Oil Soars Past $100 a Barrel, Novo Nordisk & Hims Settle Feud

0:00public.com presents the rundown. Your daily market update in under 10 minutes. My name is Zadeh Admani and today is Monday, March 9th. In today's episode, we'll give you the latest on oil prices and why there's concerns about stagflation now. We'll also break down the surprise truths between Nova Nordisk and Hymns and why Oracle and OpenAI are scaling back plans for an AI data center in Texas. Then stick around to the end of the show for a wild stat about Pixar, a surprise cameo from my two-year-old son. We got a great show for you today. Let's go. Markets are coming off the worst week of the year. The S&P 500 fell 2% last week, while the NASDAQ fell by 1.2%. The Dow took the biggest hit by far, dropping 3%, but nobody cares about the Dow. Every sector was in the negative last week, except for energy, and that's because oil prices are surging right now. There are two main benchmarks

1:01that investors use to track oil prices. There's Brent Crude, which is the global benchmark for oil traded internationally, and then there's West Texas Intermediate, or WTI, which is the benchmark for oil produced and traded in the US. Both of these benchmarks were up around 30% last week, which was the largest weekly gain since 1983. And as of this morning, oil is trading north of $100 a barrel for the first time since 2022. In fact, there was a point over the weekend that WTI spiked to $120 a barrel before pulling back a bit. The market is clearly worried about a supply disruption in the Middle East, since the war broke out with Iran a few days ago. Oil and natural gas facilities across the Middle East have been attacked. The biggest issue, though, is that traffic through the Strait of Hormuz has come to a standstill. You know, we've talked about the Strait of Hormuz a lot over the last week. It's a very important shipping channel that connects the oil-rich Gulf countries to the rest of the world. About 20% of the world's oil supply flows through it. And as of right now, tankers are refusing to pass through that Strait because they're afraid of being attacked by Iran.

2:02So that's caused a lot of these Gulf countries like Kuwait, Iraq, UAE, and others to stop production of oil because they're running out of room to store all the oil. And all of that is leading to an oil supply shock, which is why the price of oil is surging. If you want to learn more about the importance of the Strait of Hormuz and the impact on the global economy, go check out the deep guide that we did about it over the weekend. We've gotten some great feedback on it so far, so thank you to everyone that's listening to it already. Now, there is some potentially positive developments here. The G7 finance ministers are discussing a coordinated release from their strategic oil reserves to try and stabilize oil prices. On top of that, US Energy Secretary Chris Wright said over the weekend that these Strait of Hormuz could reopen the normal traffic soon. So we'll see if that materializes. But the longer this drags on, there will be growing concerns about inflation coming back. You know, energy is an input cost to everything in the economy. So higher oil prices means everything gets more expensive. But to make matters worse, the latest jobs report on Friday showed that the labor market lost 92,000 jobs in February. So we have a situation right now

3:03where there's a weakening labor market and surging energy prices at the same time, which could potentially lead to stack flation. You know, this really puts the Fed in a tough spot here. Normally they'd want to cut rates to support the economy, but they can't do that if inflation is spiking from oil prices. So we'll see what the Fed says. There's a Fed meeting next week. And then this week we're getting a CPI inflation report on Wednesday. Keep in mind though, this CPI data is for the month of February, so it won't include the impact of the surge in oil prices last week. But it's still worth watching and we'll recap the report for you later this week. So yeah, a lot going on right now. And I'll tell you one thing, though, nobody's talking about AI disruption and software anymore. Geopolitics and oil prices are dominating the market narrative. You know, it's a fast changing situation. We're staying on top of it. So make sure you guys are subscribed for the podcast if you haven't already and tune in every day to stay in the loop. Let's run through some headlines. Starting with some pharma drama. Nova Nortis has agreed to drop its patent infringement lawsuit against the telehealth company hymns and hers.

4:04And the two sides are now planning a new partnership that will allow hymns to sell Nova Nortis's blockbuster drugs ozempic and Wigavi directly through its platform. This comes just weeks at their Nova Nortis accused hymns of launching what they called a copycat version of the Wigavi pill and accusing the company of patent infringement. hymns was selling a generic form of the Wigavi pill for $49 undercutting Nova Nortis's pricing by about $100. But after legal threats from Nova Nortis and scrutiny from regulators, hymns quickly removed that product from its platform. Now, Nova Nortis said they reserved the right to bring back the lawsuit if needed. But for now, they're partnering with hymns and under this new agreement, hymns will stop advertising compound versions of these weight-loss drugs. And instead offer Nova Nortis's FDA approved medication through its telehealth marketplace. That news was a huge relief for hymns investors. The company's stock had already fallen more than 50% this year. But shares are surging today up more than 30% at the time of this recording. For Nova Nortis, this move also highlights how competitive

