Weekly Market Report: March 20th, 2026

Financial Market Highlights

• The war in Iran and associated risks to global energy infrastructure delivered a third down week for equity and bond markets driven by commodity price risks to the global economy.

• While high yield credit spreads have remained sanguine, investor sentiment measures including growth outlooks and fund manager positioning have begun to deteriorate.

• Private credit, high yield’s first cousin, continues to garner substantial financial media coverage, but risks are likely to evolve very slowly, and the degree of systematic risk remains an open question.

Economic Highlights

• Last week’s economic calendar was light on the surface; government shutdown impacted, and again largely irrelevant given overwhelming risk drivers coming from the Strait of Hormuz.

• Economists put recession probability at 32% with elevated oil prices the key factor. Despite positive real wage gains since 2023, more is needed to catch up from the post pandemic inflation surge.

Bullish Asset Allocation Narratives

• Robust U.S. corporate earnings growth, strong profit margins, and positive forward guidance.

• Growth conducive policies across both fiscal (elevated deficit spending) and regulatory landscapes.

• Resilient consumption with low unemployment and under levered consumer balance sheets.

• AI implementation including infrastructure buildouts, productivity gains, and earnings potential.

Bearish Asset Allocation Narratives

• Energy price shock resulting from U.S. foreign policy in Iran and associated risks to inflation and economic growth, particularly given soft labor market hiring/wage gains, cumulative inflation dynamics, and depressed consumer savings rates.

• AI trends given the current equity market profile, shifts toward asset and capex intensive business models, concerns surrounding circular transactions, increased debt financing, and disruptive forces across labor markets and business models.

• Tariff (trade) policy uncertainty and impacts on business uncertainty, price levels, and supply chains

Weekly Market Report: March 13th, 2026

Financial Market Highlights

• Stock and bond markets remain transfixed to sporadic messaging regarding the war as investors look for indications on how long the global energy market disruption will last with energy prices reaching levels not seen since Russian invasion of Ukraine in early 2022.

• BlackRock gated their HPS Corp Lending Fund last week adding another chapter to private credit industry anxiety following on separate Blue Owl and Blackstone incidents.

Economic Highlights

• Last week’s busy economic calendar was largely disregarded as developments in the Middle East drove markets. Economic highlights included a downward revision to Q4 GDP, persistent inflation, and an increase in job openings.

• The historic run up in oil prices reach overbought levels not seen since Iraq invaded Kuwait in 1990 introducing upward inflation pressure, including to gasoline prices which are up 16%.

Bullish Asset Allocation Narratives

• Robust U.S. corporate earnings growth, strong profit margins, and positive forward guidance.

• Growth conducive policies including a less restrictive Fed, fiscal stimulus, and deregulation.

• Resilient consumption with low unemployment and consumer balance sheets in good condition thanks to market-related wealth effects and room to ‘re-lever’.

• AI implementation including infrastructure build, productivity gains, and earnings potential.

Bearish Asset Allocation Narratives

• Energy price shock from the war in Iran add a key risk to consumption, particularly given the backdrop of a weak job market, cumulative inflation dynamics, and depressed consumer savings rates.

• Tariff (trade) policy uncertainty and impact on price levels, supply chains, and business uncertainty.

• AI trends given narrow equity markets, significant capex profiles, and industry specific concerns including circular transactions, increased debt financing, and a shift to asset intensive business models.

Weekly Market Report: January 16th, 2026

Financial Market Highlights

• The S&P 500 closed down slightly on the week but not before marking a new record high. The new year is seeing leadership from small caps, non-U.S., and value stocks while growth stocks lag.
• Fourth quarter earnings season kicked off last week with expectations of double-digit earnings growth, particularly from the technology sector, and positive forward guidance from management.

Economic Highlights

• Last week’s economic calendar featured November inflation coming in at expectations along with data on retail sales, housing market, and industrial production. Inflation data reinforced the downward year over year trend, bolstering the more dovish voices within the FOMC.

Bullish Asset Allocation Narratives

• Strong consumption with ample room for the consumer to re-lever and market-related wealth effects.
• AI boom including substantial infrastructure buildouts, projected productivity gains, and earnings potential.
• Growth conducive policy backdrops including a less restrictive Fed, fiscal stimulus, and deregulation.
• Robust U.S. corporate earnings growth, profit margins, and forward guidance.

Bearish Asset Allocation Narratives

• Risks to consumption due to lower/middle class price fatigue (cumulative inflation), higher interest rates (sluggish housing market), and slowing labor markets.
• AI bust given unproven ROI/monetization profile, narrow equity markets, and industry specific concerns (circular transactions, increased debt financing, more asset intensive business models).
• Monetary policy mistakes given prevailing labor market dynamics and inflation trends.
• Tariff and immigration policies introducing longer-term structural headwinds on aggregate demand, trade, and hiring alongside shorter-term goods and sectoral level labor inflation.

Weekly Market Report: January 9th, 2026

Financial Market Highlights

• Value and non-U.S. stocks have begun the year slightly ahead of U.S. and growth stocks with strategist projecting a continued rotation from tech to non-tech sectors looking forward.

Economic Highlights

• Economic data last week was centered around health of the labor market, including a low hires-low fires December jobs report, official survey data, and private sector measures. Taken together, the data confirm tepid demand and an overall mixed outlook with a low hiring, low firing backdrop.
• Growth forecasts continue to paint a constructive picture of overall U.S. economic activity with Q4 model estimates from the NY Fed of 2.6 % and Atlanta Fed of 5.1% and Q1 of 2.6% (NY Fed).

