Three factors driving markets lower: energy, AI, and backup in government bond yields. Every $10 rise in oil leads to 40bps bump in inflation and 10bps hit to GDP. Combined with weak payrolls, markets worry about stagflation.

Markets are buying dips (last week saw $133B inflows). If oil stays above $100, maybe near $120 for extended period, markets would have difficulty climbing higher. Medium-term positive: strong earnings growth (~10%) expected, earnings season next month. Not stepping in to put cash to work in equities now due to uncertainty.

February payrolls were skewed by healthcare strikes. Payrolls likely settle in low five-digit range going forward. With strong earnings growth, US GDP can still be ~2% this year. Wild card is war and energy prices.

$80-$90 is a hit to growth we can survive. When we get to $100-$120 and stay there consistently, I become much more concerned. Earnings growth can stay resilient if oil does not stay sustainably above $100 for multiple months.