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BIAS Investors, Wessex House/Fourth Floor/45 Reid Street, Hamilton (2026)

08/06/2026

🏦 Hot Jobs

Better than expected job growth put an end to the equity market’s winning streak last week. For the week, the S&P 500 Index was -2.5%, the Dow Jones Industrials -0.2%, and the NASDAQ -4.5%. The Energy, Health Care, and Real Estate sectors led the S&P 500 Index for the week, while the Consumer Discretionary, Technology, and Communications Services sectors lagged. The 10-year U.S. Treasury note yield was 4.546% at Friday’s close versus 4.439% the previous week.

The May Employment Situation report showed a net gain of 172,000 jobs versus an expectation of 96,000 jobs. April jobs were revised up by 64,000 to 179,000 from 115,000 and March jobs were revised up by 29,000 to 214,000 from 185,000. The May unemployment rate was unchanged at 4.3%. This strength in the labor market increases the likelihood the Federal Reserve can remain patient on any monetary policy changes and possibly increase rates later this year if both labor market strength and inflation persist. This helped trigger the Friday selloff in the equity market.

We should get a clearer sense of monetary policy direction when the Federal Reserve publishes its updated Summary of Economic Projections at the June 17th FOMC meeting. Current CME Fed funds futures show the potential for a 0.25% increase at the October FOMC meeting.

The first quarter earnings should close out with a year-over-year gain of 28.8% and revenue growth of 11.8%. This week two companies are scheduled to report results. Second quarter earnings are expected to grow by 21.7% and quarterly revenue growth is expected at 12.0%. Full-year 2026 earnings are expected to grow by 22.8% with revenue growth of 10.8%.

Next, we look at factors of labor market stability.

🏦 Dissecting Headlines: Labor Market Analysis

Strength in the labor market may seem confusing as headline concerns of tariff uncertainty and AI-induced layoffs would point to much weaker job creation. That felt like the case in February when the initial employment report saw a net loss of 92,000 jobs and was later revised lower to a net loss of 156,000 jobs. Starting in March, the labor market improved and the past three months have seen strong job growth of 214,000 in March (revised up from an initial 178,000), 179,000 in April (revised up from 115,000), and now 172,000 jobs in May.

The monthly jobs data is always “net jobs”, meaning the net of job losses and new hires. The environment has been described as “low hire, low fire”, so the impact of new job growth appears stronger in a low job loss scenario. Layoffs have been relatively lower, workers quitting jobs has declined, and older workers are not retiring at the same rate. At the same time, we are seeing steady hiring in several sectors to include health care where there is a structural need for workers due to aging population. May also saw an increase in leisure and hospitality and anecdotal evidence from Federal Reserve surveys point to both a resilient consumer and anticipated hiring ahead of the FIFA World Cup. Local government hiring was also a source of strength in May and can be attributable to a post-pandemic shortage of municipal worker positions now being filled and population growth in the southern states requiring more local government workers.

A last element may be “unretirement”, Americans over the age of 55 either delaying retirement or returning to work for economic reasons, as well as longer life expectancy and sense of purpose. This is a post-pandemic trend for some workers that may have taken early retirement or forced out of work during the pandemic period coming back into the labor market.

These factors have combined to create a labor market that has shown resiliency the past few months.
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Licensed to conduct Investment business by the Bermuda Monetary Authority
Licensed by the Cayman Islands Monetary Authority to conduct Investment business
Registered Advisor with the U.S. Securities and Exchange Commission

04/06/2026

🏦 Confidence Counts

Equities continued their ascent as bond yields and gasoline prices retreated last week. For the week, the S&P 500 Index was +1.4%, the Dow Jones Industrials +0.9%, and the NASDAQ +2.9%. The Technology, Consumer Discretionary, and Materials sectors led the S&P 500 Index for the week, while the Energy, Consumer Staples, and Utility sectors lagged. The 10-year U.S. Treasury note yield was 4.439% at Friday’s close versus 4.554% the previous week.

The American Automobile Association (AAA) reported the national average price for regular unleaded gasoline is currently $4.336/gallon. This is 4.0% lower than a week ago, but 37.6% higher year-over-year. Gasoline prices have been a major focus for consumers since prices began rising in March at the onset of the conflict with Iran.

