The Strait Shall Remain Shut' Says New Ayatollah; Cosco's Customers Sue Over Tariff Refunds; and Morgan Stanley Gates Private Credit Fund
- Dipo Owolabi
- Mar 13
- 6 min read
Updated: Mar 14
Geopolitics, market stress, and the race for AI dominance are colliding across the global economy. Iran’s newly installed Supreme Leader Mojtaba Khamenei has vowed to keep the Strait of Hormuz blocked as leverage against the U.S. and Israel, sending oil markets on edge. In the U.S., Costco Wholesale is facing a consumer lawsuit over whether tariff refunds tied to former President Donald Trump should be passed back to shoppers. Meanwhile, Morgan Stanley has restricted withdrawals from one of its private credit funds as redemption requests surged, highlighting growing scrutiny across the $2 trillion market. And in Silicon Valley, Meta Platforms has delayed the rollout of its next-generation AI model “Avocado” as competition with rivals intensifies. All this and more in today’s Read It and Eat! |
Markets Around The World
Markets as of 12th March 2026. Cells in RED mean that the value is down, cells in Green mean the value is up.
MAJOR HEADLINES
Iran's new supreme leader vows to keep Hormuz shut, says world should prepare for $200 per barrel of Oil
Iran will fight on and continue using the Strait of Hormuz as leverage against the United States and Israel, newly installed Supreme Leader Mojtaba Khamenei said Thursday in defiant remarks attributed to him following the death of his father. The hardline cleric called on Iran’s neighbours to shut U.S. bases on their territory and warned Tehran would keep targeting them, saying “the lever of blocking the Strait of Hormuz must continue to be used,” referring to the shipping route through which roughly a fifth of global oil passes. The world prepare for $200 per barrel of Oil.
The prospect that the Strait of Hormuz could remain blocked, one of the most severe disruptions possible to global energy supply has continued to rattle markets. Oil prices jumped roughly 9% to around $100 per barrel after briefly falling earlier in the week on hopes of a swift end to the conflict. Even as governments move to release hundreds of millions of barrels of strategic oil reserves to stabilize supply, the scale of the potential disruption from Hormuz, a corridor that carries roughly one-fifth of the world’s oil, is so large that those emergency barrels are barely making a dent in market fears.
Investors are still pricing in a short war. That widespread assumption of a short war rests on history, Donald Trump’s past willingness to back down when times get tough, the U.S. elections later this year and a guess that Iran won’t be willing to keep taking so much damage from the air. Logic and game theory may not be enough, though. Reuters
Costco Sued by Customer For Seeking Refunds After Passing Over Tariff Costs
Costco Wholesale was sued on Wednesday in a proposed nationwide class action seeking U.S. customer refunds for higher prices charged by the company before the U.S. Supreme Court struck down import tariffs imposed by President Donald Trump. The lawsuit filed by a Costco shopper in federal court in Illinois, seeks a declaration that the company must return to customers any refunds it receives for tariffs it paid under the International Emergency Economic Powers Act (IEEPA).
The Supreme Court ruled on February 20 that Trump overstepped his authority by using the emergency powers law to impose sweeping tariffs last year. The order has teed up sprawling litigation in the U.S. Court of International Trade, where Costco is among more than 2,000 companies suing the administration to recover duties they paid. Global shipper FedEx is facing a similar consumer class action filed in Florida federal court last month. “This lawsuit seeks to prevent Costco, the third-largest retailer in the world, from double recovery,” the complaint said.
“Costco has made no commitment to return any portion of anticipated tariff refunds to the consumers who bore those costs.” Costco CEO Ron Vachris told analysts last week that it was still unclear if or when businesses will get back the IEEPA tariffs they previously paid. If Costco does receive refunds, he said, the retailer plans to channel them into lower prices and improved value for shoppers. Wednesday's lawsuit said the company was promising only "a possible future benefit to an indeterminate group of future shoppers." Wall Street Journal
Wall Street banking giant Morgan Stanley has limited redemptions at one of its private credit funds after investors sought to withdraw almost 11% of shares outstanding, a regulatory filing showed on Wednesday.
A flurry of bad news following several credit issues in recent months has drawn fresh scrutiny to the roughly $2 trillion private credit market, as investors question the health of loan portfolios and the resilience of borrowers in a higher interest rate environment. Morgan Stanley Private Credit said in a letter to investors that the North Haven Private Income Fund (PIF) returned roughly $169 million or about 45.8% of investors' tender request for the quarter. The Wall Street powerhouse signaled that the private credit industry faces several challenges, including uncertainty around an M&A recovery, speculation about credit deterioration and a contraction in asset yields.
Morgan Stanley said the PIF was invested in 312 borrowers across 44 industries as of January 31, and that credit fundamentals at the fund remain broadly stable. "As marketed and consistent with the disclosure in our private placement memorandum, we will be fulfilling tender requests for 5% of units outstanding, as of December 31," the bank's investment management arm said in the letter. Morgan Stanley added that limiting withdrawals will help avoid asset sales during "periods of market dislocation" and maximize risk-adjusted returns for investors over time. "Dispersion between stronger and weaker credit is increasing," it said. Reuters |
Meta pushes AI model 'Avocado' rollout to May or later
Meta has postponed the release of its artificial intelligence model "Avocado" to at least May, from this month. The performance of Meta's new AI model currently falls between Google's AI Gemini 2.5 and Gemini 3, delaying its launch until May or June, a person familiar with the matter told Reuters.
The delayed timeline comes even as the company invests heavily to expand its AI ambitions, including a roadmap for building its own chips. In January, Meta laid out capital-spending plans of between $115 billion and $135 billion for the year in the pursuit of "superintelligence" - the horizon where AI will outsmart humans. Meta's new model, which the company has been working on for months, has fallen short in performance when compared with the latest offerings from rivals, the NYT report said. "As we've said publicly, our next model will be good, but more importantly, show the rapid trajectory we're on, and then we'll steadily push the frontier over the course of the year as we continue to release new models," a Meta spokesperson told Reuters, reiterating CEO Mark Zuckerberg's remarks during an earnings call in January.
"We're excited for people to see what we've been cooking very soon," the spokesperson added. The leaders of Meta's AI division have discussed the possibility of temporarily licensing Gemini to power the company's AI products, the report added, although no decisions have been reached. Media outlets had reported in December that Meta was working on a text AI model code-named Avocado, slated for a first-quarter launch. Yahoo.Finance
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