Latest / Markets with Megan: A Quick Financial Markets Update / Rattled Stocks? Rising Oil and Weak Jobs Report | S3 E126 | 03-06-26

Transcript

Rattled Stocks? Rising Oil and Weak Jobs Report | S3 E126 | 03-06-26 · Markets with Megan: A Quick Financial Markets Update

• 0:00
  Megan Horneman: Unfortunately, it's another ugly day in the equity markets.
• 0:03
  Megan Horneman: It's Friday, March the 6th, and this is Markets with Megan.
• 0:06
  Megan Horneman: If you like this podcast, subscribe, hit the alarm bell, share with your friends, family, or colleagues.
• 0:11
  Megan Horneman: We're here to do these podcasts so that we can break down the not only the economic data, but some of the things that are moving the markets on a regular basis.
• 0:19
  Megan Horneman: So today we want to start with a couple things.
• 0:22
  Megan Horneman: First is we got the February payroll report.
• 0:26
  Megan Horneman: This showed that the US economy actually lost 92,000 jobs in the month of February.
• 0:33
  Megan Horneman: We also saw the unemployment rate rise to 4.4%.
• 0:37
  Megan Horneman: And no one wants to see this type of data come across the screen, especially when we're in the middle of a war with Iran, as well as just regular volatility in the equity markets.
• 0:48
  Megan Horneman: So it is impacting risk sentiment today, and we're seeing markets down significantly.
• 0:54
  Megan Horneman: But let's break through this report and just highlight a couple things.
• 0:58
  Megan Horneman: First of all, the unemployment rate was up due primarily to the U-2 rate.
• 1:04
  Megan Horneman: This is a measure of those people that lost jobs during the month.
• 1:08
  Megan Horneman: That went from 2.05 to 2.12.
• 1:12
  Megan Horneman: So still relatively stable, but again, that did help boost up the unemployment rate.
• 1:18
  Megan Horneman: Now, on a positive note, let's look at this report as in the amount of disruptions that we had in the month of February.
• 1:26
  Megan Horneman: We saw a labor strike in Kaiser Permanente.
• 1:29
  Megan Horneman: So we did see the biggest drop in healthcare jobs in five years.
• 1:33
  Megan Horneman: We also had a lot of weather disruptions.
• 1:35
  Megan Horneman: So we saw a pretty sizable decrease in leisure and hospitality.
• 1:40
  Megan Horneman: And then don't forget, we're still shedding federal government jobs.
• 1:43
  Megan Horneman: So we did see that weakness there.
• 1:45
  Megan Horneman: So this is one month.
• 1:46
  Megan Horneman: We'll see if this noise that was related to weather and the labor strike, if that settles out when we get the March payroll report.
• 1:54
  Megan Horneman: But again, this is not something that the equity markets want to see on a day like today.
• 1:59
  Megan Horneman: Let's talk a little bit about what else is impacting the markets today.
• 2:03
  Megan Horneman: Um, Kuwait did say that they're probably gonna have to cut their energy production, not for any other reason except the fact that a lot of energy producers don't have a ton of storage out there.
• 2:14
  Megan Horneman: So when we're talking about the Strait of Hormuz, which we have highlighted is one of the biggest risks here being shut down or disrupted, the energy producers don't have anywhere to store it.
• 2:24
  Megan Horneman: So they just end up having to cut back on output.
• 2:26
  Megan Horneman: So we're seeing crude oil rise to the highest level we've seen since 2023.
• 2:31
  Megan Horneman: It's about$88.
• 2:32
  Megan Horneman: And then gasoline prices have also shot up to a two-year high at$3.32 for a regular gallon of gasoline.
• 2:40
  Megan Horneman: This is impacting not only treasure yields that are moving higher because people are worried about inflation and what this will do to inflation.
• 2:48
  Megan Horneman: Um, it's so it's not necessarily a risk sentiment flight to quality into treasuries.
• 2:53
  Megan Horneman: You're seeing some selling of even some of those, you know, risk, those risk, the risk-off type of uh investments like gold, for example.
• 3:01
  Megan Horneman: Um, that is up slightly today, but it's down about 8% from its 52-week high.
• 3:06
  Megan Horneman: We're seeing the impact in the equity market primarily in, again, all of the indices are down from their 52-week high.
• 3:14
  Megan Horneman: But the biggest impact we've seen here because of this ongoing rise in energy prices has been in the small and mid-cap stocks, but growth stocks as well are really leading that, not only in the large cap space, but in the small and mid-cap space as well.
• 3:29
  Megan Horneman: They're down almost 10% from their 52-week high.
• 3:32
  Megan Horneman: That's because interest rates are higher in these growth high PE type of sectors, they're getting hit.
• 3:38
  Megan Horneman: From an international perspective, we are seeing um the Euro stocks 50.
• 3:42
  Megan Horneman: That's down about 8% from its 52-week high.
• 3:44
  Megan Horneman: And then emerging markets are approaching that 8% decline as well.
• 3:48
  Megan Horneman: We have highlighted that these types of geopolitical events historically have offered buying opportunities.
• 3:54
  Megan Horneman: So we are aggressively looking where there might be some opportunity.
• 3:58
  Megan Horneman: We had come into this conflict with very high valuations, so nothing was really attractive.
• 4:04
  Megan Horneman: We are seeing some discounts here in things like small and mid-caps and then in emerging markets.
• 4:09
  Megan Horneman: So we're looking at this maybe being a buying opportunity.
• 4:13
  Megan Horneman: Um, we're patient though, as well.
• 4:15
  Megan Horneman: We don't want to overpay for anything because we don't necessarily know how long the war will continue, and we don't know what that impact will be on inflation.
• 4:23
  Megan Horneman: Um, even though the labor market report was weak today, I don't know that that brings the Fed to the table in March because of the fact that they already were worried about inflation and what we're seeing right now is inflationary.
• 4:35
  Megan Horneman: That's all we have today.
• 4:36
  Megan Horneman: If you want a history of our podcast, you go to marketswithmegan.fm.
• 4:39
  Megan Horneman: Thank you.