The April Personal Consumption Expenditures (PCE) Price Index was +0.4% month-over-month and +3.8% year-over-year. Excluding food and energy prices, core PCE was +0.2% month-over-month and +3.3% year-over-year. This inflation reading, along with labor market data, will be key items the Federal Reserve considers when it evaluates monetary policy at the June Federal Open Market Committee meeting. We will see labor market data on Friday with the release of the May Employment Situation report. Current CME Fed funds futures show no change in interest rates at the June through October meetings, and a near even split for no change or a 0.25% increase at the December meeting.

The first quarter earnings reporting period is essentially complete, with 97% of companies having already reported. This week 11 companies are scheduled to report results. First quarter earnings are expected to grow by 28.6% and quarterly revenue growth is expected at 11.8%. Full-year 2026 earnings are expected to grow by 22.6% with revenue growth of 10.7%.

Next, we look at the current state of the consumer.

🏦 Dissecting Headlines: Consumer Confidence

The health and confidence of the consumer is a vital component of economic growth. Higher interest rates and, more recently, higher gasoline prices have tested the spending ability of the consumer.

The May Consumer Confidence report showed a decline in the index to 93.1 from an upwardly revised 93.8 in April. This is higher than the start of the year when the January reading was 89.0. Since then, gasoline prices have increased 53.8% to the current $4.322 per gallon average nationwide.

One element that has aided the consumer in the first half of 2026 has been larger than normal income tax refunds as a result of the One Big Beautiful Bill. The IRS reports that the average refund this filing season has been $3,268 versus $2,945 last year. The larger refunds reflect over withholding due to the change being made in mid-2025. Tax payers should also be seeing lower current withholdings and higher relative take-home pay currently.

Still, many consumers are feeling the pressure of higher prices. As part of the May Consumer Confidence report, two-thirds of consumers cited cutting back on spending overall due to rising prices. Those who are cutting back said they bought fewer items and delayed expensive purchases. Items where consumers are cutting back include clothing and footwear, hobby items, and games/toys.

A resolution to the conflict with Iran and lower energy prices would go a long way toward improving consumer confidence.
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Licensed to conduct Investment business by the Bermuda Monetary Authority
Licensed by the Cayman Islands Monetary Authority to conduct Investment business
Registered Advisor with the U.S. Securities and Exchange Commission

26/05/2026

🏦 Summer Spend

Equity markets rose heading into the Memorial Day weekend, helped by continued earnings strength and a modest retreat in bond yields. For the week, the S&P 500 Index was +0.9%, the Dow Jones Industrials +2.2%, and the NASDAQ +1.2%. The Utility, Health Care, and Real Estate sectors led the S&P 500 Index for the week, while the Communication Services, Consumer Staples, and Energy sectors lagged. The 10-year U.S. Treasury note yield was 4.544% at Friday’s close versus 4.595% the previous week.

Minutes from the April Federal Open Market Committee (FOMC) meeting showed Fed officials viewed economic expansion positively, but the energy-driven inflation concerns have overshadowed most of the discussion around monetary policy. The new Fed Chair, Kevin Warsh, will preside over the June FOMC meeting. Between now and the mid-June meeting, we should see reports on April Personal Consumption Expenditure prices, a revision on first quarter Gross Domestic Product, the May employment situation, and the May Consumer and Producer Price Indices.

The first quarter earnings reporting period is almost complete, with 94% of companies having already reported. This week 18 companies are scheduled to report results. First quarter earnings are expected to grow by 28.4% and quarterly revenue growth is expected at 11.6%. Full-year 2026 earnings are expected to grow by 22.1% with revenue growth of 10.4%.

Next, we look at the impact of higher prices on Memorial Day travel.

🏦 Dissecting Headlines: Memorial Day Travel

The American Automobile Association (AAA) projected that 45 million Americans would be traveling greater than 50 miles from home for the Memorial Day holiday. This is a 0.4% increase from last year. The majority, 39.12 million, were expected to travel by car, despite higher gas prices year-over-year. Air travel was estimated at 3.66 million and other transportation to include bus, train, and cruise were estimated at 2.22 million.

