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- [00:01]
Luke Vargas
Every day, the people of Meta work
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Anat Pellet
to protect over 3 billion users around the world.
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Abhishek
It's more than just a job for me because I so deeply believe in the outcomes here that I'm trying to drive. I am Abhishek and I work on risk and compliance at Meta. It's top of mind for me as a parent, what that experience will look like for my own kids. You want to get these decisions right,
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Luke Vargas
get the facts at Meta, me risk. European gas prices surge more than 20% after Iran strikes the world's largest LNG plant. Plus, Israel digs in for a protracted fight in Lebanon.
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Anat Pellet
It definitely raises the stakes. Another large scale Israeli military operation in Lebanon could lead the country to spiral into civil conflict at a sensitive time.
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Luke Vargas
And US Shoppers hunt for bargains in a boost for discount retailers. It's Thursday, March 19th. I'm Luke Vargas for the Wall Journal and here is the AM edition of what's news, the top headlines and business stories moving your world today. Iran is dialing up its attacks on Gulf energy facilities a day after Israel struck a vital Iranian gas field. Qatar is reporting extensive damage to a major gas hub. Kuwait says that two of its refineries are ablaze after drone attacks. And a Saudi official says that a refinery outside of the capital Riyadh was hit by a ballistic missile late yesterday, generating a massive fireball following the attacks. Brent crude futures are sitting north of $116 a barrel this morning, an 8% jump. US gasoline prices have climbed a further 4 cents overnight, according to AAA. And European natural gas prices have surged more than 20% as traders assess that the Iran war has entered a new and even more volatile phase. Editor Peter Landers has been overseeing the Journal's Iran Live blog overnight from Singapore. Peter, I think we suspected yesterday the Israeli attack on Iran's South Pars gas field was gonna trigger some sort of major reaction. And boy, we have now seen that and we've even heard from President Trump overnight now warning on social media that while he doesn't want to do it, he would just blow up that Iranian gas field if they dared to attack Qatar again.
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Peter Landers
That's right. This is a new stage of the war where core energy facilities on both sides are being attacked. It's definitely the question going forward, is there going to be a cycle of escalation where each one attacks even more facilities on the other side? And I think what the real gist of President Trump's message was that he does not want to see that cycle of escalation. He's saying he did not know about the Israeli attack ahead of time. Some Wall Street Journal reporting suggests that he did know and that Israel did tell the US that this was coming. But whatever he might have known or not known, he's saying let's, let's hold it back now. We don't expect further Israeli attacks on those Iranian facilities. And he expects that Iran will likewise hold back from repeating what it did to Qatar.
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Luke Vargas
Well, I already highlighted, Peter, some of the commodity price movement that the fighting yesterday and overnight has triggered. But, you know, and this is certainly relevant in Asian markets. This is cropping up in equities now, too, right?
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Peter Landers
Japan's Nikkei Average is down sharply again today and we've seen markets in places like Japan and South Korea really jive rate over the last couple of weeks as the war develops because these Asian economies are so dependent on oil and gas imports from the Middle east from places like Qatar, the natural gas field there. You already see production, for example, of ethylene in Japan being curtailed because some of the feedstock is less available or is so costly that they can't reasonably manufacture some of these chemical products.
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Luke Vargas
And Peter, there are similar pressures in Europe, right. With it looking all but certain now that these two continents are going to be basically bidding against each other for potentially limited energy supplies in the months to come.
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Peter Landers
That's right. They're both importers and they both, as you said, need to compete for these supplies. The price is going to go up. I think there'll be pressure for conservation in both continents. Already we've seen some, especially in some of the poor countries, governments urging people to use less electricity, turn off the heat, turn off the air conditioning, whatever it may be. And definitely they're trying to curtail consumption because the production for the time being doesn't seem likely to recover.
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Luke Vargas
On the other hand, Peter, the US May still have a little bit more breathing room here. A new journal survey of economists out this morning shows that the US would need to see oil prices of $135 a barrel for several months in order for the risk of a recession to jump past 50%. And as we've seen with the US trying to get more oil onto global markets, be it from Venezuela or from Russia, thanks to eased sanctions, May there is some light at the supply side end of the tunnel here.
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Peter Landers
Right. The whole world is responding to the shortfall of shortfall of supply from the Middle east and Russia has to be a big beneficiary here. They may be able to sell more oil thanks to the US Loosening sanctions. And they'll be able to sell it, of course, for a much higher price than they were before and at less of a discount to the world price than they were previously able to do. And just in general, I think the reason that people aren't as worried as you might think about a recession in the US Is simply that the US Produces its own oil and its own natural gas. Yes, consumers are paying more at the pump, but producers that have big holdings in U.S. oil and gas fields, they stand to gain from this energy crisis. And they can perhaps export more to countries like Japan, South Korea, China and elsewhere.
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Luke Vargas
Before we go, Peter, you were based in Japan for a long time, and we are seeing that country's Prime Minister, Sanae Takeichi going to the White House today, a meeting that I expect she wants to be about a whole lot of issues. But that could boil down to what is Japan doing or not doing to help open up the Strait of Hormuz? This has become kind of a, you know, a litmus test about how much of an ally anyone is.
