“A ship is safe in harbor, but that’s not what ships are for.”
-John A. Shedd
Here’s what you need to know this week:
- Stocks fall as the war in Iran intensifies
- Markets whipsaw on rapidly changing oil prices
Outbreak
Stocks moved lower last week as investors digested the implications of the sudden war in Iran. The S&P 500 fell nearly 2%, placing it in slightly negative territory for the year. Markets were also weighed down by the nonfarm payrolls (NFP) report for the month of February which showed the US labor market weakening more than expected:
The economy lost 92,000 jobs in February, much lower than the gain of 55,000 jobs that analysts expected. The report also showed unemployment ticking up to 4.4%[1].
Whiplash
This week has seen dramatic swings in both directions due to the rapidly shifting outlook in Iran. The price of oil rose steadily last week and exploded higher on Monday, reaching as high as $119.50 per barrel:
In response, stocks began Monday deep in the red. After all, higher oil prices means higher shipping costs plus the general uncertainty of a burgeoning war. However, President Trump told CBS News that he is considering “taking control” of the Strait of Hormuz and expects the war to be over soon, sparking a dramatic intraday reversal. As you can see on the chart above, oil plummeted from $119/bbl to $90/bbl within an hour[2]. Stocks similarly reversed, swinging from a 2%+ drop to a ~1% gain on the day.
These kinds of weeks are where returns are earned. It’s easy to talk about risk/reward when markets are lazily drifting upwards every week, but these fast and sharp drawdowns can scare investors into making mistakes. An investor who panic-sold the selloff would have missed the bounce back and locked in their loss. As of writing (Tuesday at noon) oil is hovering just below $80/bbl and the S&P 500 just broke into positive territory on the year; things may dramatically change again by the time you read this, but one thing that won’t change is that staying the course will continue to be the winning long-term strategy for investors.
What Else
- Peace negotiations between Russia and Ukraine have stalled as US foreign relations teams have turned their attention to the Iranian conflict
- Lebanon has asked the US for direct peace talks with Israel to end the fighting between the two countries
- AI firm Anthropic sued the Trump administration for deeming the company a “supply chain risk” after requesting guarantees that their AI would not be used to surveil American citizens
- NYPD have arrested a man suspected of throwing an explosive device at NYC mayor Zohran Mamdani’s home
- The March Madness bracket will be announced this Sunday, March 15th
What We’re Reading
As its name implies, Death Valley is one of the most inhospitable places on the planet. However, a recent burst of rainfall has given rise to the largest “superbloom” in the valley in more than a decade. Click below to see photos of the bloom and read what a superbloom potentially portends for summer:
What’s Happening Downtown
The Truck Yard is hosting a St. Patrick’s Day celebration this Saturday, March 14th. This event runs from 11:00 AM to midnight and will feature a lineup of live music, food trucks, green beer (of course) and outdoor activities. The celebration is open to all ages during the day and ages 21+ after 9:00 PM. Click below to learn more:
To read more from our blog, click here
Written by: Kane Ogle, CFP®
Steve Beck, Kane Ogle, CFP®, Amber Eduvigen, CFP®, Cale Olbert, CFP®, Brett Valentine, CFP®, Brandon Ingerson, Bill Daniel, Sam Postich, Jenni Hess
[1] Yahoo! Finance [2] CNBC