Gasoline prices are likely having a strong impact on travel budget decisions. AAA reported national average price for regular unleaded gasoline at $4.515 per gallon. This is 41.7% higher year-over-year and represents the highest Memorial Day weekend gasoline prices since 2022 when regular unleaded was $4.596 per gallon. Gasoline prices later peaked at all-time highs of $5.016 per gallon by mid-June of that year.

Air travel purchased well in advance averaged approximately 6.0% lower year-over-year, but recently purchased airfares were sharply higher due to increases in jet fuel prices. Hotel prices were 3% to 8% higher year-over-year depending on destination, with resort markets at the higher end of the range and urban markets at the lower end.

Food prices were also higher for holiday cookouts. Ground beef prices were 20.0% higher year-over-year, while beef hot dog prices increased 12.0%. There was some mild relief in boneless chicken breasts with prices 0.2% lower. Most condiments and toppings were greater than 10.0% higher year-over-year.

Depending on progress toward resolving the current hostilities in the Middle East and restoring oil flows from the region, price pressures could persist further into the summer season.
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Licensed to conduct Investment business by the Bermuda Monetary Authority
Licensed by the Cayman Islands Monetary Authority to conduct Investment business
Registered Advisor with the U.S. Securities and Exchange Commission

18/05/2026

🏦 Pan-Pacific Pragmatism

The U.S. – China Summit pointed to trade stabilization between the two countries, but higher energy prices kept a lid on market advances last week. For the week, the S&P 500 Index was +0.2%, the Dow Jones Industrials -0.1%, and the NASDAQ -0.3%. The Energy, Consumer Staples, and Technology sectors led the S&P 500 Index for the week, while the Consumer Discretionary, Real Estate, and Materials sectors lagged. The 10-year U.S. Treasury note yield was 4.595% at Friday’s close versus 4.370% the previous week.

Inflation has remained elevated due to energy prices. The April Consumer Price Index (CPI) showed prices 0.6% higher month-over-month and core CPI, which excluded the impact of food and energy prices, was +0.4% month-over-month. On a year-over-year comparison, CPI was +3.8% and core CPI was +2.8%.

Kevin Warsh has been confirmed as the new Chairman of the Federal Reserve. Warsh’s first Federal Open Market Committee (FOMC) meeting will be June 16 – 17th and the FOMC should publish an updated Summary of Economic Projections at the meeting. This should highlight monetary policy expectations for the remainder of the year.

We move into the final leg of the quarterly earnings reporting period with 91% of companies having already reported. This week 18 companies are scheduled to report results. First quarter earnings are expected to grow by 27.7% and quarterly revenue growth is expected at 11.4%. Full-year 2026 earnings are expected to grow by 21.5% with revenue growth of 10.3%.

Next, we look at the business outcomes of the U.S.—China Summit.

🏦 Dissecting Headlines: U.S. – China Summit

President Trump traveled to China last week to meet with Chinese President Xi. In addition to U.S. government officials, the delegation included executives from major U.S. companies to include Apple, Blackrock, Blackstone, Boeing, Cargill, Cisco, Citigroup, Coherent, GE Aerospace, Goldman Sachs, Illumina, Mastercard, Meta, Micron Technologies, Nvidia, Qualcomm, Tesla, and Visa, seeking to expand business opportunities in China.

The most significant business announcements included China agreeing to purchase 200 Boeing aircraft and related engines from GE Aerospace. China also pledged to expand purchases of U.S. agricultural products by $17 billion per year through 2028 for corn, soybeans, pork, poultry, beef, and other commodities. Combined with prior soybean commitments, this would bring total annual agricultural purchases from China to around $27 billion.

Discussions also included the potential for increased U.S. LNG and other energy exports to China, expanded access for financial services firms, and continued dialogue for cooperation in various technology areas to include artificial intelligence and semiconductors.

