This Week in Review | US-Iran War, Employment Data, G20 Finance Ministers’ Meeting

Transcript

Hello and welcome to This Week in Review.

financial markets, and why they matter to investors like you. To stay up to date with our latest market insights, subscribe to our YouTube channel or visit FisherInvestments.com. Now, let's review what happened this week.

First, the recent US-Iran war escalation.

This week, tensions between the US and Iran flared once again, leaving investors to weigh whether the renewed fighting could ripple through energy and financial markets in the weeks ahead. According to President Trump, the operation came in response to Iran's attempt to mine the Strait of Hormuz, attack oil tankers and target US service members. In response to the strikes, oil prices climbed to around $90 a barrel. More volatility is always possible, but we don't think this week's news marks a radical shift from where things stood before the latest escalation. For months now, we've highlighted how businesses have adapted to energy supply constraints, making the Strait of Hormuz less critical than it once was. This week's headlines don't change that underlying story. History offers additional perspective here. Consider Russia's 2022 invasion of Ukraine. That event forced far larger and more permanent changes across global energy markets. And even then, Brent crude peaked at roughly $133 per barrel before normalizing relatively quickly. Today's oil price, near $90 per barrel, sits comfortably below those extremes, even with fresh strikes and tanker attacks in the news. The Strait may never look exactly as it did before the conflict, but global markets have shown, time and again, that they don't need perfect conditions to keep functioning. The reminder for investors is that markets are resilient and forward-looking. They weigh conditions 3 to 30 months out, not just today's headlines. We think markets are already pricing in a future where the Strait of Hormuz plays a similar role. Seeing continued conflict is disheartening, and our thoughts are with those affected. But when it comes to your investments, a calm, patient, long-term view tends to serve you far better than reacting to the latest developments.

Next, US employment data for August.

Today, the US Bureau of Labor Statistics released August jobs figures showing non-farm payrolls rose by 162,000, beating expectations and the largest increase since March. The unemployment rate remained unchanged at 4.1%. In July, payrolls were later revised upward to 23,000. Investors often try to pull deep meaning from each month's labor release. We understand the impulse, but we don't think it's a fruitful exercise. Employment follows economic growth, it doesn't lead it. So drawing forward-looking conclusions from backward- looking jobs data doesn't hold up well. If you consider how hiring actually works, companies usually don't add staff until they see more business walking through the door. And even then, filling a role can take weeks or months. That means the payroll numbers you read today largely reflect decisions businesses made a while back based on how things looked then. They're a snapshot of the past, not a preview of what's ahead.

Finally, the G20 finance ministers' meeting.

On Monday, finance ministers from around the world gathered in Asheville, North Carolina. Growth trends, government debt, monetary policy: it was all on the table. A couple of remarks stood out. Treasury Secretary Scott Bessent said that the world is "awash in debt" and that the only path forward is to "grow our way out of it." New Fed Chair Kevin Warsh echoed a similar theme, describing the current environment as one of secular growth and a global investment surge. Naturally, some investors may be tempted to read between the lines, hunting for clues about where the economy and monetary policy head next. But similar to the Fed meeting in Jackson Hole last week, we'd encourage investors to dial down the speculation. As we've said before, watch what central bankers and finance ministers do, not what they say. Comments about US debt or the surge in AI-related investment make for lively headlines, but in our view, they don't tell us much about where markets go from here. Remember, markets are highly efficient at pricing in new information. We don't believe this meeting surfaced any fresh concerns that markets haven't already digested.

That's it for this week.

Thanks for tuning in to This Week in Review. If you're looking for more insights, don't miss our other series, 3 Things You Need to Know This Week, released every Monday. You can also visit FisherInvestments.com anytime for our latest thoughts on markets. We'll see you next time. Thanks again for joining us, and don't forget to hit like and subscribe.