War sends cargo to the skies

From American Public Media, this is Marketplace. In Los Angeles, I'm Congress.

All this Tuesday, today this one is the third of March because it's always to have you

“along. Everybody, we are four days into things in the Middle East and the only thing that”

is clear is that there are a whole lot of things that aren't clear. So we're going to talk about that and what that means, economy wise Greg, if is at the Wall Street Journal, he also joins us on the occasional Friday. Hey, Greg, hey, guy, how are you? I'm all right. Thanks. Test my premise. Risk. What is your assessment of the risk tolerance

the risk atmosphere out there? Well, you wake up to a new war in the Middle East and obviously people are worried and that adds to the risk and the whole geopolitical economic situation and this comes out of time when people are already kind of on edge about like the AI bubble bursting or maybe everybody is losing their jobs to AI, still some inflation pressure out there.

So kind of adds to it overall mix of anxiety out there. Now all that said, I would say that the reaction in the two days of trading we've had since the war began has been muted on Monday, oil rose, but it didn't rise as much as a lot of analysts had expected. Stocks fell off, sold off, but they ended the day mostly unchanged. Tuesday, we wake up and it's almost like a delayed reaction. It's just, oh wait a minute,

there's a war going on. Well, it goes up some more and stocks fell. But even so, you know, I've been through a lot of these things over the years. Right now, it still feels like a muted reaction by the market to what's going on in Iran. Talk to me about the dollar and bonds, would you? Because the dollar has been rallying, bond yields are going up, which means people are selling bonds, explain all that.

Sure thing. So let's talk about the bonds part. That's a little bit easier to explain. So when people worry about inflation, for example, because oil prices are going up, they worry that the Federal Reserve will not be able to lower interest rates as much. If interest rates aren't going to go down, that means bond yields are probably supposed to be higher than the already are when body yields go up. Prices go down. And that is exactly

what we've seen happen in the last couple of days. A small decline in bond prices, a small increase in bond yields. So if you are hoping for some relief last week, mortgage rates dropped below 6%, don't expect them to go much lower. Maybe they go a little bit higher in the next year or two. The issue with the dollars and interest rate went high. Because the dollar did go up, which is sort of what is supposed to happen when

there's a war because the dollars of safe haven. But it's been a break from the prior year when you had all this geopolitical conflict and the dollar was going down. And what that,

“I think told us was at the U.S. at least for most of the past year was now being seen”

as the source of instability. Because of trade wars and stuff like that, not the place you go to escape instability. The last two days are a little bit of a break from that. The caveat to this next question, of course, is that you're a business economics guy and not a geopolitics guy. But what do you imagine the market? How to phrase this? What do you imagine the president's pain point to be vis-a-vis the markets? Is he looking

at stocks? Is he looking at bond yields? Do you think there's a thing that's going to make him go, you know what? Let's get out of this in hurry. You know, I think all those things are going to like bear on that guy. I think the president goes into this war on the premise that

within four to six weeks, he can achieve most of his aims, which is really basically the capitulation

of the regime in Iran to his key demands stopping nuclear enrichment, stopping ballistic missile development, stopping support for proxies. And so I suppose I would assume that he's steeled

“himself for some pain over that four to five weeks. I think the thing is, if the four or five”

weeks elapses and he's not getting closer to his goals and the pain continues to build, that presents him with some really tough choices. Because this is, as you say, a president that cares a lot about the stock market, he's been urging the federal reserve to cut interest rates claiming inflation is not a problem. So if the war does not quickly start delivering the goals that he has set out for himself in the next few weeks, it does start to really, you know, elevate his

pain points. 30 seconds on this next answer, Greg, and then we got to go four to six weeks sounds like a very long time as we sit here on day four. It really does. And a lot can happen. Now, on the one hand, you might say, well, the Iranians, they have a lot of missiles, they have a lot of drones, they can hold it for a long time. This, you know, conflict has been going on at one level or another for 50 years. They can certainly hold out a little bit longer. On the other

hand, a lot of things are going against them. Their civil, their population is angry at them. Their defenses have been shown to be very weak and so forth. I think the president is hoping

that he maybe ends up in a Venezuela like situation where the regime stays in place, but basically

these are geopolitics. Nobody should be too confident. Absolutely not. Greg,

get with the Wall Street Journal occasionally with us on a Friday. Thanks, Greg. Thanks for having me. Wall Street today, not as bad as it could have been as Greg was alluding to, but all the needs to be said. We'll have the details when we do the numbers.