Beyond the aerospace and agricultural commitments, other discussions were an effort to re-start business dialogues between the countries. The broad takeaway from the summit regarding business and economics is an effort from both sides to be pragmatic toward sector-by-sector discussions where cooperation is a better course of action and acknowledgement that it is necessary for the two countries to be rivals in other sectors where the countries compete.
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Licensed to conduct Investment business by the Bermuda Monetary Authority
Licensed by the Cayman Islands Monetary Authority to conduct Investment business
Registered Advisor with the U.S. Securities and Exchange Commission

04/05/2026

🏦 The Earnings Strike Back

Strength in quarterly earnings reports pushed stocks higher. For the week, the S&P 500 Index was +0.9%, the Dow Jones Industrials +0.5%, and the NASDAQ +1.5%. The Communication Services, Energy, and Consumer Staples sectors led the S&P 500 Index for the week, while the Materials, Technology, and Industrial sectors lagged. The 10-year U.S. Treasury note yield was 4.383% at Friday’s close versus 4.303% the previous week.

The Federal Reserve held short-term interest rates steady at its April policy meeting. Fed Chair nominee Kevin Warsh has passed the Senate Banking Committee and is set for a full Senate confirmation vote next week. This would put him in position to preside over the next Federal Open Market Committee (FOMC) meeting in mid-June when the FOMC should publish its updated Summary of Economic Indicators to set its policy path for the second half of the year.

First quarter Gross Domestic Product (GDP) growth was 2.0% versus expectation for 2.1% and versus 0.5% last quarter. Business investment contributed to more than half the growth with the Information Processing Equipment category contributing 83 basis points of the overall 200 basis points of GDP growth. Exports were strong, but imports were stronger creating a negative impact on Net Exports.

With 64% of companies in the S&P 500 Index already reported, the quarterly earnings reporting period continues this week with another 126 companies scheduled to report results. First quarter earnings are expected to grow by 27.1% and quarterly revenue growth is expected at 11.1%. Full-year 2026 earnings are expected to grow by 20.6% with revenue growth of 9.7%. Earnings growth expectations have taken a large move up since the reporting period began in early April.

Next, we take another look at the year-to-date revisions in earnings growth for the S&P 500 Index.

🏦 Dissecting Headlines: Earnings Revisions

Last week, we wrote about how the shift in focus from geopolitical events to first quarter earnings results has been a strong contributing factor to the market recovery in April. Expectations for earnings growth took another step forward last week following earnings results from several Mega cap companies that raised both the expectation for first quarter growth and growth for the year.

With 63% of companies reported in the S&P 500 Index, the consensus estimate for the first quarter earnings growth has increased to 27.1% versus 15.1% the week prior and versus 13.0% at the end of March just prior to the reporting period beginning. Revenue growth for the first quarter has also increased to 11.1% versus 10.3% the week prior and 9.7% at the end of March.

Expectations for full-year 2026 earning have also taken another move up. The current expectation for S&P 500 Index earnings growth for 2026 is 20.6% versus 18.6% the week prior and 17.1% at the end of March. Revenue growth expectations for the year have also increased to 9.7% versus 9.5% the week prior and 8.6% at the end of March.

It reminds us of the Warren Buffet quotes that builds on Benjamin Graham’s work, “In the short run, the market is a voting machine…but in the long run, it is a weighing machine.”
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Licensed to conduct Investment business by the Bermuda Monetary Authority
Licensed by the Cayman Islands Monetary Authority to conduct Investment business
Registered Advisor with the U.S. Securities and Exchange Commission

27/04/2026

🏦 Earnings Run

The S&P 500 Index closed at a record high last week as positive earnings reports have taken investor focus off events in the Middle East. For the week, the S&P 500 Index was +0.6%, the Dow Jones Industrials -0.4%, and the NASDAQ +2.4%. The Energy, Technology, and Consumer Staples sectors led the S&P 500 Index for the week, while the Health Care, Financials, and Real Estate sectors lagged. The 10-year U.S. Treasury note yield was 4.303% at Friday’s close versus 4.244% the previous week.

