March 5th Member Morning Report: Putin considers actively cutting off gas to Europe; U.S. Defense Secretary says U.S.-Iran conflict could last eight weeks or longer

1. 【Putin considers proactively cutting off gas to Europe】According to CCTV International News, Russian President Vladimir Putin stated in an interview with Russian media on March 4 local time that the current rise in oil and natural gas prices is due to restrictions on Russia’s energy exports and the combined effects of U.S. and Israeli aggression against Iran. The European Union is also planning to ban all imports of pipeline natural gas and liquefied natural gas from Russia. Putin said that since the EU will eventually ban Russian gas imports anyway, Russia might as well take the initiative to “cut off gas” to Europe, stop supplying the European market, and shift to emerging markets.

2. 【U.S. Defense Secretary says U.S.-Iran conflict could last eight weeks or longer】According to CCTV News, on Wednesday, March 4, U.S. Secretary of Defense Lloyd Austin stated that the U.S.-Iran conflict could last eight weeks or longer. The U.S. will control the pace and intensity of actions and also said that NATO intercepting Iranian missiles would not trigger collective defense clauses. On the same day, reports emerged that Iran denied previous U.S. media reports about Iran seeking negotiations with the U.S.; Iranian media quoted intelligence officials as saying those claims are “pure lies and psychological warfare.”

3. 【Huang Renxun: $30 billion investment in OpenAI may be the last】On Wednesday, March 4, NVIDIA CEO Jensen Huang said at the Morgan Stanley Technology, Media, and Telecom Conference that NVIDIA’s recent $30 billion investment in OpenAI “may be” the last. The reason is that OpenAI plans to go public, possibly as early as the end of this year.

4. 【U.S. February ISM Services PMI hits highest since mid-2022】The U.S. February ISM Services Index rose to 56.1, up 2.3 points from the previous month, reaching the highest level since mid-2022 and exceeding expectations. The new orders sub-index increased to 58.6, a more than one-year high; the order backlog index surged by 11.9 points in a single month, recording an unprecedented increase and reaching the highest level in nearly four years.

5. 【U.S. February ADP Private Payrolls exceed expectations, stabilize】Data released by HR and compensation giant ADP on Wednesday showed that in February, U.S. private sector employment increased by 63,000 jobs, the highest since November last year. This exceeded market expectations of 50,000 jobs. However, January data was significantly revised downward from 22,000 to 11,000.

Commentary: A deep analysis of ADP’s new employment structure reveals that the current U.S. labor market is extremely polarized. Nearly all new jobs are driven by defensive industries and infrastructure-related sectors. Notably, education and healthcare services led the growth, adding 58,000 jobs in one month, becoming the main driver of employment growth. Following closely is the construction industry, supported by government infrastructure bills and housing shortages, which added 19,000 jobs. In contrast, white-collar knowledge-based industries, highly sensitive to interest rates and widely impacted by generative AI, are experiencing brutal layoffs. Professional and business services (including consulting, legal, accounting, advertising, etc.) cut 30,000 jobs in February, suffering the most significant losses. Manufacturing also declined, reducing 5,000 jobs.