RT The Kobeissi Letter (@KobeissiLetter)Asia is the most exposed region to a shortage of LNG:~85% of LNG transiting the Strait of Hormuz is destined for Asia, with limited rerouting options.Korea, Thailand, and Taiwan are running LNG trade deficits of -1.5% of GDP, meaning they are the most vulnerable to shortages.Japan, the world's 2nd-largest LNG importer, is also deeply exposed at -1.0% of GDP.China is the biggest importer in volume terms, but its deficit as a % of GDP is almost flat due to the size of i ...

Group 1 - The S&P 500 experienced a decline of over 2%, reaching its lowest level in more than two months, erasing all gains for 2026 and sitting approximately 4% below its late-January record [1] - The Dow dropped about 1,084 points, while the Nasdaq fell approximately 2%, indicating a risk-off sentiment in the market [1] - Oil and natural gas prices are rising due to concerns about the Middle East conflict affecting global energy supply, leading to fears of prolonged inflation [2] Group 2 - The increase in energy risk has led investors to reassess assets that rely on lower inflation and easier monetary policy, with the 10-year Treasury yield rising and expectations for a Federal Reserve rate cut shifting from July to September [3] - The volatility gauge reached a three-month high, indicating heightened market uncertainty and a renewed focus on hedging strategies [3] - Travel-related stocks were negatively impacted as crude prices increased, while miners and small-cap stocks also faced declines due to tighter margins and refinancing risks [4] Group 3 - In Europe, the cost of default insurance rose significantly, with the iTraxx Crossover index for junk bonds increasing to about 270 basis points and the iTraxx Main for investment-grade bonds rising to about 57 basis points [5] - In the U.S., Blackstone's private credit fund, BCRED, experienced $3.7 billion in withdrawals during the quarter, leading to an increase in its redemption cap and the infusion of $400 million in employee capital to meet redemption requests [6] Group 4 - The overall market narrative has shifted from a simple decline in the S&P 500 to a broader reassessment of energy risk and its implications for monetary policy, prompting questions about the current cost of these risks [7]