Trading update : 5 March 2026

While the world worries that the Middle East conflict could escalate into a world war, for now, financial markets are primarily concerned about its impact on inflation, which is already picking up globally as oil prices rise. Analysts predict prices between $100 and $120 a barrel, which would have serious knock-on effects for global growth, especially if the conflict rages for an extended period. All eyes are firmly trained on the White House and its next move. In unrelated news, crypto’s loss is a gain for equities, and emerging market bulls are predicting a longer run than initially expected.

The cost of war

Sharply higher global oil prices due to the conflict in the Middle East can inflict pain on US consumers and corporate America, said James Knightley, US economist at ING. This would feed into higher gasoline prices and place strain on consumers, many of whom are already complaining about a cost-of-living crisis ahead of November’s crucial midterm elections. The Financial Times reports that if oil reaches $100 a barrel, it could push consumer price inflation from 2.4% to above 4%. This would make the US Federal Reserve less likely to cut borrowing costs later this year. Also quoted by the FT, Ajay Rajadhyaksha, head of rates and securitised products research at Barclays, explained that every $10-per-barrel sustained rise in oil prices can knock off 10 to 20 basis points of growth over the next 12 months  “If oil were to rise to say $120/barrel and stay there, the US (and global economy) would take a considerable hit.”

Inflation expectation

According to a global survey of economists by Bloomberg News, inflation around the world is picking up due to the war with Iran. The biggest inflationary threat from the war stems from increased oil and gas prices, as well as knock-on effects from things like higher airfares and distribution costs. Most respondents predict the war will have a minimal impact on GDP in either the US, the eurozone or China, but much will depend on how long the conflict lasts.

Goldman bears

Goldman traders warned US equities may need to pull back further before they can mount a durable advance. JPMorgan CEO Jamie Dimon cautioned there’s more exuberance in the market than there should be, given the risks. Quoted by Bloomberg, Dimon warned that there’s “a lot of complacency” in the market and that inflation is one of the risks, referring to it as “the skunk at the party”.

Luxury in the crosshairs

Morgan Stanley Research said Richemont (CFRZ-TRQX) and Ermenegildo Zegna have the highest level of exposure to the conflict in the Middle East among luxury companies within its coverage. In a note published by Bloomberg, the research firm noted that Richemont and Zegna each have a 9% exposure to the region. “The Middle East accounts for around ~5% of sales for most luxury companies, with the [UAE] the largest country at ~3% on average, we believe,” analysts wrote. “A significant proportion of luxury spending in the UAE is carried out by tourists and ~40% by UAE residents. Given the high share of foreign residents, we believe that the 40% of luxury spend by UAE residents is likely split 50/50 between Emiratis and foreign UAE permanent residents.”

EM bull run

According to a Bloomberg report, UBS Group AG strategists expect emerging market stocks to outperform for longer than previously forecast, changing their view to see gains lasting at least until year-end.

Crypto cashout

According to a report from Wintermute that draws on JPMorgan Chase & Co. data, retail investors are moving away from crypto and towards stocks as speculative demand shifts. The trend gathered momentum after the October 2025 crash.

Go West

Prosus (PRX-JSE) and Naspers (NPN-JSE)-owned Tencent Holdings plans to expand its cloud-computing presence in Europe with new data centres planned in Germany, reports Bloomberg.

Bold moves

China’s annual political meeting will set a 2026 growth target and launch a new five‑year plan through 2030, with markets watching closely for stronger policy support. Key priorities include boosting high‑tech industries, reviving consumer demand, and securing China’s dominance in critical minerals. Bloomberg reports that these moves could significantly influence global commodities. The plan also emphasises energy investment, especially renewables, power grids, and battery storage. Historically, this meeting has acted as a near‑term catalyst for stocks, particularly cyclical and property shares. A notable shift is a stronger push to internationalise the yuan, signalling a bolder financial stance than in the previous plan.

Insurance slide

A recent CNBC report has highlighted the struggling US insurance sector, with underwriting profits declining 54% to $1.56 billion from $3.41 billion the previous year. Insurance investment income slid nearly 25% from to $3.1 billion from $4.088 billion. These factors will directly reflect in Berkshire Hathaway’s (BRK.B-NASQ) financial performance, as the company is often viewed as a proxy for the broader US insurance and investment landscape. As a core holding in its portfolio, the insurance industry’s headwinds have a magnified impact on its valuation and operating earnings.

Stock focus: Valterra Platinum

Valterra Platinum Limited (VAL-JSE) delivered a robust performance for the 2025 financial year (ended 31 December), characterised by a significant dividend beat that saw a payout ratio of 71%, which was well above the established 40% policy, underpinned by a balance sheet that remains substantially stronger than market consensus. While the company has maintained its FY26 production guidance and successfully lowered its capital expenditure outlook to R17.0–R18.0 billion through disciplined allocation and spend optimisation, investors should weigh these operational efficiencies against a stagnant cost profile. Specifically, the FY26 cost guidance of R19,000 – R20,000/oz remains flat year-on-year, missing expectations of a decline and marking the primary headwind in an otherwise bullish report. On the growth front, the completion of the Sandsloot pre-feasibility study and its progression to a full feasibility study signals a clear pathway for future volume expansion, offering a compelling mix of immediate yield and long-term project potential, provided the company can eventually get a tighter grip on unit costs.