Bullish Asset Allocation Narratives

• Strong consumption with ample room for the consumer to re-lever and market related wealth effects.
• Growth conducive policies including a less restrictive Fed, fiscal stimulus, and deregulation.
• Robust U.S. corporate earnings growth, profit margins, and forward guidance.
• An AI boom including substantial capex and longer-term productivity gains/earnings potential.

Bearish Asset Allocation Narratives

• Risks to consumption due to lower/middle class price fatigue (cumulative inflation), higher interest rates (sluggish housing market), and slowing labor markets.
• Reliance on AI stock momentum and capex with unknown ROI and monetization potential alongside circular transactions, debt financed expenditures, and a pivot to asset intensive business models.
• Tariff and immigration policies introducing longer-term structural headwinds on aggregate demand, trade, and hiring alongside shorter-term goods inflation and sectoral level labor inflation.
• Fed policy mistake of being too restrictive (or accommodative) given labor and inflation dynamics.
• Fading U.S. fiscal thrust beyond Q3’26 with constraints on continuing elevated deficit spending.

Weekly Market Report: December 19th, 2025

Equity markets took in a full calendar of economic reports to kick off Santa Claus rally season last week, struggling early but rallying toward the week’s end. Markets enjoyed a revival in AI momentum while non-U.S. developed and emerging markets dealt with a strengthening dollar to close the week down 1%. Bond yields and commodity markets both fell slightly on the week with oil prices closing down 1.4% to $56.66/barrel.

Financial Market Highlights

• U.S. equity markets remained buoyant entering Santa Claus rally season with positive AI sentiment combining with economic reports feeding into the Fed accommodation narrative.
•  The S&P 500 stands a mere 1.24% below its record high but bond yields have been more stubborn than expected despite Fed rate cuts, falling inflation, and little financial stress. A simple OLS model from Bianco Research suggests 10yr yields should be closer to 3.22%, not 4.15%.

Economic Highlights

• A busy economic calendar last week brought indications of cooling inflation, retail sales, and labor markets, offset by expansionary readings from PMI surveys.

Bullish Asset Allocation Narratives

• Strong consumption with ample room for the consumer to re-lever and market related wealth effects.
• Growth conducive policies including an incrementally less restrictive Fed, OBBB fiscal stimulus, and business friendly deregulation.
• Robust U.S. corporate earnings growth, profit margins, and forward guidance.
• An AI boom including substantial capex and longer-term productivity gains/earnings potential.

Bearish Asset Allocation Narratives

• Risks to consumption due to lower/middle class price fatigue (cumulative inflation), higher interest rates (sluggish housing market), and slowing labor markets.
• Reliance on AI stock momentum, questionable circular AI transactions, unknown AI monetization potential, and a transition to debt financed capital spending and asset intensive business models.
• Tariff and immigration policies introducing longer-term structural headwinds on aggregate demand, trade, and hiring alongside shorter-term goods inflation and sectoral level labor inflation.
• Fed policy mistake of being too restrictive (or accommodative) given labor and inflation dynamics.
• Fading U.S. fiscal thrust beyond Q3’26 with constraints on continuing elevated deficit spending.

Weekly Market Report: November 21st, 2025

Equity markets tried to take an overdue breather last week with earnings season largely behind us and inflation/FOMC dynamics taking on renewed focus. Despite some mid-week jitters, equity markets closed the week relatively flat with value outperforming growth domestically and international developed (+1%) and emerging (+0.75%) both posted stronger gains thanks to a weak USD (-0.31%). Interest rates inched higher across the curve, taking the 10yr back up to 4.14% to close the week.

Financial Market Highlights

• U.S. equity market saw more consolidation last week with monetary policy and a slow reboot of economic data acting as the primary drivers.
• The past week of Bitcoin and Ethereum wiping out all of 2025 gains reminds investors of the massive swings crypto can bring which includes 10+ declines of 25%, 6 of 50%, and 3 of 75%.
• Large UST auctions, including a $48.5b 10yr issue, over the past two weeks have reinforced competing narratives of market complacency and long-term fiscal profligacy.

Economic Highlights

• The K-shaped recovery has several plausible explanations including a robust stock market, low household debt, anemic job prospects, and challenging affordability.

Bullish Asset Allocation Narratives

• Growth conducive policies including an incrementally less restrictive Fed, OBBB fiscal stimulus, and business friendly deregulation.
• A healthy consumer with room to re-lever thanks to lower debt levels and higher net worth.
• Exceptional U.S. corporate earnings growth, profit margins, and forward guidance.
• Fading tariff levies and trade policy uncertainty.
• The AI boom including substantial capex, expected productivity gains, and earnings potential.

Bearish Asset Allocation Narratives

• Risks to consumption due to elevated interest rates, sluggish labor markets, tariff-related demand destruction, and cumulative inflation.
• Monetary policy mistake from the Fed overstaying restrictive policy despite labor market stress.
• Fading (TCJA, pandemic stimulus, OBBB) U.S. fiscal thrust beyond Q2’26 with clear market and political constraints on continuing elevated deficit spending.
• Narrow market reliance on AI stock momentum and aggressive capital spending amidst eyebrow raising circular investment and high valuations/earnings expectations.