The Federal Reserve meets this week for its April policy meeting. While the Fed is widely expected to leave interest rates unchanged, the future of the Fed will be in focus. The Department of Justice dropped its criminal investigation into Jerome Powell over the cost overruns tied to Federal Reserve building renovations. This removes a major obstacle to getting Kevin Warsh confirmed as the next Fed Chairman. Warsh’s nomination can now move through the Senate Banking Committee and toward a full Senate vote. There is a chance the confirmation can be completed by the time Powell’s term ends in mid-May, making this his last policy meeting as the Fed Chairman.

Another key item on the economic calendar this week is the advanced report on first quarter Gross Domestic Product (GDP) growth. We can get visibility into the impact of energy prices, tariffs, and AI-driven capital spending on economic growth.

The quarterly earnings reporting period continues this week with 181 companies in the S&P 500 Index scheduled to report earnings results. First quarter earnings are expected to grow by 15.1% and quarterly revenue growth is expected at 10.3%. Full-year 2026 earnings are expected to grow by 18.6% with revenue growth of 9.5%.

In our Dissecting Headlines section, we look at the year-to-date revisions in earnings growth for the S&P 500 Index.

🏦 Dissecting Headlines: Earnings Revisions

One supporting reason for the quick stock market recovery from the March lows is the focus on earnings and earnings growth. Expectations for earnings growth, both in the first quarter and for full year 2026, began rising in late February when we were seeing 2025 year-end reports and 2026 outlooks. That focus took a back seat once the earnings season ended and the conflict with Iran began. Despite the impact of the conflict on energy prices and global trade, earnings projections for the S&P 500 Index have continued to rise.

Current estimates for the first quarter are 15.1% earnings growth and 10.3% revenue growth versus 13.0% earnings growth and 9.7% revenue growth a month ago. Expectations for full-year 2026 are currently 18.6% earnings growth and 9.5% revenue growth versus 17.1% earnings growth and 8.6% revenue growth a month ago.

Only 28% of companies have reported first quarter earnings, so there can still be a mix of upward and downward revisions contributing to the overall outlook. In particular, five of the Magnificent Seven stocks are scheduled to report earnings this week, so we are at a high impact time in the earnings reporting cycle.

While the ceasefire in Iran has not yet led to a peace deal, investors are choosing to focus on earnings results currently while they were instead focused on conflict a month ago. This can be seen in the American Association of Individual Investors (AAII) Sentiment Survey which has risen to a 46.0% Bullish outlook versus a recent low of 30.4% on March 18th when the conflict in Iran was highly active and earnings reports were in a lull. The long-term average for Bullish sentiment is 37.5%, so we have seen a sharp rebound in sentiment along with stock prices over the past month.
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Licensed to conduct Investment business by the Bermuda Monetary Authority
Licensed by the Cayman Islands Monetary Authority to conduct Investment business
Registered Advisor with the U.S. Securities and Exchange Commission

21/04/2026

Equities rose to new highs on the back of positive news in the Middle East. That may be tested this week as the conflict remains unsettled heading into the expiration of the two-week ceasefire. For the week, the S&P 500 Index was +4.5%, the Dow Jones Industrials +3.2%, and the NASDAQ +6.2%. The Technology, Consumer Discretionary, and Communication Services sectors led the S&P 500 Index for the week, while the Energy, Utility, and Materials sectors lagged. The 10-year U.S. Treasury note yield was 4.244% at Friday’s close versus 4.319% the previous week.

The March Producer Price Index (PPI) showed headline inflation +0.5% month/month and core PPI (ex food and energy) was +0.2% month/month. On a year/year comparison, PPI was +4.0% and core PPI was +3.6%.The main item causing the steep monthly rise was energy which was 8.5% higher month/month.

Confirmation hearings for the next Federal Reserve chairman begin this week. The Federal Reserve is likely to take no action on interest rates at its April policy meeting, but the policy path for the year could be shaped once a new chairman takes the helm. Current CME Fed funds futures show no changes to short-term interest rates for the remainder of the year.

The quarterly earnings reporting period begins this week with 93 companies in the S&P 500 Index scheduled to report earnings results. First quarter earnings are expected to grow by 13.2% and quarterly revenue growth is expected at 9.9%. Full-year 2026 earnings are expected to grow by 18.0% with revenue growth of 9.2%.

Next, we look at the forecasts for global economic growth.