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Peter Landers
Right. She's really walking a delicate type rope when she meets President Trump. And the president himself has gone back and forth about whether he needs the help of allies to clear up the Strait of Hormuz. But if he does demand that Japan send, for example, minesweepers or other naval ships to the Strait of Hormuz to help clear the traffic, I think that puts Prime Minister Takaichi in a very difficult position because it's probably illegal under Japanese law for her to do that right now while the bullets are flying, while the missiles are flying. But I think she will also try to suggest to the president that under different circumstances, for example, if there is a ceasefire, that Japan is willing to cooperate. So she doesn't want to just say never or no help. Sorry. And I think it's a different attitude than we see from some of the European countries and Canada, which say we simply cannot trust Trump, we can't trust the United States anymore. We really are not at all enthusiastic about cooperating.
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Luke Vargas
Well, we'll be watching that White House meeting very closely. Peter Landers is the Journal's Asia business, finance and Economics editor, based in Singapore. Peter, thank you so much.
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Peter Landers
You bet.
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Luke Vargas
Meanwhile, Israeli strikes in Lebanon are continuing to escalate and now moving into the heart of the capital, Beirut. That was the sound of an airstrike that leveled a multi story apartment building yesterday. At the same time, in southern Lebanon, Israeli troops are going deeper into the country as part of a ground invasion launch. This week, Journal reporter Anat Pellet told me it's part of Israel's broadening campaign against Iran as it targets one of its most powerful regional allies, Hezbollah.
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Anat Pellet
The idea is to weaken Hezbollah and they're trying to also remove the threat from Israel's northern communities as they go in deeper. It definitely ra raises the stakes. Israel has faced difficulty stamping out groups like Hezbollah and Hamas. Another large scale Israeli military operation in Lebanon could lead the country to spiral into civil conflict at a sensitive time, as it did in the 1980s, revering into dangerous territory.
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Luke Vargas
Anat this week we have seen the leaders of Canada, France, Germany, Italy and the UK express concern over this fighting between Israel and Hezbollah, citing the risk of a protracted conflict that could have devastating humanitarian consequences. And we can already see some of those consequences.
- [08:46]
Anat Pellet
So we have almost a million people displaced from southern Lebanon, which is a very high number after Israel issued evacuation orders for all of southern Lebanon, and that is according to the UN and basically Lebanese leaders are now communicating their willingness to hold rare direct government level talks with Israel, according to officials from Lebanon and France, which would help mediate. But Israel really doesn't believe that the Lebanese government, the Lebanese army will be able to dismantle Hezbollah. So it has a U S backed army that's quite weak and it's long been outmatched by Hezbollah. It's made strides in dismantling Hezbollah infrastructure and seizing weapons in areas of the south, but little progress has been made in other areas and that makes it difficult because the Lebanese government has little to offer in negotiations.
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Luke Vargas
Lebanon's health ministry says that more than 950 people have been killed by Israeli strikes in the country since Hezbollah entered the wider Iran war by firing rockets at Israel. Coming up, we've got the rest of the day's markets and business news and look at what effect knowing Banksy's real name will have on the value of his art. That's after the break.
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Luke Vargas
In markets news. Shares of memory chip maker Micron are down off hours despite reporting a near tripling in Q2 sales compared to last year. With demand outpacing supply. High prices for memory and squeezed supply have been a hot topic of conversation across the tech sector as companies scramble to stay ahead in the AI race. Analysts are expecting memory shortages to persist through 2027. Meanwhile, shares of discount retailer Five Below surged off hours after it reported higher quarterly profit and sales, with customers flocking to its stores during the key holiday shopping period. While the results validate the company's simplified pricing structure and its marketing efforts geared at Gen Z, Gen Alpha and Millennial Moms, CFO David Sullivan voiced concern about the health of US Consumers.
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David Sullivan
We just don't think it gets easier from here. Whether it's the prices at the pump or this sticky inflation that seems to be hanging around, or a job market that is, that is somewhat sluggish, we think the environment here is going to continue to be challenging.
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Luke Vargas
And the bank of Japan held interest rates steady today, noting the possibility that higher energy costs may accelerate underlying inflation. The bank of England and European Central bank are expected to follow suit in the coming hours as the war upends their forecasts. Both are staring down a worrying mixture of weak, weaker growth and higher inflation in the coming months. Than they initially expected. And finally, one of the art world's greatest mysteries appears to have been solved again. The British street artist Banksy has built a career on anonymity. But a new Reuters investigation identifies the elusive street artist as Robin Gunningham, a man in his 50s from Bristol, England, who went to a top school. Reuters used court documents and police records to unmask Banksy, even though his name was revealed almost two decades ago in the British tabloids. But far from denting his mystique, WSJ reporter Kelly Crowe says that the art market is likely to respond positively to learning whose art is up for auction.
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Kelly Crowe
I was surprised to find that a lot of collectors and dealers I spoke with were thrilled to know a little bit more about him. Collectors like to know more than less, and markets reward clarity and stability over volatility. We know this in other marketplaces. It's fascinating that even in the realm of art, where people love a good story, they also kind of want to know who they're buying from. Even just knowing that, you know, it's a bloke from Bristol helps shore up some of that weariness. And they're predicting that Banksy's prices could get a little bump from this reveal.
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Luke Vargas
Reports have also noted that Banksy legally changed his name to the very common sounding David Jones, though that, too could earn him some street cred, given it was also the real name of one David Bowie. And that's it for what's news for this Thursday morning. Today's show was produced by Hattie Moyer. Our supervising producer was Daniel Bach and for the Wall Street Journal, I'm Luke Vargas. My real name, no pseudonyms. We will be back tonight with a new show.
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David Sullivan
Until then, thanks for listening.
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