MARKET RECAP

• Another up week, US stocks +2.13% and international stocks +2.96%.
• A big reason stocks are moving up, despite the lack of a peace settlement with Iran and the Strait of Hormuz being closed, is that earnings estimates have really been shooting higher. Look at the estimates for 2026 and 2027 below.
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MARKET RECAP

• US stocks -0.44%, international +0.53%, bonds +0.50%.
• On February 28, 2026, the United States and Israel launched a massive, coordinated military operation against Iran, codenamed Operation Epic Fury by the U.S. and Operation Roaring Lion by Israel. The assault, announced by President Trump via social media, targeted the country’s nuclear program, ballistic missile facilities, and senior leadership.

• Global Market Divergence: American equities are lagging significantly behind international markets so far this year. While the S&P 500 has remained nearly flat with a 0.60% total return, a broad index of non-U.S. stocks has climbed 11.09% over the same period.

• Japanese Market Milestone: Japan’s TOPIX reached a new historic peak this week. Since hitting a relative low in January of last year, the index has beaten the S&P 500 by more than 28 percentage points.
  

• Mortgage Rate Relief: The average 30-year fixed-rate mortgage has dipped under the 6% threshold, marking the lowest level for this borrowing cost since 2022.
  
• NVIDIA Earnings Paradox: NVIDIA reported exceptional growth, specifically noting that its data center compute revenue jumped by more than 50% compared to last year. Despite these strong figures, the stock’s price actually decreased between the market open and close following the announcement—the seventh consecutive time it has followed this post-earnings pattern.

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MARKET RECAP

• US stocks +1.27%, international +1.51%, bonds +0.23%.
• The Supreme Court ruled that Trump’s imposition of tariffs under the IEEPA was illegal. This was clearly the correct decision. The law simply does not allow a President to do whatever he wants in regards to tarriffs. Trump, of course, displayed his worst tendencies and personally attacked the Justices who ruled against his tariffs; he believes they should just support him and forget the law. Most everyone agreed with the decision, and the Justices were following the law. They deserve our respect.
• The advance estimate released this past Friday showed that U.S. GDP grew at an annualized rate of 1.4% in the fourth quarter, a significant slowdown from the 4.4% growth seen in Q3. This cooling was largely attributed to the record 43-day federal government shutdown, which analysts estimate stripped roughly one percentage point from the final growth figure.
• The FOMC minutes released this past Wednesday revealed a surprisingly hawkish shift, with several officials suggesting that interest rate hikes could return to the table if “sticky” inflation remains above the 2% target. While the committee voted 10-2 to hold rates steady at 3.50%–3.75%, the “vast majority” of participants now believe labor market risks have stabilized, allowing the Fed to prioritize fighting persistent price pressures over further rate cuts.
• The U.S. and Iran are currently in a high-stakes “final countdown” toward a new round of nuclear talks scheduled for this Thursday, February 26, in Geneva. President Trump has signaled that he may decide whether to launch limited military strikes within the next 10 days if Iran does not present a substantive proposal to dilute its enriched uranium stockpile and meet “zero-enrichment” demands.

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MARKET RECAP

• US stocks -1.26%, international +1.67%, bonds +0.86%.
• The interest rate on the 10-year treasury dropped by 18 basis points to 4.04%.
• The January jobs report, released this past Wednesday, showed a surprising burst of hiring with 130,000 jobs added, nearly double what most economists expected. Most of the gain was in healthcare stocks. The unemployment rate also ticked down slightly to 4.3%, signaling a potential shift away from the stagnant “low-hire” environment of 2025. Total job growth for last year slashed from 584,000 down to just 181,000.
• The January CPI report released this past Friday showed that inflation slowed more than expected, with the annual rate dropping to 2.4% from 2.7% in December. On a monthly basis, prices ticked up just 0.2%, driven primarily by shelter costs, while being offset by a significant 3.2% drop in gasoline prices.
• The Nasdaq 100 has been moving sideways since October, small caps are in an uptrend, and the Mag 7 is showing some weakness. Money has been rotating into energy, industrials, materials, and staples.
• Dividend stocks have outperformed growth stocks since November.
• Software stocks have been pummeled and are up less than 5% over the last five years.

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