Markets space out

0:00Today, oil prices are back up as President Trump dashes hopes for an immediate end to the Iran War. Plus markets turn cautious ahead of a long holiday weekend with US jobs numbers due. And as NASA heads back to the moon, Elon Musk's SpaceX files for the biggest IPO in history. This is Reuters Morning Bid bringing you unfiltered market news and analysis straight from the Reuters newsroom seven days a week. I'm Mike Dolan London. Peter Devlin. It's Thursday, April 2nd. So Mike, five weeks of conflict and President Trump finally tried to sell his Iran War to the American public last night in a highly anticipated address. And let's say to a skeptical audience of markets and traders. But let's look at the comments. He did say that the war was near completion. But really in face value, there was no really a new emigrants or details. He said that the aggressive actions would continue for the next two to three weeks, as well as I said, that there's no real clear exit timeline. It seems a bit of a prime time disappointment for markets, doesn't it?

1:02Yeah, I think the honest kind of appraisal is that there was really nothing new. And not least because the president had been doing interviews and social media posting for the previous 24, 48 hours and pretty much everything he'd already said was in the speech. And there had been some speculation that the address was scheduled to make a fresh announcement for the first time. Some of the speculation had been around a possible cessation of hostilities. Or indeed, some of the things he'd been saying earlier in the day, which was that the US was considering leaving NATO. But neither of those came up. And he talked about another two to three weeks of the conflict before it winds down. So that leaves markets that were kind of thinking the beginning of the end as we were talking about yesterday, thinking two, three weeks a lot can happen in two or three weeks. And if you remember, he was talking at the outset about this being over by Easter and we're at Easter and there's some way to go.

2:03So it is a timeline. One of the questions that people raises the fact that the US may well decide in two or three weeks times that its role in it, but has Israel agreed? There was no mention in that announcement last night as to whether Israel was on board with what Washington was deciding or that timeline that he put out. So there are questions, more questions than answers. I think what people are now looking at though is of course how the economy has responded. We know how the energy markets have. It's been a big fracture in the head of the IEA told us yet again yesterday that the damage to the oil infrastructure is worse than the 1970s and the Ukraine invasion damage put together. So that outages is really very severe to what extent is that already hitting the economy is now a big question. And of course, the early numbers suggest that it's actually not been quite the shock, not yet at least, that the energy market might suggest. Well, another shock might be coming from the non-farm payrolls numbers tomorrow.

3:07As not forget, even though the market is closed and let's look at some evidence, we saw the ADP private numbers coming in this week. And just another month of maybe stable labor market, 62,000 with was similar to the prior month at another bait showing another low fire, low higher environment. Are we going to really see some similar evidence in the job numbers tomorrow? Well, as you mentioned, the ADP number from the private sector suggests that it was reasonably good, but certainly better than expected in March. So it's not clear whether that automatically maps on to the national payroll count. We always have this debate every month. But it certainly doesn't appear that the labor market was severely hit in March. But of course, if there was economic damage, the labor market tends to be hit with a lag. It wouldn't be the first thing to see. But you'd first see is kind of real big damage to new orders and business orders and business

4:09sentiment generally. And of course, that's interesting because we got the manufacturing numbers. A sector you'd think would be instantly impacted by high energy prices. And the ISM survey showed that actually investments or factory sentiment went up in March. As did US consumer confidence. So the early readings at least suggest that there was a fair degree of resilience now. Maybe that is because there was an assumption that this wouldn't last this long. So that's where time is everything. Well, Mike, let's finish up and look to the stars for a final topic. And as NASA hits back to the moon for the first time in over 50 years, SpaceX as well is reportedly filed for IPO. And this is Elon Musk's satellite and rocket company. And reports are expected about a 75 billion dollars raised. He's expected with evaluation of 1.75 trillion. But I think the bigger question is, is this a test for the markets? Most would say the traders want to bury their head in the sun with all this volatility. Yeah. I mean, it's a moment, it's a moment we've been waiting for a long time, not a speculation.

5:13The valuation, as you say, 1.7 trillion, certainly it would be in terms of number of shares. Solled would be the biggest in history, bigger than the not 2019 Saudi Aramco IPO. How does it affect the overall market? Well, the IPO market hasn't been great in recent years. So maybe this gives it a shot in the arm, but at least it's good to see rockets flying for reasons other than we have for most of March. And against the backdrop of the of the NASA launch overnight, there's a different focus in the market at least. One interesting point, of course, is another report that's going through the ranzes that Amazon is in talks to buy global star, which is a satellite company as well, that has for nine billion. So you can see that there is competition. The biggest business SpaceX has is its starlink business. So there will be lots of interest beyond just the IPO in terms of that race for space.

6:19Well, space is a big business and why not shoot for the moon. For today's recommended read, check out Myse Column on how the early economic readings for March show less of a shock than the energy market suggests. The link is in the show notes. And for more of any of today's stories, head to roiders.com or the Reuters app. Follow us on your favorite podcast player or if you're on a smart speaker, just ask for the latest market news from Reuters seven days a week. We'll be back tomorrow.