“Commercial aviation is in the news today, and part because that's really the only way for people”

who want to get out of the Middle East to get out. Also, though, because the airspace in that region is obviously perilous, which is hampering air cargo. Yes, most of what moves around the world

does travel by ocean freight, but air cargo demand hit a record high last year. That's according

to the International Air Transport Association. Marketplaces, Kristen Schwab, looks at demand and disruption in air freight. Most of the goods traveling through the Middle East are there for a layover, a pit stop to refuel on the way to Europe from Asia. Brandon Fried, executive director of the Air Forwarders Association, says 13% of air freight passes through the Gulf. A lot of transfers through that area, because the Gulf carriers, the Middle East carriers,

“have tremendously significant air cargo programs. In part because of their tremendously”

significant commercial flight programs, about half of the goods that travel by air fly under the

belly of commercial flights. The other half goes on dedicated air cargo planes, usually companies that make goods that are expensive, or expire quickly will pick air over sea. We're talking pharmaceuticals, electronics, fresh cut flowers. So it's much easier. It's a lot shorter transit time. Brandon, the cost is more significant. Fried says shipping by air costs anywhere from five to ten times the amount of shipping by water. Still, companies have become increasingly willing to

cough up the extra cash. Martin Dresner, a professor of supply chain management at the University of Maryland, says one reason has been fear about global conflicts. You know, there's issues in

“transiting through the Suez Canal because of some hostilities with the rebel groups in Yemen,”

previous to that, there's been pirates. If conflict happens, it's much easier and less time intensive to reroute cargo in the air than it is to say force a ship the long way around Africa. Plus, it's a safer option than ocean sugar. But no method is perfect. Limited airspace means limited cargo capacity, and Brian Burke, Chief Commercial Officer at Seco Logistics, says carriers are already dealing with messy routes. You know, the warning crane has effectively shut off Russian airspace,

and so the same flights that now fly have to fly along or route. There is a limit to how many planes can occupy any given route each day, and carriers will demand higher rates. Because essentially it becomes like surge pricing. Add longer hours for pilots and extra jet fuel, and you get higher shipping bills for businesses everywhere. I'm Kristen Schwab for Marketplace. It's easy and understandable to lose track of the fundamentals when the news environment is

as it has been, which is why we are here to remind you that we're in the thick of quarterly earnings season for the big retailers across this economy, where it's from Best Buy and Target this morning, both of which reported something of a slump and holiday sales late last year. Later this week, we're going to get updates from Abercrombie, Bath and Body Works, Costco, and Kroger. And how those retailers are doing is Marketplace's Daniel Aquaman reminds us,

can also tell us a little something about the engine of this economy. We, the humble American consumer. The holiday season can be make or break for retailers, and this past one for Target. You know, it wasn't great. Genit Joseph Klopp and Berg of JJK Research says some of that was due to basic execution. There wasn't enough product on the shelves. They had stuff in the back room, but somehow it wasn't getting moved out. But retailers also faced headwinds that were

out of their control, says Anthony Chikumba of Loop Capital. So you have this consumer that has been buffeted by elevated inflation for quite some time. Add growing job concerns and consumers could

a slog, just like 2025 was quite frankly. Chikumba says oil prices are already rising due to the

“war in the Middle East, which could further strain consumers and retailers alike. But there are”

some opportunities for retailers, such as Jessica Ramirez of the Consumer Collective. Those include beauty products and work attire. In a time work, the consumer is concerned about holding onto their job they will be wanting to dress to impress and feel good. Many Americans will also see higher than usual tax refunds this year, says Janet Joseph Klopp and Berg of JJK Research. Usually we don't see the consumer save when they get a little treat. We see them spend it right away.

That could provide a temporary boost for retailers. I'm Daniel Acumen for Marketplace. Coming up, and then when we're ready, when we have all that feedback, we can blast it out more

widely and get you all those eyeballs. Thank you. No. First though, let's see the numbers.

“Now industrial's down 403 today, eight tenths of 1%. 48,501. The Nasdaq down 232 points”

about 1%, finished 22,516, and the S&P 564 points 9,10%, 68 and 16. Believe me, when I tell you, it was way worse early in the going. Daniel Acumen was just talking about retail sales. Target reported better than expected profit last quarter. Jumped six and seven tenths of 1%. Best by missed quarterly profit expectations. Also a lackluster holiday season, but the electronics retailer still beat earnings estimates for the past year. Best by climb 7%.

