The Dividend Cafe - Monday - March 9, 2026

Episode Date: March 9, 2026

Today's Post - https://bahnsen.co/4lfOy1s The episode reviews continued heightened, two-way intraday market volatility tied to the Iran military operation, highlighted by a Dow swing from sharply down to closing up over 200 points and oil’s brief spike near $115 before falling back to about $83–$84 after comments that the war may be nearly over. David argues these violent moves reflect short-term trading, hedging, and speculation, and advises long-term investors to avoid reacting. He notes the 10-year yield fell to about 4.1%, technology led while financials lagged, and last week’s index declines were modest despite some weak breadth. He discusses oil and VIX backwardation, shipping/insurance uncertainties in the Strait, debate over targeting Iranian oil infrastructure, and risks of bad policy if oil rises. Bahnsen also cites a “horrific” jobs report with unemployment at 4.4% and significant job losses and revisions, and previews CPI Wednesday. 00:00 Volatility Backdrop 00:54 Wild Market Reversal 01:47 Oil Spike Explained 04:10 Ignore The Noise 04:31 Rates Sectors Breadth 06:18 Backwardation Signals 07:42 War Timeline Shipping 09:57 Policy Risks Oil 10:42 Jobs Report Shock 12:33 Energy CPI Outlook 13:35 Wrap Up Stand Pat Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

Welcome to the Dividing Cafe, weekly market commentary focused on dividends in your portfolio and dividends in your understanding of economic life. Well, hello and welcome to the Monday Dividend Cafe where we are continuing to live in the exact same environment that we found ourselves last week that I talked about in the Friday Dividend Cafe. Let me start with that. The Friday Dividendon Cafe did a deeper dive into other. investment considerations of this current military operation in Iran. The major takeaway, I really would prefer you go to the Friday Dividing Cafe to get more meat on the bone, but essentially suggesting that this idea of high, elevated, exacerbated, intraday volatility is the most likely scenario for the time being. I don't see it going away anytime soon, and I don't care

about it at all. And it cuts both ways. And it's going on every day. day. And it reflects all kinds of horrifically bad trading habits. So what happened is the futures last night were down about 1,000 points. At around 4 a.m. this morning Eastern, they were down 700. They got as low as only down 400. The market opened down 500. We went down nearly a thousand points, and then we closed up over 200 points. You had this 1,200 point. You had this 1,200 point. intraday gap between the bottom and the top and the top being very near the closing price of the day. So that same trend played out, although it could have been in the opposite direction with the peak coming earlier in the day and the trough coming later in the day, but most often it was this

back and forth teeter totter. And it really more or less happened every day last week. There was one day that was a little less volatile than others. The other piece to it today, though, was in the oil prices itself, where, you know, I mentioned on Friday that WTI last week, the day after the weekend's war activities on the Monday was only up five, five and a half percent, which was child's play in the grand scheme of things. And then by Thursday night, when I was speaking to a dinner of clients in Nashville, I said, oh, we were up 17 percent. That's starting to get a little more real. And then by being up 9.5% on Friday, it meant we were up 31% in the week. And I'll let you guys figure out the math is how 17 and 9 gets to 31 because I don't have time to do it right now. But I'm not wrong.

So then you end the week up 31% in oil. And that's a major issue. It has economic repercussions and certainly market ramifications. Then all of a sudden it skyrocketed higher as the oil futures opened last night. And that was putting downward pressure on the equity. market futures. We actually hit $115 a barrel today at one point. And then as I'm sitting here now, we're at $83 or $84. What caused equity markets to reverse to the upside, what caused oil prices to reverse to the downside, because it is one and the same in terms of that inverse correlation right now.

The president apparently made comments to a CBS reporter that he thought the war was almost over. And whether or not that's true, what he meant by it, what the whole repercussions around it, the markets, traders are so afraid of getting caught off sides of this stuff that there is just massive, violent reactions, both directions. And this is the dumbest thing I see. Overreaction in each direction, people are trying to game this stuff, not wanting to be. caught off sides. There's hedging activity. There's unhedging. There's most certainly speculative activity. And no sane investor has any place getting in front of this stuff whatsoever. Obviously, $83 oil is a lot better for the U.S. economy and therefore market prices than $115 oil. But the 115 itself didn't seem to make a ton of sense and it did not last long.

And when I said it didn't last long, it's possible it lasted for something in the range of three seconds. So what else do we want to comment on today besides this heightened volatility being the major theme? And for all I know, we open up, 500 points tomorrow. We open down 1,000 points. We do both in the same day again, which has been the bigger trend. I have no idea, and neither do you, nor should you care. Just, well, okay, on the market side, then 10-year bond yield, actually treasuries were up a little bit today. The 10-year was down to 2.5 base.

this points, 4.1%. Top performing sector today was technology, up 1.8. But financials are one of the only sectors that still closed in the red. It was down about half of a percent. But, you know, I want to point out that last week with the overall downside market volatility, the S&P was down 2%, the Dow was down 3% on the week. That isn't very much. And 38% – I want to mean – wait, wait, I want to get this right.

