March 5 Member Morning Brief: Putin Considers Cutting Off Gas to Europe; US Defense Secretary Says US-Iran Conflict May Last Eight Weeks or Longer

1. [Putin Considers Cutting Off Gas Supply to Europe] According to CCTV International News, Russian President Putin stated in an interview with Russian media on March 4 local time that current increases in oil and natural gas prices are due to restrictions on Russian energy, as well as factors such as US and Israeli aggression toward Iran. Meanwhile, the EU plans to comprehensively ban imports of Russian pipeline and liquefied natural gas. Putin said that since the EU will eventually stop importing Russian gas anyway, Russia might as well proactively "cut off European gas," ceasing supply to the European market and shifting toward emerging markets.

2. [US Secretary of Defense States US-Iran Conflict May Last Eight Weeks or Longer] According to CCTV News, on March 4 (Wednesday) local time, US Secretary of Defense Pete Hegseth stated that the US-Iran conflict may last eight weeks or even longer, and that the US will control the pace and intensity of operations. He also said that NATO intercepting Iranian missiles would not trigger the collective defense clause. On the same day, there were reports that Iran denied previous US media claims about seeking negotiations with the US; Iranian media cited domestic intelligence sources saying such claims were "pure lies and psychological warfare."

3. [Jensen Huang: The $30 Billion OpenAI Investment 'May Be the Last'] On Wednesday, March 4, Nvidia CEO Jensen Huang stated at the Morgan Stanley Technology, Media & Telecom Conference that Nvidia's recent $30 billion investment in OpenAI "may be" the last. The reason is that OpenAI plans to list publicly—possibly as early as the end of this year.

4. [US February ISM Services PMI Hits Highest Since Mid-2022] The US ISM Services Index rose to 56.1 in February, jumping 2.3 points from the previous month to reach the highest level since mid-2022 and exceeding expectations. The new orders sub-index climbed to 58.6, the highest in more than a year; the order backlog index surged an unprecedented 11.9 points in a single month to reach the highest level in nearly four years.

5. [US ADP Private Payrolls Rebound Beyond Expectations] Data released Wednesday by US HR and payroll giant ADP showed that the US private sector added 63,000 jobs in February, the highest since November last year. This result exceeded the market expectation of 50,000 jobs. However, the January data was sharply revised down, from 22,000 to 11,000.

Comment: A deep analysis of ADP’s new employment structure reveals that the current US labor market is experiencing a stark polarization. Nearly all new jobs are being driven by defensive industries and infrastructure-related sectors. Among them, the education and health services industry stands out, creating an impressive 58,000 new jobs in a single month, serving as the absolute main driver of employment growth . Close behind is the construction industry, which added 19,000 jobs, supported by government infrastructure bills and housing shortages .In contrast, white-collar knowledge industries, highly sensitive to interest rates and under significant impact from generative artificial intelligence (AI), are experiencing drastic downsizing. The professional and business services sector (which covers consulting, law, accounting, advertising, etc.) slashed 30,000 jobs in February, making it the hardest-hit disaster area . Manufacturing was also not spared, with a reduction of 5,000 jobs .