Oil Prices, SpaceX IPO, Jobs Report: What It Means for the Economy, 2026 Tax Payments & More

How much could inflation increase because of surging oil prices?

It is hard to know exactly how much the increase will be, but we do know it will be increasing because since the Iran war started February 28th, a barrel of oil has increased from around $70 a barrel to around $100 a barrel depending on the day. Economists estimate that the March CPI inflation number could be around 3.4% and may hit 4% in April. If the conflict continues through summer and into the fall, we could see inflation hit 5%. While this is a possibility, fortunately, it does not appear that will happen. One would have to go back 20 years to see this type of rapid increase in gas prices. The Fed has been trying for five years to get inflation down to 2% with no success, and it does not appear that it will happen this year, which means interest rate rates will probably remain around the current level for the remainder of this year. This will be tough on the economy because mortgage rates won’t be coming down as we expected, and people may not be doing that remodel on their home because home equity lines will still be high. Some may just say I want to get this done and just go ahead and accept the higher interest rate, but I believe most will choose to continue deferring the project. The good news is, I don’t believe this will last much past May or June because the President knows this would be very tough on the economy and the midterm elections are approaching quickly. So, currently we’re still saying this is a short-term problem and any pullback in good quality businesses that don’t have high valuations is a good buying opportunity.

You may finally be able to invest in SpaceX!

Bloomberg and CNBC’s David Faber reported that SpaceX has confidentially filed for an IPO with the Securities and Exchange Commission, also known as the SEC. It’s estimated the company could see a listing around June and that it is seeking a valuation of $1.75 trillion, which would lead to a record public offering. Don’t forget that SpaceX merged with Musk’s xAI, which also owns X and used to be Twitter, back in February. At that time the combined entity was valued at $1.25 trillion. Following a SpaceX IPO, Musk will become the first person to sit atop two separate trillion-dollar public companies. This IPO would also likely help increase Musk’s net worth, which is estimated to be close to $840 billion. Most of Musk’s net worth comes from his estimated 43%stake in SpaceX and 13% ownership of Tesla. I would have to assume this IPO would be well received given all the excitement around space, AI, and Elon Musk. This company is not just built around hype given its contracts with NASA, the Air Force, and Space Force. It also conducted 165 orbital flights over the course of 2025 and operates the Starlink satellite internet service, which runs on a constellation of around 10,000 satellites in lower-earth orbit. With that said, my guess is the stock would push higher in the public markets to lofty levels that would make it dangerous as a long-term investment. There’s also speculation that we could see IPOs for Anthropic and OpenAI this year. I do believe these mega IPOs could cause problems for stocks like Tesla, Nvidia, and Microsoft as there is only so much available capital and investors may sell those positions to a get a piece of these new exciting stocks. This should be an exciting year for the IPO market. 

Maybe the labor market isn’t as bad as people think

Coming off a weak February report where payrolls declined by 133k, March showed a nice increase of 178k jobs. Part of the volatility was due to a strike at Kaiser that led to job losses in February, but then a surge of 76k jobs in the health care space in March. Health care continues to be the driving force for the labor market, but construction was strong in the month as the sector added 26k jobs and transportation and warehousing saw a nice increase of 21k jobs. The government sector continues to weigh negatively on the headline number as federal government employment declined by 18k jobs in March. Since reaching a peak in October 2024, federal government employment is down 11.8% or 355k jobs. Financial activities also saw a decline of 15k jobs in the month and the other major sectors like manufacturing, information, and leisure and hospitality saw little change in the month. While I wouldn’t say the labor market is booming, considering the unemployment rate is sitting at 4.3%, which was down from 4.4% last month, I’d say maintaining the labor market at these levels would be extremely healthy for our economy. I remain optimistic that both the labor market and economy will remain in a good spot for the rest of 2026.

