March 16, 2026
If you’re preparing for investment banking interviews, this is the kind of market setup where you can separate yourself from candidates who only memorize valuation formulas.
The big picture is messy: geopolitical risk is pushing oil higher, inflation is staying sticky, central banks are hesitating, and equities are selling off. But the more useful recruiting angle is what this does to corporate finance decisions. Companies still need to raise capital, acquire assets, manage regulatory risk, and choose between cash, stock, and debt. That’s where the interview material is.
Two M&A stories stand out: the proposed TikTok U.S. deal with a highly unusual government fee, and Public Storage’s all-stock acquisition of National Storage Affiliates. Add Novartis raising $11 billion of bonds to fund a biotech acquisition, and you’ve got a clean set of examples for discussing deal structure, financing, regulatory leverage, and strategic rationale.
The macro setup: oil shock, sticky inflation, and nervous equity markets
U.S. equities had a rough week as investors reacted to escalating conflict involving Iran, rising oil prices, and broader geopolitical risk. The S&P 500 was listed at 6,506.48, down 1.51%. The Nasdaq fell 2.01%, the Dow dropped 0.96%, and the Russell 2000 declined 2.26%. International markets were weaker too, with the FTSE 100 down 1.44% and the Nikkei 225 down 3.38%.
That’s not just market color. In an interview, you can connect this to risk appetite. When volatility rises and investors move toward safer assets, equity financing becomes harder, valuation conversations get tougher, and boards become more careful about large transactions.
Oil is the most important driver here. WTI crude was shown at $98.09, up 2.66%, and oil prices were described as having risen sharply since the conflict began. Attacks near the Strait of Hormuz and on energy facilities in the Gulf raised concerns about global supply disruption. That matters because higher oil can hit the economy in two directions at once: it can slow growth while keeping inflation elevated.
That’s the stagflation-style concern candidates should understand. It’s not enough to say “oil up, stocks down.” The stronger answer is: higher energy prices can pressure margins, weaken consumers, complicate central bank policy, and increase uncertainty around discount rates.
Rates are becoming harder to call
The Federal Reserve held the benchmark federal funds rate at 3.50% to 3.75%, with an 11-1 vote. That decision sits at the center of the market’s problem. Slowing growth and a softer labor market would normally support rate cuts, but sticky inflation and higher oil prices make that path less obvious.
The inflation data didn’t help. Wholesale prices rose 0.7% in February versus expectations of 0.3%. The producer price index increased 3.4% year over year, the highest since February 2025. Services costs rose 0.5%, portfolio management fees rose 1%, securities brokerage services increased 4.2%, goods prices rose 1.1%, food was up 2.4%, energy was up 2.3%, and fresh and dry vegetables surged 48.9%.
For banking interviews, the most useful point is that services inflation is harder to dismiss. Goods inflation can sometimes be blamed on tariffs or supply-chain disruptions. Services inflation tends to be more tied to wages, pricing power, and domestic demand. That makes the Fed’s job harder.
Markets pushed expectations for the next rate cut to at least December. That’s a helpful sentence to use in interviews because it connects data to market pricing. You’re not just reciting inflation numbers; you’re explaining why the cost of capital may stay higher for longer.
Why Europe and emerging markets are especially exposed
European economies are particularly exposed because they rely heavily on imported energy. Natural gas prices were described as nearly doubling since the conflict began. Central banks across Europe, including the Bank of England, have held rates steady for now, but the tone has shifted. Markets moved from expecting cuts to pricing potential hikes in some cases.
That dynamic also helps explain the trade idea of being long CAD/EUR. Canada benefits from higher energy prices as an exporter, while the eurozone faces the opposite pressure as a net importer. If Brent were to break materially higher, Canada’s terms of trade and fiscal position could improve, while Europe would face weaker growth and higher inflation. That’s a clean macro divergence.
Emerging markets are showing the same stress. Brazil’s Treasury intervened in the bond market for a second straight day, with operations totaling around 43.7 billion reais, or roughly $8.4 billion, over two days. The intervention came after Brazilian interest-rate futures rose more than 40 basis points as the Iran conflict rattled global markets. Analysts who had expected a 50 basis point cut shifted toward expecting only 25 basis points, if anything, with Brazil’s benchmark rate at 15%.
Taiwan is another useful example. One-year interest-rate swaps rose to a record high, reflecting growing expectations that the central bank could raise rates within the next 12 months. The logic is straightforward: Taiwan imports energy, oil prices are rising, and the currency’s nominal effective exchange rate has fallen nearly 9% from its 2025 high. Headline inflation rose to 1.75% in February from 0.69% in the prior month. Even with a strong economy and a GDP growth forecast upgraded to 7.71%, inflation risk is complicating policy.