The International Monetary Fund (IMF) recently cut its 2026 global growth forecast to 3.1% from 3.3% primarily due to the ongoing U.S. – Iran conflict and resulting energy price spikes and supply disruptions on global markets.

The current 3.1% baseline growth forecast assumes a short-lived, limited-scope conflict with moderate (approx. 19%) rise in energy prices and disruptions fading by mid-year. It expects global headline inflation to rise modestly to 4.4% in 2026 before declining in 2027.

A more adverse scenario with a sharper energy price surge, rising inflation expectations, and some tightening of financial conditions would reduce growth to 2.5% and raise inflation to 5.4%. A severe scenario with energy dislocations persisting into 2027, unanchored inflation expectations, and a resulting sharp financial tightening would drop growth to 2.0% in both 2026 and 2027 and inflation exceeding 6.0%. The IMF noted that every additional day of energy supply disruptions moves the outlook closer to the weaker 2.5% growth path.

While the outlook remains uncertain, neither the current baseline scenario nor the more adverse potential outcomes put the global economy at risk of extreme contraction as seen during the 2020 COVID-19 pandemic’s 3.1% economic contraction or the 0.1% contraction in 2009 from the global financial crisis.

Current major country and regional outlooks for economic growth are the U.S. at 2.3%, Europe at 1.1%, Japan at 0.7%, China at 4.4%, India at 6.5%, Russia at 1.1%, Brazil at 1.9%, and Saudi Arabia at 3.1%. Perhaps some of the underlying strength in the U.S. equity market can be attributed to strong underlying growth despite the current headline risk of the U.S. – Iran conflict.

Licensed to conduct Investment business by the Bermuda Monetary Authority
Licensed by the Cayman Islands Monetary Authority to conduct Investment business
Registered Advisor with the U.S. Securities and Exchange Commission

15/04/2026

Equities rose sharply last week on the U.S. – Iran ceasefire announcement, but unsuccessful talks in Pakistan over the weekend bring back uncertainty. For the week, the S&P 500 Index was +3.6%, the Dow Jones Industrials +3.1%, and the NASDAQ +4.5%. The Communication Services, Consumer Discretionary, and Technology sectors led the S&P 500 Index for the week, while the Energy, Health Care, and Consumer Staples sectors lagged. The 10-year U.S. Treasury note yield was 4.319% at Friday’s close versus 4.304% the previous week.

The March Consumer Price Index (CPI) showed headline inflation +0.9% month/month and core CPI (ex food and energy) was +0.2% month/month. On a year/year comparison, CPI was +3.3% and core CPI was +2.6%.The main items causing the steep monthly rise were energy commodities with gasoline prices 21.2% higher for the month and fuel oil 30.7% higher.

The Federal Reserve is likely to take no action on interest rates at its April policy meeting as it evaluates the impact of the U.S.—Iran conflict on the economy. Current CME Fed funds futures show no changes to short-term interest rates for the remainder of the year.

The quarterly earnings reporting period begins this week with 28 companies in the S&P 500 Index scheduled to report earnings results. First quarter earnings are expected to grow by 12.6% and quarterly revenue growth is expected at 9.8%. Full-year 2026 earnings are expected to grow by 17.6% with revenue growth of 9.0%.

Next, we look at the Volatility Index as a mirror of market sentiment.

When it feels like financial markets can turn on a dime based on global news flow, one way to take the market’s pulse is the Volatility Index, or VIX. The VIX is a measure of investor expectations of market volatility over the next 30-days. The VIX was created by the Chicago Board Options Exchange (CBOE) and is derived from prices of S&P 500 Index options. The VIX is sometimes referred to as the Fear Gauge because when it rises this reflects rising investor fear, or pessimism, on the direction of the market.

Between the February 27th start of hostilities with Iran to the announcement of the ceasefire on April 7th, the VIX rose from 19.86 to 25.78, and it had been as high as 31.05 at its peak during the period. The long term average for the VIX, indicating a “normal” market, is the 19 to 20 range. The VIX ended last week at 19.23, back in the normal range, but elevated tensions over a breakdown in U.S.—Iran talks over the weekend and a coming blockade of the Strait of Hormuz could elevate volatility this week.

