A preface to the newsletter: It was a positive week for the markets as we saw a glimmer of hope in the Iranian conflict with the two week ceasefire announced on Tuesday. This news caused the markets to rebound significantly from the lows of the past month and whipsawed many investors. However the negotiations stalled this weekend and now the US will implement a blockade of the Strait of Hormuz. Expect more market volatility ahead as this drama continues to unfold. We also saw inflation and consumer confidence data paint a mixed picture for the near-term economic outlook here in the US, causing investors to pause the rally from earlier in the week. The crystal ball is very opaque at the moment, so stay tuned for updates as the situation develops.
In this week's newsletter I cover the news driving the markets and give a detailed explanation of how that news affects gasoline prices here at the pump. I also give a brief summary of an article about the importance of healthcare throughout women's lives and the need for better preventative care early on. The article is from the Longevity Science Foundation and you can read it in it's entirety on their website (please see the link below in my newsletter).
Have a nice week ahead,
Kevin
Stocks
It was a strong week for stocks, driven by a two-week ceasefire between the U.S. and Iran was announced Tuesday evening. The S&P 500 was up more than 3%, the Nasdaq gained roughly 4%, and the Dow climbed about 3%, all posting their best weekly performance this year.
Bonds
Bonds also had a good week as well. When the ceasefire was announced, oil prices declined about -13%, easing some fears of further inflation. That caused bond yields to fall sharply, which means bond prices went up.
A last-minute ceasefire between the U.S. and Iran sent markets soaring
After threatening that "a whole civilization will die tonight, never to be brought back again", President Trump announced that he and Iran agreed to a two week pause in fighting, and the markets responded with the biggest rally of the year. This is a pattern of behavior that we have seen from Trump before and the TACO trade was the talk of Wallstreet in the aftermath of the announcement. It is also a reminder not to panic-sell and react to Trump's blustery, belligerent rhetoric, as he usually backs down and seeks an offramp from his threats. However we should also keep a very close eye on whether the ceasefire holds as the situation is still very fragile. Both sides have claimed victory and the world is watching to see how things unfold during this two week period. My belief is that there will likely be more skirmishes, miscommunications, and brinkmanship ahead that will lead to the two week deadline being extended and another closing of the Strait of Hormuz before we get to a resolution.
March inflation came in hot... but the details were actually reassuring
Friday's inflation report showed prices rising at 3.3% compared to a year ago, the fastest pace in two years. But fortunately the spike was almost entirely caused by gas prices, which jumped sharply during March. When you set energy aside, underlying inflation held steady and actually came in a bit below what economists had expected. That's an important distinction.
The Fed is well aware that war-driven gas prices are temporary, and they tend to look through that kind of noise when setting interest rate policy. The Fed's next decision is April 29th, and almost no one expects rates to change at that meeting.
The University of Michigan consumer sentiment index plunged to a record low
The University of Michigan Consumer Sentiment Index (MCSI) is a monthly survey measuring US consumers' confidence in their personal finances and the overall economy. It covers three main areas: personal finances, business conditions over the near term, and long-term economic prospects. This past week the index fell to 47.6, the lowest in its 70+ year history, driven by worries over the war in Iran, energy prices, and fears of rising inflation. The index declined -10.7% from last month, and consumers estimated inflation over the next twelve months would reach as high as 4.8%. This score indicates that consumer confidence is lower now than during the 2020 pandemic lockdowns or the 2008 real estate crash.
"Whoever fights monsters should see to it that in the process he does not become a monster. And if you gaze long enough into an abyss, the abyss will gaze back into you." - quote from Beyond Good and Evil by German Philosopher Friedrich Nietzsche
I generally refrain from espousing my own political views in this newsletter, but I feel compelled to state that President Trump's threat to massacre the Iranian people was abhorrent and unbecoming of American leadership. I used to think that we were the good guys and an example for the rest of the world to follow, but it's impossible to make that claim when our leader is flippantly musing about committing crimes against humanity. He was correct that a civilization died on Tuesday, never to be brought back again - that civilization was American Exceptionalism. We should heed Nietzsche's warning, lest we become monsters ourselves.
The price you pay at the pump is really four costs stacked on top of each other:
Unrefined (crude) oil
This is the biggest driver. Crude oil is bought and sold globally as a commodity, and its price swings ripple through to gasoline within days. When Iran closed the Strait of Hormuz in late February, crude jumped from around $67 per barrel to over $100 almost immediately, and gas prices at the pump quickly followed. There's typically a 1–3 week lag before a move in crude oil shows up at the pump.
Crude oil is quoted both at the current spot price and in futures contracts. The spot price is the price for crude oil delivered right now at a specific location. It reflects immediate supply and demand. When you hear on the news that oil prices are up/down, they are usually referring to the spot price.