America's second biggest retailer, second out Amazon, Walmart, those six tenths per cent, bonds down yield on the 10 year t-note up 4.06%, you're listening to Marketplace. This is Marketplace. I'm Kai Rizdon. We're going to get the latest report on light vehicle sales. That's cars and SUVs and pickups. It's coming from the Bureau of Economic Analysis tomorrow. Best guesses are that February will have been a bit better than January was.

Auto sales have been in a word volatile the past couple of years. COVID-induced shortages,

“which of course you remember followed by surging demand, and then tariffs stopped by people rushing”

by before EV tax incentives went away. So Marketplace is Mitchell Hartman. Takes a look now at what's in store for motor vehicle sales in the 2627 model year. Auto sales flagged late last year and into January. But says air and heating at Cox automotive.

So far February sales from manufacturers look pretty good. Now in the first week of March,

consumers are seeing war in the headlines. We've just had a big weekend of disruption. Consumer assessment has continued to be volatile and sagged quite a bit with phenomenon we're calling another people of called uncertainty fatigue. That might give consumers pause before buying a new car or pickup. The average price of which stopped $50,000 late last year for the first time ever. Though so far, price alone hasn't diswated many buyers.

Says call [email protected]. I've been amazed at the level of new vehicle sales. Vehicles have gotten extremely expensive and people keep buying them in spite of that. Brower says it's an effective the K-shaped economy. A lot of people can't afford a new car any longer. But enough can. People who are just wealthy. People who are wealthy and their kids aren't wealthy.

But they help them out. You know, they're like, well, all help buy you the car. Meanwhile, tariffs haven't ended up pushing new vehicle prices much higher says Michael Brisson at Moody's Analytics. Auto makers, they did eat a lot of the tariffs. They were coming from a very high profit range so they were able to take a hit their margins. Plus, mortgage rates are down and tax refunds are up. So consumers may have

more room in their budgets for a new ride. I'm Mitchell Hartman for Marketplace.

Of the many decisions parents have to make. One of the first after deciding to actually have

a child is child care. It's often expensive and in some parts of the country, rural areas in particular. It's hard to find. The left-leaning Center for American progress says something like 60% of rural families live in child care deserts to find his three young kids for every

this trying to close that gap between kids and care. Six month old Daisy wakes up from a nap with pink cheeks and spiky hair. Sarah and Adam Hactl are picking her up from Uray Family Child Care

located in a little town down near Telluride. When did she start here? Today. Today's her first

day? Yes. How did he go? Great. Yeah. He went wonderful. Yeah. Baby Daisy got a spot here for the winter. Adam remembers what things were like before they found this place back when their older son was young. A lot of drive. With few full-time options close by, these parents would spend nearly three hours a day getting their son to and from daycare. And this is not unusual. Survey data shows that for four out of five parents here, child care falls short, especially for babies and toddlers.

“It's unaffordable to live here, so like you have to work full-time, or we have to at least.”

I want to be for everybody, but like without child care that's not possible and so we'd have to move some routes. Last year, working families got some relief when this daycare and another opened just down the street from each other in a new affordable housing development. What makes this different from regular in-home daycare is that the houses were built specifically for it and pre-licensed with the necessary fences, ramps, and square footage. They're part of a

local project, aiming to address the shortage of child care and housing all at the same time. The region's early childhood council recruited and trained providers. The builder reduced costs through grants, state dollars, and low-cost construction loans. Melissa McCristen operates Uray Family Child Care. This is kind of our craft/eating area.

“Her tidy white house sits on the Uncompodry River, mountain peaks loom in the distance.”

McCristen points to her living room. They do napped over here because it's cozy. McCristen applied to live and work in the home. She got a large grant to buy tiny tables, bookshelves, and cubbies, but it's been a roller coaster. I mean, it's up some downs with the unknowns.

