with the private military company, Black Water, although who has done more harm is up for debate. They were recently in the news for a deal to purchase a controlling stake of both two ports that control access to the Panama Canal. So what do they actually do? It’s not operate ports…