4 minute read
Smart insight and clear visuals that matter – what we’re watching now and how intention and conviction shape our portfolios.
Markets
Middle East conflict and the accompanying surge in Oil have, alongside slowing growth, raised concerns of Stagflation. Global central bank rate expectations have swiftly priced down 2026 cuts, sending government bond yields higher across the curve and pressuring global equity markets. Despite the accumulating pressure from Private Credit, AI Disruption, Oil Price Shock, and Elevated Valuations, the S&P 500 has remained rangebound for 6+ months, near all-time highs.
Earnings
Earnings outlook has not yet seen downward revisions for the S&P 500. The forward P/E on the S&P 500 was down on the week to 20.59x. The next 12-month earnings per share estimates were up to $325.22.
John Hancock provides a chart on how the S&P 500 performed historically after market events.
Rates
Fed Chair Jerome Powell signals this week that officials won’t cut rates until inflation resumes cooling. The revised dot plot, which is the FOMC members’ interest rate forecast, strongly implies one rate cut this year and one next year. There were three participants who reduced their rate cut forecasts from three to one this year.
Global central banks continue to signal preparation to hold rates higher for longer if Middle East conflict continues.
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The European Central Bank said it’s well placed to deal with growing dangers from the war after holding rates.
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The Bank of England noted it “stands ready to act” against a surge in inflation triggered by the war in the Middle East.
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The Bank of Japan kept the possibility of an April hike on the table after leaving policy unchanged.
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The Bank of Canada held its key interest rate amid domestic economic slack and wider disruptions due to the ongoing war in the Middle East.
Oil
Sustained high oil prices could negatively impact market returns going forward, with $4/gal gasoline as a crucial psychological breakpoint. Three months of sustained levels at $93+ WTI is a big negative. Each sustained $0.10 increase in price of gasoline = ~$14bn “tax" on the consumer. Thus, if gasoline is up $1/gallon and sustained that level for a year, the $140bn cost would effectively wipe out the benefit of OBBA tax cuts.
Non- US economies are way more dependent on the Strait of Hormuz oil exports with nearly all of it being sent to Asia. U.S. dollar decline has been a huge driver of cross asset performance over the last year until the end of February, but recent developments has begun to reverse the trend.
REITs
Within REITs, notable sector standout fundamentals as of Q42025 include Data Center, Senior Housing, and Retail REITs.
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Senior Housing REITs reported another stellar quarter, with an equally impressive 2026 outlook for mid teens NOI growth.
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Data Center REITs continued to maintaining near-zero vacancy and impressive pricing power.
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Retail REITs across the strip center, regional mall, and single-tenant formats benefited from limited new supply has kept occupancy rates near record-highs, and rent spreads in double-digits despite a slight demand moderation.
Economic Calendar: Week Ahead (Eastern Time)
Mon, 3/23 @ 10 am: Construction Spending (Delayed Report)
Tues, 3/24 @ 830 am: U.S. Productivity (Revised)
Wed, 3/25 @ 830 am: Import Price Index
Thu, 3/26 @ 830 am: Initial Jobless Claims
Fri, 3/27 @ 10 am: Consumer Sentiment (Final)
The Team Behind Friday Focus
Mary Ahn
Investment Research and Portfolio Strategy Manager
Cal Jones, CFA
Managing Director of Fixed Income
Eric Speron, CFA
Managing Director of Equities
Alton Tjahyono, CFA
Sr. Investment Strategist