She's had to learn billing and scheduling. Enrollment was slow at first, but now I'm probably

set with babies, and then with a weight list for three years. Efforts to create more in-home day care spots are underway in other rural communities, in states like Kansas and Minnesota. Here in Colorado, Uray's second day care is located on the same street as the first one. A stray up high at runs, tiny Colorado treasures, staying open 11 hours a day, plus some weekends. Business is going really well. But the other part of this project,

“the home ownership part is more complicated. My initial plan was, you know,”

live in the home for two years, which is great, and then buy it, but that's just not realistic. These two providers get subsidized rents with the option to buy, but the rent goes up every year. And with the cost of living and running a business, buy it just can't save enough for a down payment. She's still hoping to buy, eventually, same formalism a Christian of Uray Family Child Care, as she helps the Hattel family

try to get out the door. He's a by-friends. My Christian shares some good news. We have a full-time spot open, so we want to offer a full-time spot for baby daisy, starting in the

spring. Amazing news, they say. So while this experiment hasn't completely

solved the area's child care shortage, this family is driving home happy. In Uray, I'm Lee Patterson from Marketplace. Our parting words on the program yesterday were about how everything that's going on right now is affecting the housing market. To which, pushing the average 30-year fixed rate mortgage back above 6%.

If you pull back a bit though, there's even more that's complicating the world of home buying today. We've gotten used to being able to find pretty much every home for sale. We might be interested in with a quick Google search and then a bunch of brokerage websites, right? Last week they'll compass the biggest real estate brokerage in this country said it's going to be now showing exclusive home listings only on redfin. This is the latest development and an ongoing battle

over digital home listing, specifically between compass and redfin's competitor Zillow. James Rodriguez wrote about it for business insider, welcome to the program.

lawsuits, what in like 45 seconds is going on here? So this is really a fight for control

“of real estate listings and it could determine where you find your next home, whether it”

ever appears on Zillow at all and you have on one side the country's largest brokerage compass which has been essentially advertising homes in some places but not others. It's been advertising homes on its own website or in private databases but not sharing them more widely at least initially and you have Zillow saying hey if a home is advertised somewhere online it should be everywhere and so they've insisted to these rules that effectively could

ban some listings if they're not advertised properly. What this basically means is that homes

are you have the real estate market essentially fracturing where homes may be listed somewhere online and not other places. Well let's take it away from these two behemoths and whatever's happening with the overall home buying ecosystem which is which is enormous in this country and hugely

“important individual wealth. What does it mean for me if first of all I'm a would be seller of a home.”

Well typically when you list your home for sell your agent will put it in a local database known as the multiple listing service MLS and that's going to blast it out everywhere to other brokerages to you know agents and these big portals like Zillow or realtor.com homes.com and that effectively gets as many eyeballs on it as possible. You have some brokerages like compass that are saying hey it's actually not good for you if you go that route they're saying

it's better if you initially advertise it among a smaller crowd you kind of build this interest you don't have days on market building up you don't have price cut history shown publicly and then when we're ready when we have all that feedback we can blast it out more widely and get you all those eyeballs and you people on the other side of things are saying hey this will create this fractured market place where homes may be hidden in some places or you might not

have a good sense of what's out there and you know for buyers that could be a more complicated scenario. Right so let's talk about what it means for people who want to actually buy a house they're

how's it out there that I can't see is that what you're telling me? Yeah and that's always been

to some extent the case you know you you have agents that have good relationships with sellers in the area but if we see things changed to where you know the compass model and another big brokerages have sort of either soft launch this strategy or threaten to follow suit what you could have is your choice of an agent would be a lot more fraught you might have to consider you know to what extent are they able to unlock the marketplace for me so at the end of the day it could

be a more complicated home search. One doesn't imagine that this agglomeration of real estate

brokerages and companies right I mean compass owns a bunch is always huge it all just becomes

power and wealth and market power concentrated in the hands of one maybe two giant real estate companies.

“I think that's the fifth thing you have to look at here is that every company you know they present”

these moral cases for you know home should be listed everywhere or sellers should have the choice of where to list their homes every company involved in this fight has a huge financial stake in this as one long time real estate executive told me listings are fuel and so this fight for listings is really at the heart of the real estate market and it could determine you know what kind of market do we have is it a place where you can go to any website and get a pretty good feel for what's

about there or are you really going to have to be a lot more careful about your search and and think about who your agent is what websites you're visiting what other you know alternative methods you need to pursue to find your dream home it it could just be a lot more complicated. Right James Rodriguez at the business insider James thanks much appreciate your time. Thank you all right we gotta go too much news not enough time Jordan Manchys O'Neill Maharaj

Janet win Olga Oxman and Virginia case Smith are the digital team around here part of it anyway I'm Kai Rizdel we will see you tomorrow this is APM