Will the U.S. or Iran Decide When the War Ends?

0:00Luke Vargas:Model portfolios have evolved from a one-size-fits-all solution. In a recent roundtable conversation, Jeffrey Saif of BlackRock and Alessio DeLongis of Invesco break down what's driving the next model moment, discussing how a deeper level of customization is producing a better alignment with investor goals and creating a practice differentiator for financial advisors.

0:25Luke Vargas:President Trump promises a quick end to the Iran war as Iran pledges to fight on. Plus, why Americans aren't likely to see pricier natural gas, even if the rest of the world is.

0:38Ryan Dezember:All things being equal, the American consumer should be pretty well insulated from the shock, unlike folks in Europe and Asia.

0:45Luke Vargas:And the rest of the day's news as Chinese exports blow past analyst forecasts and the Nasdaq embraces tokenized trading. It's Tuesday, March 10th. I'm Luke Vargas for The Wall Street Journal, and here is the AM edition of What's News, the top headlines and business stories moving your world today.

1:09Luke Vargas:President Trump says he is looking for a quick end to the war in Iran, saying it will be over very soon, after some of his advisors privately urged him to look for an exit plan amid rising energy prices and concerns that an extended conflict could spark political backlash. We report that Trump has been briefed on some polling about the war and that some in his inner circle have fielded calls about the midterm elections from nervous Republicans. White House Press Secretary Caroline Levitt denied that report, saying it was full of crap, that Trump's aides were focused on ensuring that the war is a tremendous success and that Trump will be the one to decide when it's over.

1:48Luke Vargas:Here he was at a press conference yesterday evening in Florida.

1:51Ryan Dezember:Mr. President, you said the war is, quote, very complete, but your defense secretary says this is just the beginning. So which is it and how long should Americans be? Well, I think you could say about the beginning. It's the beginning of building a new country. We could call it a tremendous success right now as we leave here, I could call it. Or we could go further and we're going to go further.

2:14Luke Vargas:Journal Middle East correspondent Jared Malson told me that whether the war ends very soon, or is just beginning, is partly in Iran's hands.

2:23Jared Malsin:Well, the Iranians have said, essentially, that they will decide when the war is over, with the Islamic Revolutionary Guards Corps saying yesterday that they would be the ones to decide when, for example, to reopen the Strait of Hormuz, which at the moment is at the center of the crisis around Iran and very likely has something to do with why Trump said what he said yesterday. One-fifth of the world's oil passes through the strait, and right now it's all but closed due to Iranian attacks and threats. Even if the administration decides to stop bombing, they would face the challenge, number one, of reopening the Strait of Hormuz and easing pressure on oil markets, and more generally, of easing the security threat from Iran across the region.

3:13Jared Malsin:and they're going to be reckoning with a region that's really been transformed by this. If they decide to stop bombing in the coming days, for example, the Iranian regime would still be in place. It would have survived the military offensive. And from the Iranians' perspective, they have a lot of incentive to continue to use the leverage they have over energy markets to try to ensure their own survival. because Trump began this war by saying that he wanted to change the Iranian regime. Israeli Prime Minister Benjamin Netanyahu has been consistent in saying that that's what he wants. That's something that he reiterated this morning.

3:52Jared Malsin:And so that's how the Iranian regime is going to view the conflict as a fight for their survival.

4:00Luke Vargas:Well, another potential factor in the war's trajectory is the state of global energy markets. We spoke yesterday about the big run-up and pull-back in oil prices, which remain around$90 a barrel this morning. But for much of the world, natural gas prices are being just as closely watched. And it's clear why. Because while U.S. prices are actually down on the year, they remain considerably higher in Europe, even after double-digit declines today. As I discussed with reporter Ryan DeZember, there's a reason gas is responding differently to global volatility than oil, and why Americans are likely to be spared some of the pain of higher prices seen elsewhere.

4:37Ryan Dezember:Well, after the U.S. and Israel started bombing Iran, the Strait of Hormuz became sort of a no-go zone for ships carrying oil, as we know, but also liquefied natural gas from the Persian Gulf. That's about 20 percent of the world's supply. So what we saw was international natural gas prices surge, while in the U.S. they rose, but by a relatively small amount. Last week, benchmark futures in the U.S. rose 11%. And that compares with more than 50 % over in Europe. So we see this big gap where America's domestic supply is sort of cushioning the blow from this.

5:12Luke Vargas:Yeah, explain that more. What's responsible for sort of insulating America here?

5:16Ryan Dezember:So in the US, we have a few things going for us. We have record production lately, despite the big storms that caused some record sort of weekly drawdowns in supply back in January. We're ending the winter about on target with like the five-year average. So amply supplied going into spring when those stockpiles grow ahead of summer. And then of course, we have a big booming LNG export business in the US, but it's pretty much maxed out right now. There's not really capacity to send much more volume overseas than exporters already are. And so you're not going to see a huge surge in prices, probably, because you can't really extract more from the domestic market to send overseas until the next LNG terminals open.

6:03Luke Vargas:So a foreign buyer that is desperate for supply can't bid this away from American consumers quite so easily as maybe we see in crude. Is that the way to think of it?

6:11Ryan Dezember:Yeah. And really what's happening is they're bidding against each other. So the boats that do go out, we're seeing some movement where they may be destined for, say, Europe and someone in Asia buys them instead. More than 90 % of the LNG that comes out of the Persian Gulf goes to Asia. So you're going to see prices bidding up for any available cargos to go that way, as opposed to other places in the world right now.

