The Week in Charts (3/11/26)

View the video of this post here.

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The most important charts and themes in markets and investing…

1) A Record Oil Spike

Crude Oil Futures started trading in 1983. Last week’s 36% spike was the biggest weekly percentage increase that we’ve ever seen.

What caused the move?

A massive supply shock. Roughly 20% of global oil supply passes through the Strait of Hormuz, which was effectively closed to most commercial traffic after the start of the Iran war.

2) Markets Don’t Follow a Normal Distribution

The Crude Oil ETF ($USO) spiked 33% over the last week, the biggest weekly gain in its history.

This was a 6-sigma event, which (assuming a normal distribution) is only supposed to occur once every 4,039,906 years.

So we shouldn’t see another move like this until the year 4041932?

No. We’ll likely see one long before that.

Why? Because markets don’t follow a normal distribution – instead they are fat-tailed.

What does that mean? Extreme events (such as crashes or surges) occur much more frequently than what a bell curve predicts.

3) From a Tailwind to a Headwind

For most of the past three years, falling energy prices have been helping to push the US inflation rate (CPI) lower. But that tailwind will soon become a headwind, with prices of Oil and Gas spiking on a YoY basis.

Gas Prices in the US have moved up to $3.63 per gallon, an increase of over 70 cents since the lows in January to their highest level since June 2024.

The Fed was unlikely to cut rates next week before this spike higher, but now there’s less than a 1% chance of a rate cut at the March 18 meeting.

4) A Volatility Spike and the First 5% Correction of the Year

The $VIX increased 48% last week, the 21st biggest weekly spike ever.

What has happened in the past following the biggest $VIX spikes?

Stocks have tended to bounce back with above-average forward returns.

Does this always happen?

No. There are no certainties in markets, only probabilities.

At Monday’s low, the S&P 500 was down 5.2% from its January 28 peak, the 32nd pullback >5% since the March 2009 low.

How long will this correction last and how deep will the maximum drawdown be?

This is an impossible question to answer. It could end this week or go on for months or years. That high degree of uncertainty is the reason why stocks outperform bonds and cash in the long run. Without higher risk and more uncertainty there would be no higher reward.

5) Wars and Stock Market Returns

Investors are asking what typically happens in the stock market after the start of US military conflicts.

The answer: there is no typical outcome. Every single time is different.

And that should make sense because there are so many variables that influence the stock market and so many unknowns when it comes to wars.

Just a few of the many questions today:

• How long will the war last?
• Will it expand into a regional war?
• How long will the Strait of Hormuz be closed and what impact will that have on the price of oil/gas?
• Will the US send ground forces?
• Will Russia or China intervene?
• What is the endgame?
• What are the economic consequences?

None of the answers to these questions are known today.

The best we can say looking at military conflicts in the past is that with the passage of time the stock market has tended to rise, and the more time that has passed, the more it has risen.

That’s true for two reasons: a) all wars eventually come to an end, and b) the economy and earnings, even if impaired in the short run, still tend to grow in the long run in spite of these conflicts.

Which is to say that the world always looks chaotic in real-time and equity markets always look resilient with enough hindsight.

6) A Few Interesting Stats

a) The murder rate in the US moved down to 4 per 100k people in 2025, the lowest since at least 1900.

b) In 2020-2021, PayPal traded at 109x earnings and 17x sales. And this year, after a -87% drawdown? 7x earnings and 1x sales. There are so many lessons for investors here…

c) US National Debt as % of GDP…

• 1975: 33%
• 1985: 40%
• 1995: 65%
• 2005: 61%
• 2015: 101%
• 2025: 122%

d) US Federal Budget Deficit as a % of GDP…

• 1950s: -0.4%
• 1960s: -0.7%
• 1970s: -1.9%
• 1980s: -3.8%
• 1990s: -2.1%
• 2000s: -2.3%
• 2010s: -4.8%
• 2020s: -8.3%

And that’s it for this week. Thanks for reading!

Every week I do a video breaking down the most important charts and themes in markets and investing. Subscribe to our YouTube channel HERE for the latest content.

Disclaimer: All information provided is for educational purposes only and does not constitute investment, legal or tax advice, or an offer to buy or sell any security. Read our full disclosures here.

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