MONDAY – March 9, 2026

Dear Valued Clients and Friends –

One of the major themes I laid out in Friday’s more exhaustive treatment of this “Iran moment” in markets is expected exacerbated intra-day volatility.  We most certainly got more of that today (with markets down nearly a thousand points only to close up over 200 points), and even saw it in oil (WTI briefly hit $115 but then sits below $87 as I type right now, meaning one very important thing – people are acting insane).

We will give all the latest in today’s Dividend Cafe.

Dividend Cafe on Friday looked more into the current military operation in Iran and what it means (and doesn’t mean) for investors.  The written version is here (my favorite), the video is here, and the podcast is here.

Off we go …

Market Action

• Market futures were down over a thousand points Sunday night.  European markets were down over 2% but closed down around 1.5%.  Dow futures were down 750 points when I woke up at 4 am ET, and by 6 am ET were only down 400 points.  The market opened down by more than 500 points this morning.  It stayed down throughout the day and then in the final 45 minutes of trading (see chart below) flew higher.  There was a 1,250 point spread between the low of the day and the high of the day, which, as was laid out in Dividend Cafe on Friday has been the predominant theme each and every day since the Iran operation began.
• The Dow closed up +240 points (+0.50%) with the S&P 500 up +0.83% and the Nasdaq up +1.38%

*CNBC, DJIA, March 9, 2026

• What caused the huge late-day reversal in markets?  Well, the President told CBS that “the war could be over very soon.”  He also shared that “he has someone” other than Khamenei “to lead the country.”  He also said he spoke with Vladimir Putin, and they each have ideas for ending this war.  I cannot comment on where these things will go next.  But I can tell you that those trading in, on, around, under, before, and after all of this stuff are getting their faces run over.
• The market drop on Friday was obviously part of the continued elevated volatility experienced each day last week in the aftermath of the military operation in Iran.  However, the jobs report on its own, without any Iran war activity, could have easily created the same market day.  More on the economic updates that matter below.
• It is worth noting that the advance-decline ratio was 1-to-3 on Thursday and 1-to-3.5 on Friday, which is certainly negative, but not even close to what you would think of as substantial breadth.  A 5-to-1 or much worse (8 or 9 to 1) of decliners-to-advancers is how you normally think of as a true “risk-off” day, and this market sell-off has seen remarkably tame breadth, so far.
• Even a statistic like “only 38% of stocks are at 20-day lows” indicates low breadth in the sell-off so far, but it also points to the fact that it could get a lot worse, too
• The ten-year bond yield closed today at 4.11%, down 2.3 basis points on the day
• Top-performing sector for the day: Technology (+1.80%)
• Bottom-performing sector for the day: Financials (-0.52%)
• I talked about the severe “backwardation” in the oil futures curve in Friday’s Dividend Cafe (how markets expect oil to be a LOT cheaper in 9-12 months than it is now).  I should mention that the VIX is just as backwardated, with short-term equity market protection substantially higher than the cost for equity market protection a month, three months, and six months out.

Iran Update

• Many of the market folks I spoke to over the weekend (significant research resources that yours truly dialogues with frequently) believe that the acceleration of market downside late last week versus early last week was nothing more and nothing less than the markets saying, “this is not ending as quickly as we thought.”
• It would appear the path the U.S. is taking to getting shipping lanes re-opened is to (a) Flat-out eliminate the existence of the Iranian navy, and (b) send enough U.S. carriers and support to secure the needed straits and ports necessary for safe operation.  This probably can’t happen immediately, but it seems to be the path policymakers have chosen.  If we see an oil tanker safely escorted through the Strait of Hormuz this week, I would consider that the beginning of the end of the closure of Hormuz shipping activity.
• We heard it last week, too, but the one theme I see coming up time and again in research is the U.S. seizure of Kharg Island, the source of over 90% of Iranian oil exports.
• Many news reports have presented the possibility that seeing an acceptable regime alternative in Iran will require ground troops, and for all I know, that could be correct.  But I still believe that the base case is that political considerations keep the President from going this route.
• That Mojtaba Khameini, the son of the recently killed Ayatollah Ali Khamenei, has been appointed the new “Supreme Leader” of Iran does not bode well for a new, non-confrontational posture.

Public Policy

• You could put this in the Oil & Energy section below but I really see this as a matter of Public Policy …  If, indeed, the $115 blip earlier today in WTI prices and a sustained price > $100 are off the table (as the violent retreat back to the low-80’s seems to be suggesting), we may be clear of some potential policy disasters that I suspect would be considered otherwise.  From price controls to a ban on exports to drawing from the SPR, all three are distortive abuses that are not remotely needed, and all three ideas should be fervently resisted.

Economic Front

• It is hard to capture how surprisingly bad the jobs data was on Friday.  Instead of an expected gain of 55,000 jobs in February, we saw a loss of 92,000 jobs.  As predicted previously, the prior gains announced for December and January were revised down by 69,000, as well (so a net decline of 161,000).  Private-sector payrolls were down 86,000 in February, countering the notion that the job losses are mostly governmental.  Manufacturing jobs were down by 12,000.  The unemployment rate went up to 4.4%.  The civilian employment measurement outside of BLS also saw a decline of 185,000.  There were a few lumpy things that may reverse next month (a nurse’s strike, weather conditions impacting retail), but I am stretching to find a bright side here.
• Retail sales declined -0.2% in January.  Excluding autos, sales were unchanged.  Weather had an impact, no doubt.

Federal Reserve

• The expected modifications to Basel Endgame and what it will mean for banks (versus what had been expected from roughly 2021-2024) is one of the major reasons the banks rallied so dramatically in 2025.  The more realistic and reasonable criteria for capital requirements were well received by markets, and Fed supervision changes have been a huge part of this favorable boost.  We know that banks are holding a lot of excess capital due to the 2023 proposal, and Morgan Stanley issued a report this morning expecting the final Basel Endgame to result in $175 billion of excess capital becoming “freed up.”  Credit assets are expected to receive the most relief (that is, how they are weighted in capital buffer requirements) when the final criteria are approved.

Oil and Energy

• WTI Crude was at $83.55 (down -8%) as of my deadline late today.  The $115 it hit earlier today may have been the most quickly reached peak and quickly abandoned peak in oil history.
• Midstream was up last week during the war-induced market volatility (+2% vs. S&P -2%), but refineries were the real winners in the energy complex last week (the downstream space).
• The midstream space that rallied hard was the LNG export subsector, as the need for U.S. exports increases substantially when Middle East supply is taken offline.

Ask TBG

On Deck

• The CPI for February comes out on Wednesday, but it will be completely obsolete by the time it comes out due to the commodity spikes we have seen since the military operation in Iran began.

I am sending this from Miami, FL, where I am in my fifth state in seven days and speaking at a very large industry conference tomorrow, before returning to NYC right after my talk.  Wheels are spinning, and there is a lot going on, but there is nothing, and I mean nothing, I want to do more than answer your questions.  And there is nothing our advisors ever want to do more than talk to our clients about why we are doing (or not doing) what we are doing (or not doing).  This is the end to which we work.

With regards,

David L. Bahnsen
Chief Investment Officer, Managing Partner

The Bahnsen Group
www.thebahnsengroup.com

The Dividend Cafe features research from S&P, Baird, Barclays, Goldman Sachs, and the IRN research platform of FactSet.