TikTok shows how regulatory leverage can reshape deal economics
The most unusual M&A story is the TikTok U.S. transaction. Investors aligned with the administration took control of TikTok’s U.S. business from ByteDance, and the U.S. government is set to receive a $10 billion fee from investors as compensation for allowing the app to continue operating in the United States.
That is not a normal transaction fee. It’s the point.
Notable investors include Oracle, Silver Lake, and Abu Dhabi’s MGX. Initial investment in January exceeded $2.5 billion, with additional payments expected until the $10 billion threshold is reached. The new TikTok entity has been described with a $14 billion valuation, while ByteDance will still share profits, license its algorithm to the new venture, and retain close to a 20% ownership stake.
This is a great interview example because it raises several banking questions at once:
- Control versus economics: Who controls the U.S. operations, and who still participates in upside?
- Regulatory approval as value: How much value is being paid simply to keep operating in a restricted market?
- Governance: How do you structure decision-making when the seller keeps an ownership stake and licenses core technology?
- Fee comparison: Investment banks typically earn less than 1% of deal value in advisory fees, while this government fee is far larger than a normal advisory fee framework.
A useful comparison: Bank of America was expected to earn about $130 million for advising Norfolk Southern on its $71.5 billion sale to Union Pacific, one of the largest single-bank advisory fees on record. That contrast makes the TikTok fee look even more unusual.
Public Storage’s all-stock deal is a cleaner corporate finance case
Public Storage agreed to acquire National Storage Affiliates Trust in an all-stock transaction valued at approximately $10.5 billion. This is exactly the kind of deal you should be able to explain in an interview without overcomplicating it.
The strategic rationale is scale. Public Storage expands its already dominant U.S. self-storage position, adds hundreds of properties, and increases its presence in key regions. The broader sector backdrop is also important: REITs are operating in an environment shaped by higher rates and shifting property valuations.
The stock consideration matters. By using stock instead of cash, Public Storage preserves liquidity while still pursuing growth. It also shares some transaction risk with National Storage Affiliates shareholders. If you’re asked why a buyer would use stock, this is a good example: preserve cash, manage leverage, and use equity as acquisition currency when strategic scale is the priority.
Shares of National Storage Affiliates surged after the announcement, suggesting investors viewed the transaction favorably. Analysts also framed the deal as part of a broader consolidation trend, where larger players seek scale and efficiency.
Novartis shows how acquisition financing works in real life
Novartis is raising approximately $11 billion through an investment-grade bond sale to help fund its $12 billion acquisition of Avidity Biosciences. The target brings an RNA therapeutics platform focused on delivering treatments directly to muscle tissue, along with late-stage drug candidates for rare neuromuscular diseases.
This is a strong capital markets example. Novartis initially used a bridge loan to finance the acquisition, then issued bonds across multiple maturities to repay that bridge. That’s exactly how large acquisition financing often works: secure certainty of funds upfront, close the deal, and then term out the financing in the bond market.
For interview purposes, don’t just say “Novartis raised debt.” Say the bond issuance supports a strategic pipeline acquisition while replacing temporary bridge financing with longer-term capital. That sounds much more like a banker.
Two trade ideas worth understanding, not copying
The two trade ideas are useful because they summarize the macro debate.
First, long CAD/EUR reflects the split between energy exporters and importers. Canada benefits from higher oil prices, while the eurozone faces weaker growth and imported inflation. If the Strait of Hormuz remained closed and Brent moved toward $150 per barrel, that divergence could become more pronounced.
Second, long TLT, the iShares 20+ Year Treasury Bond ETF, is a duration view. The Fed is holding short-term rates high because inflation is still a concern, but long-duration Treasuries could rally if inflation softens, the Fed eventually cuts, or the Middle East conflict de-escalates. The risk is obvious: if inflation re-accelerates, the Fed may stay restrictive longer and pressure the long end.
That’s the level of balance you want in interviews. Every trade has a catalyst and a risk.
How I’d use this in an interview
If you get asked what’s going on in markets, don’t try to cover everything. Pick one clean theme:
“The main issue is that the oil shock is making the rate path harder to predict. Higher energy prices are inflationary, but they can also slow growth. That creates a tough setup for central banks and affects deal financing, equity valuations, and cross-border currency moves.”
If you get asked for a recent deal, use one of these:
- TikTok: Best for regulatory risk, governance, and unusual fee economics.
- Public Storage and National Storage Affiliates: Best for stock consideration, REIT consolidation, and scale.
- Novartis and Avidity: Best for acquisition financing, bridge loans, bond issuance, and pharma pipeline strategy.
The best candidates don’t just know that deals happened. They can explain why the structure made sense given the market backdrop. Right now, that backdrop is higher oil, sticky inflation, patient central banks, and a cost of capital that still matters.