Financial Planning: Setting Up 2026 Tax Payments

With Tax Day approaching, it’s important to think not just about your 2025 tax return, but also about planning for 2026. In the U.S., taxes must be paid throughout the year either through withholding or quarterly estimated payments, and while your 2025 balance is due April 15, the first estimated tax payment for 2026 is also due on that same day. This matters especially for income like interest, dividends, capital gains, business income, and rental income, which typically don’t have automatic withholding and therefore require estimated payments. If you don’t pay enough during the year, the IRS will charge both interest and underpayment penalties on the shortfall. To avoid interest and penalties, you generally need to pay at least 90% of your current-year tax, 100% of last year’s tax, or 110% of last year’s tax if your AGI is over $150,000.  Since projecting the current year tax can be unreliable when income is variable, a simple way to stay on track is to use last year’s tax as a baseline since it’s known and easy, and if you fall behind, you can catch up by increasing withholdings from wages, pensions, or retirement withdrawals since withholdings are treated as if they were made evenly throughout the year, regardless of timing. 

Have you noticed the changes in the retail space?

It used to be that when you went into smaller strip malls there were retail shops that would sell you some type of product. That has now changed as over 50% of the total retail square footage in 2025 was for service-based tenants. Back in 2010 only 40% of the leasing space was for service tenants. Bars and restaurants still control a major part of the service sector, but they have started to see declines as well. Consumers today are more concerned with how they look and how they feel. Fewer people are willing to buy a handbag as a luxury symbol and many would rather focus on their recent yoga class or getting a facial, red-light therapy, or cryotherapy. Even services like IV hydration and vitamin infusions are occupying more retail space. 15 years ago, the wellness market was rather small but as of 2024 data in the United States, it accounted for $2.1 trillion. Fitness centers of all types accounted for roughly 30% of service-based leases, which is up from 20% just 10 years ago. There appear to be no signs of a slowdown when it comes to expansion for this space as big operators like Plant Fitness added more than 1 million members in 2025 and will be opening 200 new locations this year. You may hear that the economy is struggling a little bit, but it depends which area you look at because retail vacancy in the US is at 4.4%. This is near record lows thanks to strong demand from these service-based companies. 

If you can’t sell your home, should you rent it for a while?

Since the home selling market has slowed down, some owners have decided to rent out their home and wait to sell it until prices improve. This is known as becoming an accidental landlord and about 2.2% of rental listings that were on Zillow in November and December had previously been listed for sale. You’d have to go back four years to 2022 to see the same percentage of accidental landlords. It may sound like a good idea, but people need to realize that selling your home is much easier because the realtor takes care of most of the process. When you become a landlord, you must be more involved and you’ll have to consider the financial risks, which could include vacancy, the tenants damaging your home, or even disputes with your tenants over not paying rent. If that means you must evict the tenant, it can be very costly. Being the landlord also comes with liabilities such as if there’s a pool on the property and someone drowns; it is very possible you could be held liable for that as a landlord. Depending on when you bought the home and what your mortgage rate was, the rent you will be receiving may not even be able to cover the full payment for the mortgage, property taxes, and insurance. Don’t forget to include the cost of maintenance and repairs there as well. I would recommend if you needed to move for a job or another reason, you’re better off selling the home even if it is at a loss from what you paid for it. You will have a lot less headaches than trying to be a temporary landlord. Another recommendation if you’re moving to a new city that you’re unfamiliar with, I can’t encourage people enough to rent for at least a year or two to make sure you like the new location and learn the best place to buy a house in that unfamiliar city. It’s a big difference living in a city day in and day out than visiting it for a couple weeks and just seeing all the highlights. This too could save you thousands if not tens of thousands of dollars if the new city you moved to turns out to not be what you expected.

Has David Ellison bitten off more than he can chew?