5:04the weight-loss drug market has become. Nova Nortis has been losing market share to rival Eli Lilly. So partnering with hymns could help Nova expand distribution and potentially reach more patients online. Nova stock is up around 1% this morning at the time of this recording. Let's shift gears and talk about another partnership. Oracle and OpenAI. According to reports, the two companies have ended plans to expand their flagship AI data center in Abilene, Texas. This is a pretty big deal because this site is part of the Stargate project, which was announced at the White House last year with President Trump, Softbank, and Oracle. The original plan was to expand the Texas facility from 1.2 gigawatts to about 2 gigawatts, essentially adding multiple new buildings filled with AI servers. But those plans fell apart due to financing issues and shifting infrastructure needs from OpenAI. Now, OpenAI says their broader deal with Oracle is still intact. The two sides agreed to a $300 billion deal to build 4.5 gigawatts of capacity. OpenAI says they're simply choosing to put that additional capacity

6:06in other locations, including Wisconsin, Michigan, and New Mexico. So I guess the key point here is that OpenAI isn't scaling back on infrastructure spending just yet. Also, Oracle is reporting earnings tomorrow after the close, so it'll be interesting to see what they have to say. The company has pretty much gone all in on AI, so investors are quick to react to any negative news. This stock has already lost about half its value since peaking back in September. So we'll break down those earnings later this week. Let's talk about some stocks making moves today. Four new companies are joining the S&P 500, which is causing their stock price to get a bump this morning. S&P announced that VIRTIVE, LUMENTEM, Coherent, and Echo Star will be added to the index on March 23rd as part of the quarterly rebalancing. Three of those four companies are tied to the AI boom. VIRTIVE builds data center infrastructure, LUMENTEM and Coherent make optimal network components, and those two actually got a boost last week after Nvidia announced a $2 billion investment in both those companies. As for Echo Star, they're the outlier here. They're a TV and wireless provider operating brands

7:08like dish TV, sling TV, and boost mobile. So those four companies will be added to the S&P index, which means that every index fund that tracks the S&P 500 now has to go out and buy the shares of those companies, that creates a wave of automatic buying pressure, which is why all four stocks are up around two to three percent this morning at the time of this recording. The four companies that are being replaced in the S&P are Match Group, Molina Healthcare, Paycom Software, and Lamb Wedson, and those four stocks are down around two percent this morning. Another loser today are airline and crew stocks thanks to the surge in oil prices. The global JETF dropped nearly 11 percent last week. It's worse week in 11 months, and it's down another 3 percent this morning. See, when oil prices spike, airline profits usually take a hit. And investors are also starting to worry that higher ticket prices could eventually scare off travelers. And then to make things worse, airports are becoming nightmares again. The partial government shutdown means that TSA officers are working without paychecks, which is leading to staffing shortages, and that's why there are three to four hour long

8:08security lines with some airports. The hobby airport right here in Houston told travelers yesterday to arrive five hours before their flight. And all of this is happening right as spring break travel season kicks off. So if you're planning to fly anywhere anytime soon, you might want to pack some patience. Let's wrap the show with the fun fact. Pixar just had its biggest opening weekend for an original movie in nearly a decade. Pixar's newest animated movie, Hoppers, made $46 million in the U.S. and roughly $42 million overseas for a global total of $88 million. That's Pixar's biggest opening weekend for an original movie since Coco back in 2017. Great movie, by the way. You know, I grew up watching Pixar movies and now I have two young kids, one of which is actually taking into interrupting my recording right here. Welcome to the show, buddy. Well, we'll keep that in. My kids heard Pixar and they just came running in. I gotta say that the recent Pixar movies haven't been so great. Last year's LEO only made like $20 million

9:09on its opening weekend and was a box office disaster. I never ended up watching it actually. Hoppers has gotten pretty good reviews, though, so I'll probably take my kids during spring break to watch it. If you guys saw Hoppers over the weekend, let me know what you guys thought in the comments. Well, all right. Guys, that's the rundown for today. Hope you guys enjoyed today's episode. If you did and you have like five extra seconds, consider giving us a five-star rating on Apple's Spotify YouTube, wherever you listen to your podcast. And if you are listening on Spotify, don't forget to vote in today's Spotify poll. Leave us a comment on Spotify. All that engagement really does help us out and it helps other people find the show. Thank you guys so much for listening, watching and commenting, shout out to Mike and Connor for all the work behind the scenes. And we'll see you guys back here tomorrow.