To put current events in context, the VIX rose to 89.5 in October 2008 during the Global Financial Crisis, 82.7 during the March 2020 COVID shutdown, 50.0 during the February 2018 volatility spike, 49.0 during the May 2010 Flash Crash, and 49.0 when the markets re-opened after the September 11th Attacks. Volatility can sometimes be caused by financial events and sometimes by geopolitical events.

The VIX does fall once the crisis passes, so the indicator can often be a contrarian signal, meaning that it is advantageous to buy when fear is high to benefit from the post-crisis recovery.

Licensed to conduct Investment business by the Bermuda Monetary Authority
Licensed by the Cayman Islands Monetary Authority to conduct Investment business
Registered Advisor with the U.S. Securities and Exchange Commission

08/04/2026

Equities stemmed their five-week decline last week. For the week, the S&P 500 Index was +3.4%, the Dow Jones Industrials +3.0%, and the NASDAQ +4.0%. The Communication Services, Technology, and Real Estate sectors led the S&P 500 Index for the week, while the Energy, Consumer Staples, and Utility sectors lagged. The 10-year U.S. Treasury note yield was 4.304% at Friday’s close versus 4.435% the previous week.

The war with Iran continues to influence energy and other financial markets. Several countries are working on mediation efforts between the U.S. and Iran. There is currently a Tuesday deadline imposed by the U.S. on Iran opening the Strait of Hormuz.

The March Employment Situation report showed a net gain of 178,000 jobs versus an expectation of 65,000 jobs. Stability in the labor market coupled with an uncertain outlook on inflation due to higher energy prices likely has the Federal Reserve on hold regarding interest rates until either factor changes. We should see two inflation data points this week with the February Personal Consumption Expenditures (PCE) Price Index scheduled for release on Thursday and the March Consumer Price Index (CPI) scheduled for release on Friday. Current CME Fed funds futures show no changes to short-term interest rates for the remainder of the year.

This week three companies in the S&P 500 Index are scheduled to report quarterly earnings. The first full week of earnings reporting starts next week. First quarter earnings are expected to grow by 13.2% and quarterly revenue growth is expected at 9.7%. Full-year 2026 earnings are expected to grow by 17.4 % with revenue growth of 8.8%.

Next, we look at expectations for first quarter earnings.

For the first quarter of 2026, S&P 500 Index earnings growth is currently forecast at +13.2%. Data from FactSet shows nine of the eleven sectors are forecast to show year-over-year earnings growth. The Technology sector is expected to have the highest year-over-year growth at +45.1%, followed by the Materials sector at +23.9%, and the Financial sector at +15.1%. Rounding out the growing sectors are Utilities at +9.9%, Energy at +8.9%, Real Estate at +3.7%, Industrials at +3.2%, Consumer Discretionary at +1.8%, and Consumer Staples at +1.6%. The two sectors expected to show a decline in year-over-year earnings are Communication Services at -3.6% and Health Care at -8.7%.

First quarter revenue growth for the S&P 500 Index is currently forecast at +9.7%. The highest revenue growth is expected in the Technology sector at +27.4%, followed by Communication Services at +12.7%, and Financials at +10.0%. All eleven sectors are forecast to show year-over-year revenue growth. The remaining eight sectors are Utilities at +9.4%, Consumer Discretionary at +8.5%, Consumer Staples at +6.8%, Real Estate at +6.7%, Health Care at +5.9%, Industrials at +5.8%, Materials at +5.2%, and Energy at +1.6%.

The actual earnings results for companies and sectors relative to these expectations, along with their future outlooks, are key determinants of price performance. War in the Middle East has dominated headlines over the past few weeks and the quarter earnings discussions are likely to also be dominated by questions about the impact of the conflict and higher energy prices on many companies. Other key discussion points are likely to be capital spending and implementation of AI, hiring and work force reduction trends, the impact of tariffs and trade, and the health of the consumer.

Licensed to conduct Investment business by the Bermuda Monetary Authority
Licensed by the Cayman Islands Monetary Authority to conduct Investment business
Registered Advisor with the U.S. Securities and Exchange Commission

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