In this episode of Bulls vs Bears Jonathan, Mark and Kai discuss the escalating US-Israel-Iran conflict dominating markets, with oil prices surging amid attacks on key energy sites like South Pars, the Pentagon's massive $200 billion funding request signaling a prolonged engagement, and Trump's unpredictable diplomacy including threats to flatten adversaries and awkward diplomatic moments. They analyze bearish technical signals in equities (S&P breaking below its 200-day moving average), the impact of quadruple witching options expiry potentially unleashing downside volatility, private credit liquidity strains and withdrawal caps at major firms like Blackstone, gold's underperformance despite geopolitics due to higher-for-longer rates and liquidation pressures, and sector rotations favoring energy while pressuring growth assets. The team shares a custom Mosaic analysis estimating conflict duration (base case through late June) and asset implications, while remaining predominantly bearish on equities short-term amid macro uncertainty and limited catalysts for reversal.

Key Summary Points:

• The ongoing US-Israel war with Iran has driven sharp rises in oil and gas prices, with attacks targeting critical energy infrastructure like Iran's South Pars field and retaliation against Gulf hubs.

• Technical indicators for the S&P 500 turned solidly negative, including a close below the 200-day moving average for the first time since mid-2025, signaling broader market weakness.

• Quadruple witching options expiry is expected to remove protective put hedging, potentially allowing greater volatility and a downside move in equities next week.

• Private credit faces isolated but notable stress, with record withdrawal requests leading firms like Blackstone and Blue Owl to cap redemptions amid liquidity concerns.

• Gold has underperformed typical geopolitical safe-haven rallies due to expectations of persistent high interest rates from oil-driven inflation and recent heavy two-year gains prompting profit-taking.

• The team estimates the conflict's most probable end date around late June 2026 based on multiple factors including asymmetric warfare dynamics and political pressures, with energy sectors benefiting while broader risk assets remain vulnerable.