Yeah, 38% of stock. or we're at 20-day lows. So two things can be said about that. That isn't a lot for a major market sell-off. And you could say, well, that's the half-full part. Okay, the glass is half-full. But then the glass is half-empty is, well, there's a lot more worse it can get, you know,

a lot worse that you get from here. So both things are true when people are looking at these stupid short-term indicators. But I would point out that the breadth in Friday, in Thursday's sell-off was three days. decliners for every one advanceer. Let's, yeah, and three and a half decliners for every one advanceer on Friday. Three, three and a half to one downside breadth. That is really not that bad at all. You have real significant down days sometimes eight to one, nine to one, ten to one, decliners to advanceers. So the breath was very limited. All of this can get worse, but none of it

has really been all that bad. All of it is acting just like you would expect in terms of short term paranoia, fear, uncertainty, all that type of stuff that exacerbates volatility. Okay, you know, I also talked, by the way, Friday about the backwardation of oil futures that on one hand we had spiked up to that $90 level today. It obviously went way higher than that, now back lower, but still into the 80s. But that's the front month curve. The front month contract for oil futures is at that level. And then when you go out nine months, it's coming all the way down into the 60s.

So you're paying a lot more for oil for 30 days than you are if you want to secure a price for nine months from now or 12 months for now. The VIX, which is the S&P 500 protection, it basically captures implied volatility. But the cost of buying puts on the S&P is also highly backwardated, where the protection for the next week and the next month is far higher than it is for two months, three months, six months, et cetera. So this all reflects short-term jitters, but again, at this time, almost no serious market actor. And I would add very, very few serious political prognosticators expecting this to draw out.

So last week and into the beginning of today that again, obviously, interrupted at the end of the market day, the downside concerns are all correlated. Every market analysts that I respect who I talked to over the weekend and interacted with and corresponded with, and there were quite a few, all believed that it is just as simply markets trying to assess exactly how long this may end up going on and that it may not, the realization that it wasn't going to be done in four days. But people trying to now price in that it might be four months, I think would be making a much bigger mistake. So that timing issue continues to be very important.

Obviously, a lot of the questions about the Strait of Hormuz. It's, you know, it's tricky to figure out about the shipping lanes reopening. On one hand, it does appear to me that the Iranian Navy really doesn't exist anymore. And they can certainly send more U.S. support to secure the straits and the ports for some, safe operation. But if insurance companies do not want to protect the ships and there is that heightened volatility around what to expect, I don't know that it gets immediately better. And this is not just an oil story, but a shipping of cargo goods as well. So we are watching the news on this front as well. But again, I think that it's more likely than not to stabilize.

One of the questions was like, are they going to take out Carg Island where 90% of Iranian oil exports go from? And increasingly, what I'm reading is that it's unlikely that the U.S. wants to fully take out Iranian oil infrastructure because they still hope that they end up with a friendly regime in when all said and done and want to have Iranian oil capacity available in the hands of a better actor and not radical actor. And so they would set their own cause back if they were to more severely take out the oil infrastructure side. I also rather that's a source of debate, dispute, disagreement between Bibi and President Trump, as far as U.S. and Israeli attention to that issue. But I don't know that that's true. But again, we'll continue to see where that goes. One of the benefits to oil not getting back up above 100 is it eliminates some of the temptation for policymakers to do some really dumb

things. To go release oil from the Strategic Petroleum Reserve, to talk about maybe banning oil exports, you know, to do any kind of price controls on oil itself, it's completely unnecessary. And in the 80s and even I would argue 90s, it's less tempting to go down a desperation path of bad policy with unintended consequences, with inviting of distortions. But when you start talking about $15 oil, policymakers can do some pretty crazy things. All right, I don't want to talk only about Iran and oil. The jobs report Friday could have been a number all of its own. A lot of the market downside on Friday was not just Iran, but was related to the horrific jobs report that came out Friday. Unemployment ticked up to 4.4%. I understand people are saying that we had a loss

the 92,000 jobs when we were expecting 55,000 gain. That's true. But there was also another 69,000 of downward revisions from the prior two months. So you really had a net decline of 161,000, which is a 220,000 delta from what had been expected. And to this idea of, well, okay, but we're just getting rid of these government jobs. No, the vast majority, 86,000 of 92,000 job losses. In fact, February were private sector. 12,000 were manufacturing jobs, which I think is 12 months in a row of downward negative numbers in manufacturing jobs. Then some will say, well, the civilian employment measurement has been different. And there have been months where one was bad and the other was good or one was good, the other was bad. But the civilian employment

measurement, which basically factors in small business formation, was down 185,000. So you really had just bad numbers all around. The only thing I can say, if I'm trying really hard to look at a glass being a quarter full, is there was a nurse's strike that has ended, that may have patted the downside numbers a bit, and that should reverse into next month. And then we know that there were definitely weather issues that would have affected retail and things like that, but the seasonal adjustments might have captured that. So we'll see what lies ahead. I'm going to have to Leave it there. I've gone on quite a bit on a lot of the Iran stuff. The oil prices will be the big factor this week. We'll continue watching all that. So let me leave it there. As I'm talking,

down 8% in oil at $83.50. So you're just seeing massive double digit percentage moves up and down. By the way, midstream energy was up 2% last week when the S&P was down 2%. But the real winners were downstream. The refineries were the big energy winners. Within midstream, LNG export, US in a very profitable, competitive, opportunistic position when LNG export capacity in the Middle East is offline. Ask TBG is posted on the homepage at dividendcafe.com. The CPI number for February comes out Wednesday, but does that really matter now when the numbers have all changed so much in commodity prices? Oil gets. ass aluminum just in the last four or five days here in March. The February number really is

obsolete before we've even gotten it. Okay, I am recording here in Miami. I've been in meetings all day long at a big conference here and speak at the conference tomorrow. Then I'm back in New York City and we're going to keep plugging away. Reach out with any questions you have. Just trust me that if you're a client of our firm, your advisor, would love to hear from you, talk you through any questions you have about what's going on myself and Brian our investment committee. I am very happy to engage on anything you have that you want to know as we go through this period. But I will tell you that the market and investment advice I have right now is to not just do something, but stand there. Have a wonderful Monday evening.

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