6:33Luke Vargas:This all sounds like good news for American consumers, particularly their home heating bills. What are the other sort of end user effects of this.

6:41Ryan Dezember:Yeah. And what you'll see is, you know, manufacturers use a lot of natural gas. We saw big disruptions during the major freeze off in late January in the US to the point that factories and stuff were getting curtailed, not getting any gas, having to go to the spot market and pay 10, 20 times the normal price for their natural gas. You're going to see that reflected in stock prices and a benefit to them relative to overseas competitors. An example we had a few weeks ago was International Paper, the big cardboard box maker. They estimate something more than$40 million hit to their bottom line from the big price spike.

7:17Ryan Dezember:So if U.S. businesses in the U.S. natural gas market can avoid that, that's going to trickle down not only to our power and natural gas bills at home, but also to the companies that make basic products from steel and cardboard boxes, of course, all the way to things like toothpaste and drywall.

7:36Luke Vargas:The million-dollar question, Ryan, is can the U.S. energy industry and U.S. manufacturers win here and the U.S. consumer win at the same time? Because in some ways, the consumer is the one more at risk now of the oil shock.

7:50Ryan Dezember:Yeah, I mean, it'll be a benefit, right? Summer's closer than we think, and we'll be a crank in our air conditioners. So, you know, in that sense, Americans are going to want to see that natural gas inventory stay robust, see a lot of gas going into it. You know, know, we have seen the price go up at a time of year when you'd expect to see the price going down because our heaters aren't running, you know, all day long. But all things being equal, the American consumer should be pretty well insulated from the shock, unlike folks in Europe and Asia.

8:19Luke Vargas:I've been speaking to Wall Street Journal reporter Ryan DeZember. Ryan, thank you as always for the update. Thank you. And we want to know how volatile energy and commodity prices are affecting you and your business. What do they mean for your plans today, next week or later in the year? Is your bottom line being impacted? And what about your pricing strategy? Let us know by sending a voice note to WNPOD at WSJ.com or leave us a voicemail at 212-416-4328. Either way, just make sure to include your name and your location so we can use your comments on the show.

8:57Ryan Dezember:Every day, the people of Meta work to protect over 3 billion users around the world. My name is Jackie. I have been at Meta almost eight years now. As a designer, you really do have to think through the end-to-end implications of everything that you're doing so we can innovate while risks are mitigated. My hope is that I am communicating really clearly the way that we're using your data and the way that we are delivering all of the products Meta offers. Get the facts at meta.me slash risk.

9:31Luke Vargas:China's exports have soared in the first two months of the year, rising more than 20 percent compared to a year earlier, highlighting a continued reliance on overseas demand. Exports to Southeast Asia and Europe were both more than 25 percent higher year-on-year, while exports to the U.S. fell 11 percent. Meanwhile, shares of CATL surged in Asian trading today after the world's largest EV battery maker reported profit growth of 42 % for last year. The Tesla supplier cruised past expectations in spite of higher lithium prices and cooling EV demand in China. And Nasdaq says it will work with crypto exchange Kraken and issuing companies in developing a plan to offer tokenized stocks on its exchange by early next year.

10:18Luke Vargas:The tie-up will allow people around the world to buy and sell digital versions of American stocks 24-7, not just during U.S. business hours. Markets reporter Alexander Osipovich says it shows how digital assets are becoming a greater part of traditional investing. So far, many of the companies that are doing tokenized equities are cryptocurrency companies that are startups that are a few years old and had a number of scrapes with the regulators. NASDAQ is a very established exchange. It is the place where Apple and Tesla stock is listed, and they are proposing to do tokenized equities in a way where it would work more seamlessly with existing systems.

10:58Luke Vargas:For example, one problem right now with some of the versions of tokenized stocks out there is you can't actually vote your shares. Theory being a shareholder means you get a chance to vote in shareholder votes and the tokens don't let you do that. So that's one of the problems that NASDAQ would solve.

11:15Luke Vargas:Canada and the UK are backing away from proposed social media crackdowns. Canada has formally reversed its order to shut down TikTok's domestic unit, allowing the app to operate under new data and child safety conditions. Similarly, UK lawmakers have rejected an Australian-style blanket ban on social media for those under 16, opting instead for more flexible restrictions to prevent children from accessing unregulated parts of the web. And if you're flying through U.S. airports this week, you might want to arrive earlier than originally planned. The ongoing partial government shutdown is triggering long security delays, with travelers advised to arrive four hours early.

11:56Luke Vargas:One passenger in New Orleans told WWL-TV about the scene yesterday at the city's airport.

12:02Jared Malsin:I was here three weeks ago during Mardi Gras, and it was no problem. This is insane.

12:07Luke Vargas:TSA officers are set to miss their first full paychecks this week, fueling staffing shortages just as the spring break travel rush begins. The Department of Homeland Security has remained largely shut since February 14th amid a funding deadlock in the Senate. And that's it for What's News for this Tuesday morning. Today's show was produced by Hattie Moyer and Daniel Bach. Our supervising producer is Sandra Kilhoff, and I'm Luke Vargas for The Wall Street Journal. We will be back tonight with a new show. Until then, thanks for listening.

12:49Luke Vargas:model portfolios are no longer one size fits all in fact 85 percent of investors want financial advisors to deliver models customized to their individual goals investment preferences and tax circumstances discover some of the top themes driving the shift in seizing the next model moment by blackrock