Futures contracts are agreements to buy or sell oil at a specified price on a future date, typically between one to three months out. Futures trade on exchanges and are used by oil companies to hedge against oil price fluctuations. Right now, given the Strait of Hormuz situation, the spot price is dramatically more stressed than futures, with spot prices hitting record levels above $144 per barrel just before the ceasefire. Meanwhile futures contracts for future months are considerably lower, meaning the market expects conditions to ease. Gasoline stations buy wholesale fuel that is priced based on near-term futures and spot prices.
Refining costs
Crude oil has to be processed "cracked" into finished gasoline by refineries. This step adds cost; refinery capacity constraints, unexpected outages, and the seasonal switch between winter-blend and summer-blend all affect the price. Summer-blend gasoline is more expensive to produce.
Americans drive significantly more from Memorial Day through Labor Day. More time on the road means more demand for gasoline, which pushes prices up. Prices typically begin rising in February and peak around June. Furthermore, the EPA requires refineries to switch from cheaper winter-blend gasoline to summer-blend starting in June. Summer blends burn cleaner but are more expensive to produce. This switchover alone typically adds 15–30 cents per gallon to costs, and it also means refineries temporarily go offline for retooling, thereby reducing supply right when demand is climbing.
Distribution and retail markup
Getting gasoline from refineries to your local station involves pipelines, tanker trucks, storage terminals, and the station's own operating costs and margin. Regional differences in this infrastructure are why California is routinely $1.00–$1.50 per gallon more expensive than in the Midwest.
Mother Nature can have a significant impact as well. Many key Gulf Coast refineries are vulnerable to hurricanes. A major storm, like Hurricane Katrina back in 2005, can knock out a significant share of U.S. refining capacity/infrastructure and cause sharp regional price spikes. The same can be said for tornados in the Midwest, wildfires in California, or snowstorms in the Northeast. Natural disasters can have a huge impact on gasoline distribution and cause regional supply shortages.
Taxes
The federal gas tax has been fixed at 18.4 cents per gallon since 1993. State taxes however vary enormously from state to state. California adds another 68 cents/gallon, while states like Alaska and Missouri charge under 20 cents. This is another reason why regional gas prices can vary so much.
Prediction for the price at the pump for the remainder of the year
The current national average price per gallon is roughly $4.25; with California leading the country at $5.89 per gallon and Oklahoma being the cheapest at $3.27 per gallon. We aren’t quite at the peak of the seasonal price adjustment yet (June) so even if the ceasefire holds and the Strait of Hormuz remains open, gasoline prices are expected to rise in the near-term. Fortunately there is light at the end of the tunnel: gasoline prices are expected to fall slightly once we get into the summer months and continue to progress downward later in the year. However, should we see a return to hostilities with Iran and shipping stymied in the Strait of Hormuz again, then that would exacerbate the current oil price situation and likely cause gasoline prices to remain elevated for longer due to the bottleneck in supply.
A different way to think about agency in long term health & philanthropy
Female Health Across Lifespan
Women's health is a lifelong longevity strategy, not just a concern for later decades, yet most healthcare remains reactive rather than preventive.
Adolescence sets the biological foundation for metabolic health, immune function, and mental resilience. Early signs like irregular cycles or fatigue are often missed but matter long-term. Untreated imbalances in adolescence, such as hormonal or stress-related issues can increase lifetime risks for PCOS, autoimmune disease, depression, and even dementia. The reproductive years are the prime time to build resilience through cycle health, strength, and mental health, whether or not fertility is a priority.
Perimenopause and menopause are the most under-researched yet most consequential windows in female aging, affecting metabolism, cognition, mood, cardiovascular health, and bone density simultaneously. How menopause is managed directly predicts downstream risk for Alzheimer's, stroke, osteoporosis, and depression, making specialist care during this phase critical.
Postmenopausal years are longer than most women expect, yet care in this stage frequently becomes reactive, leaving many conditions undiagnosed that could have been prevented earlier.
Each life stage requires different specialists; from pediatricians and gynecologists early on, to menopause-trained clinicians, geriatricians, and cognitive specialists later. Healthcare systems consistently fail to adapt to women's changing biology across the lifespan, creating gaps in prevention and long-term outcomes.
The core message: treating women's health proactively at every life stage, not just during illness, is the most effective longevity strategy available.
To learn more, go to: Female Health Across Lifespan
Although we currently have a ceasefire with Iran, the negotiations are unlikely to be a smooth process. I highly doubt that the conflict will come to a conclusion by the two week deadline, so expect more market volatility as the uncertainty drags on.
The good news is that aside from energy and food prices, the greater US economy has remained strong and we do not appear to be on the verge of a recession just yet. With that said though, consumer confidence is at an all time low, and expectations influence behavior, which can create a self-fulfilling prophecy. If the greater populace expects a recession and cuts back on spending in anticipation of one, then that contraction in consumption in and of itself can lead to a recession when one otherwise could have been avoided.
For now we must wait and see how things play out both in the Middle East and here at home. So much is hinging on geopolitics and that situation is evolving daily. Don't make the mistake of extrapolating today's news into the future; instead stay diversified, stay disciplined, and stay focused on the long term big picture.
Have a nice week ahead!
Kevin