Weekly Market Update 20th Mar
20/03/2026
Rachel Winter discusses the ongoing impact of the situation in the Middle East, a busy week for central banks, and the latest developments in the battle to acquire Warner Bros.
Rachel Winter
Partner, Investment Management
Transcript
Good morning and welcome to the Killik & Co market update.
The situation in the Middle East continues to dominate headlines and move markets. This week we have seen equity markets weaken further, and the prices of oil and gas continue to rise – particularly following an Iranian strike on a major gas facility in Qatar.
Here’s the percentage move in the MSCI World index since the start of 2026. At the end of February it was showing a rise of 3% - it’s now showing a loss of about 2%.
Looking within the market, there has been quite a divergence in performance between different sectors. Here’s a 5 day heatmap for the S&P 500 index – the green showing gains and the red showing losses. In the top right, the energy sector is looking very green indeed – oil majors will likely be big beneficiaries of rising oil prices. On the bottom right, utilities have held up quite well. The utilities sector is viewed as been relatively defensive and stable, and investors often move towards it when things get a bit rocky.
In the bottom left hand corner, the mining sector is looking very red. There are a few reasons behind this. The dollar has strengthened – mined commodities generally trade in dollars, so a strong dollar makes them more expensive and less attractive. The higher energy costs will raise the cost of operating mines and squeeze the profit margins of mining companies. And lastly, in relation to gold in particular, interest rate expectations have gone up recently, and that makes holding an asset that doesn’t pay an income – i.e. gold – less attractive. The gold price has dropped and this has hit gold miners.
Let’s take a closer look at some of these commodity price movements. Here’s the oil price over the last year. The pink is brent crude, the global benchmark, and its price is heavily influenced by the supply of oil from the middle east. The price of brent crude has gone above $110 intra day this week. The green is WTI crude, which is the oil produced in the US. The transport networks for WTI are not as good as the networks for Brent, and therefore the price of WTI is generally a bit lower because buyers know they’ll have to spend a bit more on the transport. The prices of brent and WTI have diverged recently, because Brent has been impacted more heavily by the supply disruption in the middle east.
Here we’re showing some commodity price movements over the last month. WTI up 41%< brent up 50%, heating oil up over 62% - we know that’s an issue for many in the UK and the government is considering support, TTF gas – up 89% - it’s good that we’re not in winter when gas demand is typically higher, and finally coal up 25% because many are now looking for alternatives to oil and gas. It is expected that these movements will cause higher inflation.
This week has been a big one for central banks, with interest rate decisions from the bank of England, the federal reserve in the US, and the European central bank. While it had previously been hoped that this would be a year of interest rate cuts, the rising commodity prices and resultant inflation expectations have led all three central banks to leave interest rates on hold for the time being.
Bank of England at 3.75%, fed at 3.75% and the ECB at 2.15%.
Here’s what the bank of England said in their minutes:
“The near-term outlook for CPI inflation had risen relative to the February Report projection. Increased energy prices would impact near-term inflation directly via increased household fuel and utilities prices, and indirectly as business’ energy-related costs would also be affected… CPI inflation was now likely to be between 3 and 3½% over the next couple of quarters.”
Back in february, the bank had been expecting to fall to around 2% from April, so this rise in the prediction to 3.5% is quite significant.
And last of all, we’ve talked about the Netflix, paramount, Warner brothers bidding war quite a bit in recent videos, and it’s been quite interesting to see how this has been impacted by the war in Iran.
As a reminder, Netflix and paramount were both bidding to acquire warner, and Netflix bowed out of the race after pushing up the bid price to a very high level. the paramount price is shown in pink here. It spiked up when paramount won the bid, then declined as investors digested just how much paramount had committed to pay. It has declined further since then. $24bn of the money that paramount had secured for this deal was coming from sovereign wealth funds in the middle east, and it has been reported that some of these funds are now having to review their commitments. We’ll just have to see if the deal still goes through.
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