It’s been a month now since the deal of Paramount Skydance (PSKY) buying Warner Brothers was confirmed and PSKY stock is trading around $9 per share, which is a fall of about 20%. The 43-year-old CEO, David Ellison, doesn’t have much experience running a major media company like he has pulled together. You must give the man credit for being tenacious because since September of last year he made nine offers to close a deal before he finally got what he wanted. The question is though, is he a good deal maker or did he just throw money after the deal until he got what he wanted? The initial offer was $19 a share and the final offer to close the deal was $31 a share. He also agreed to pay $2.8 billion breakup fee to Netflix, but I guess $2.8 billion is not much money when you’re talking about $81 billion for the winning offer. It is estimated it will take somewhere between six and 18 months to close the final deal. He now controls a major media company and will have much influence over what goes across our airways here in the United States. Paramount will take on a huge amount of debt to complete this deal, and the company will somehow need to come up with savings of at least $6 billion for the deal to make sense. The hard balancing act will be cutting costs but still producing content that people will like and watch. With the stock trading around $9 a share, it may look attractive, but the balance sheet looks like a mess and there are so many other question marks for this company.

If you have a used car, have the airbags checked out!

In the last few years, there have been nine confirmed deaths in car accidents from used cars that had a replacement airbag from a Chinese manufacturer named DTN. The NHTSA, which stands for the National Highway Traffic Safety Administration and is a federal agency that oversees the safety of cars on US roads, estimates roughly 10,000 faulty airbag parts may be on American roads. While this pales in comparison to the number of vehicles on the road, if you’re one of those 10,000 people that bought a used car with a faulty airbag, that’s a big concern. This isn’t the first occurrence of faulty airbags in recent history as there was a major airbag recall back in 2015 when a recall of 34 million cars with deadly airbags from Takata occurred. That company has since gone bankrupt. What is disappointing is that was a major recall because six people died worldwide and nothing seems to be happening about this current situation. The problem is replacement airbags are very expensive and if you try to replace them after an airbag is deployed, many replacement shops will often look for the cheapest airbags possible. If you bought a used car within the last couple of years, NHTSA recommends that you take the car to a certified technician at the dealership and have the airbag checked for faulty parts.

Wealthy Americans are changing the economy

In the most recent data, roughly 430,000 US households were worth $30 million or more and 74,000 were worth over $100 million. These high-net-worth households are growing faster than the general population. In many cases these people are growing wealth by building businesses, which is very helpful to the health of our overall economy. They are also spending that money on higher-end products like homes, cars, luxury travel vacations and more, which is also helpful as that helps create other jobs. You may be wondering how to get in this group? Well, the money did not come from winning the lottery or money falling from the sky, it has come from many years of investing in a rising stock market, growing small and midsize businesses and appreciation of home equity. It is true when they say money generates more money considering the wealth of the top 0.1% of households has grown more than 13-fold over the last 50 years even after adjusting for inflation. If you are in your 20s or 30s, you could see yourself in the top one percent of wealth if you do smart things such as max out your401(k), buy a home, and stop wasting money. Stop trying to look like you’re rich when you’re not by buying high-end products that will decline in value or waste your money on expensive dinners or the next hot gadget that will not increase your net worth over time.

Apartment rents should provide a benefit to inflation

Spring months are normally positive for apartment rents, but so far, the data has been lackluster. The national median rent rose to $1,363 in the month of March, which was an increase of just 0.4% from February. Compared to last year, March rents were down 1.7%. That would register as the largest drop since Apartment List began tracking the data in 2017 and it would mark a larger decline than what we saw in the early months of the pandemic. The national median rent hit a peak in 2022, and it has now fallen 5.5% from that level. That may not sound like a large decline, but when housing costs generally climb each year it’s problematic for those landlords to have a decline in pricing after nearly fours. We continue to believe oversupply is a large factor when it comes to the lack of rent appreciation and we believe this problem is likely to persist. There has been a surge in the supply of new apartment units over the last few years and while it peaked in 2024, new supply remains elevated. It’s also important to understand that 2024 produced the newest supply in a single year since 1986 as more than 600,000 new multifamily units hit the market. This has led to unusually high vacancies with the national rate sitting at 7.3%, unchanged from February, but still sitting at the highest level since data started being collected in 2017. Shelter costs continue to carry the largest weight when looking at the Consumer Price Index, and I continue to believe these struggling apartment rents will bleed through to the overall housing market and help with shelter inflation as we progress through 2026. There are other inflationary forces now in play, but the shelter index may actually have a huge benefit on overall inflation this year.