Perhaps not surprisingly, a lot of people have said something along the lines of “it must be an interesting time for you” to me recently. So it would seem. After all, global conflicts and political dysfunction in Washington should make for riveting new stories.
However, should doesn’t always mean does.
You see, folks who do what I do for a living are supposed to look behind the headlines and determine what is really happening. As unbelievable as it may seem, the ‘rest of the story’ is almost boring: somewhat modest economic growth in the private sector, and no pressing reason why that should meaningfully change.
To be sure, the conflict — or is it war — with Iran has caused a disruption to the global supply of crude oil. As a result, the price of a barrel of the black stuff has risen pretty substantially. The fear is that the longer it stays elevated, the more it will dampen global economic growth.
After all, if you are paying more for energy, you will have less money to purchase other stuff which might have a greater, what economists might call, multiplier effect. That makes sense, right?
Now, should the situation in Iran lead to more than a temporary impairment in the global supply of crude oil, then folks will start changing their economic forecasts for the remainder of 2026 and beyond. However, you have to remember: oil is a commodity. A lot of countries have a lot of it, and a lot of companies in those countries are pulling it out of the ground in whatever form.
Think about that. When the price of something goes up, what do most suppliers do? Make less of it? Or more? Intuitively, it would seem producers would want to increase the supply of whatever it is that has gone up in price. Therefore, it is reasonable to suspect the world’s crude oil explorers and producers are doing whatever they can to dredge up as many ‘dead dinosaurs’ as they can while the ‘fun’ lasts.
That is if they want to make more money and it seems companies generally like that sort of thing.
Obviously, I am running the risk of sounding extremely cavalier about a very serious situation in the Middle East. In fact, I might be sprinting as opposed to running. However, investing and generating economic forecasts is about odds, probabilities and likelihoods. As cold as it may sound, it isn’t about sentiment and/or heartstrings.
Here are some brass tacks.
According to the World Bank, in 2024, Iran’s per capita Gross Domestic Product (GDP), in purchasing power parity terms, was $19,874. By comparison, it was $85,810 for the United States that same year.
Furthermore, the most recent estimate of both countries’ populations is approximately 341,784,857 for the U.S. and around 86,563,000 for Iran. As a result, on paper, a war between Iran and the United States would appear to be a lopsided contest. All the more so when you add in the Israelis to the American side.
Those are the facts.
Arguably, these facts might be the reason why the markets haven’t responded even more negatively than they have thus far this month (March 2026). Yes, yes, the S&P 500 is down 3.39% for the month to date as I type here at 11:11 CDT on March 13, 2026. No argument. That isn’t a lot of fun, and I won’t argue that it is.
However, from all of the headlines, commentary, noise and hysteria over the general state of affairs, I would completely understand if you had been under the impression the markets were down much more than that.
What’s more, I might even try to comfort you by saying something like: “this recent pullback due to all of this unpleasantness is a convenient way, and time, for the markets to let out a little air. After all, we have been on quite the run for the last several years.”
Of course, the longer the fighting continues, the less sanguine my comments and general outlook might be. Until such time, frankly, the data has been kind of dull. This morning’s U.S. GDP report is a perfect example, although there are others.
To be sure, the headline was less than impressive. The Bureau of Economic Analysis (BEA) reported the economy grew at a 0.7% annualized rate during the fourth quarter of 2025. That doesn’t sound very good, and I suppose it sort of isn’t. One could argue it is the economic equivalent of a plain cheese sandwich on white bread when you were hoping for a Reuben.
However, the underlying data within the report was more akin to perhaps a, I don’t know, plain hot dog. A generic steamed wiener. Better than a plain cheese sandwich, but nowhere near as good as the aforementioned Reuben.
You see, line 32 on page 8 of 18 is something called ‘Final sales to private domestic purchasers.’ This strips out a lot of the noise in the report, and summarizes the true health of the private sector for the quarter. For the fourth quarter of 2025, the BEA estimates it was, drum roll please, 1.9%. For all of 2025, it was 2.4%.
Now, we are perhaps getting into tuna salad on toasted white bread territory. The solid white albacore variety, not that ‘chunk light’ stuff. Still, this is a pretty standard, and somewhat boring, lunch, and nowhere near, again, said Reuben.
So, government shutdowns? War in the Middle East? Artificial Intelligence taking over the world? Gold soaring to new heights? All of it. It sure seems exciting, doesn’t it? However, where the rubber meets the road, it all boils down to what amounts to be, at this time, the economic equivalent of a tuna salad sandwich.
Hey, the numbers are what the numbers are, and they aren’t really all that exciting.
Thank you for your continued support. As always, I hope this newsletter finds you and your family well. May your blessings outweigh your sorrows on this and every day. Also, please be sure to tune into our podcast, Trading Perspectives, which is available on every platform.
John Norris
Chief Economist
Please note, nothing in this newsletter should be considered or otherwise construed as an offer to buy or sell investment services or securities of any type. Any individual action you might take from reading this newsletter is at your own risk. My opinion, as well as those of our Investment Committee, is subject to change without notice. Finally, the opinions expressed herein are not necessarily those of the rest of the associates and/or shareholders of Oakworth Capital Bank or the official position of the company itself.
Sources:
The World Bank – GDP (Current US$) – Iran, Islamic Rep.
The World Bank – GDP (Current US$) – United States
Wikipedia – List of Countries and Dependencies by Population
Source: Bloomberg Financial
Bureau of Economic Analysis – GDP (Second Estimate), 4th Quarter and Year 2025 – March 13, 2026
Please note, nothing in this newsletter should be considered or otherwise construed as an offer to buy or sell investment services or securities of any type. Any individual action you might take from reading this newsletter is at your own risk. The opinions expressed herein are not necessarily those of the rest of the associates and/or shareholders of Oakworth Capital Bank or the official position of the company itself.
Opinions and forward-looking statements are subject to change without notice and may not come to pass. Past performance is not indicative of future results. References to market indices are for illustrative purposes only. Index performance does not reflect the deduction of fees or expenses, and individuals cannot invest directly in an index.
Political and geopolitical events are referenced for general context and do not represent a recommendation or prediction regarding any specific investment outcome.
Advisory Services, including investment management and financial planning, are offered through Oakworth Asset Management LLC a registered investment advisor and is owned by Oakworth Capital Bank, Member FDIC. Investment products and services offered via Oakworth Asset Management LLC are independent of the products and services offered by Oakworth Capital Bank, and are not FDIC insured, may lose value, have no bank guarantee, and are not insured by any federal or state government agency. Because of the ownership relationship and involvement by Oakworth Asset Management LLC associates with Oakworth Capital Bank, there exists a conflict of interest to the extent that either party recommends the services of the other. Oakworth Asset Management LLC does not provide tax or legal advice. You should consult your tax advisor, accountant, and/or attorney before making any decisions with tax or legal implications. For additional information about Oakworth Asset Management LLC, including its services and fees, visit advisorinfo.sec.gov.