Daily Commentary

MarketMinder’s View: Does this tell investors anything they don’t already know—and that markets haven’t already priced? “[T]he IMF presented three growth scenarios: weaker, worse and severe, depending on how the war unfolds. Under the IMF’s worst-case outlook, the global economy teeters on the brink of recession, with oil prices averaging $110 a barrel in 2026 and $125 in 2027. The IMF chose the most benign scenario for its World Economic Outlook ‘reference forecast,’ which assumes a short-lived conflict and oil prices normalizing in the second half of 2026, with an $82 per-barrel average for the year—well below Tuesday’s benchmark Brent crude futures price of around $96.00.” As for the middle “worse” path, the IMF envisions a longer conflict with oil staying around $100 and global GDP growth of 2.5% this year instead of the benign scenario’s 3.1%. But even in the “severe” adverse scenario the IMF is leaning to, it still projects 2.0% growth, which doesn’t seem to square with “the brink of recession,” as the article claims. A few things for investors. First, forecasts are only ever opinions—the IMF’s imprimatur doesn’t make theirs any more valid than others even if it helps garner more headlines. Second, the range of scenarios offered here—and waffling between them—shows how imprecise the prediction game is. But third, that doesn’t mean they don’t have value for investors because “official” forecasts/opinions color sentiment, which is where the chief economist’s warning that the adverse scenario looks increasingly likely comes in. The more airing this opinion gets, the more you know markets have dealt with it, which is noteworthy considering the S&P 500 and MSCI World Index regained pre-war highs Wednesday. It looks to us like stocks have spent the past month and a half dealing with worst-case scenario projections and then moving on despite all the ceasefire and blockade twists and turns.

MarketMinder’s View: To cut through the noise as you assess stocks’ journey back to pre-war highs, focus on forward-looking fundamentals. To wit: “Investors are seizing on what they see as a solid economic backdrop, in particular a strong outlook for corporate profits that has actually improved since the war began. ... S&P 500 companies are expected to increase earnings by 19% in 2026, up from an expected 15% increase just before the war began, according to LSEG IBES.” That said, we also see several misperceptions presented here that add to the clutter. The article touts the S&P 500’s lower 12-month forward price-to-earnings (P/E) ratio making “stocks look more enticing,” but valuations have no bearing on forward returns, and the drop mostly reflects stocks’ brief downturn—past performance. Past performance doesn’t predict. Fluctuating valuations reflect short-term sentiment more than earnings fundamentals. Meanwhile, future profit projections are among the most analyzed and studied metrics on Wall Street—markets continually factor them in. How reality eventually compares to that baseline is what drives markets most over time—not expectations alone. Higher oil prices’ being auto-bearish is another ill-conceived notion. For households and most businesses, higher energy costs are negative. But from a market perspective, energy spending is still spending—feeding into economic growth. This also feeds into why oil doesn’t drive inflation, which is caused by too much money chasing too few goods and services. With money supply growth at tame pre-pandemic rates, higher gas prices mostly force substitution, reducing demand for other goods and services that presses other prices down. Higher yields from “oil-driven inflation” is a false fear, never mind that yields don’t drive equity performance, either. Nor do Fed rate cuts, also cast here as a positive stocks will now miss out on this year. To us, the deep pile of misperceptions shows why the wall of worry stocks climb has more to go.

MarketMinder’s View: Tax Day is over now—until next year. And with that weight lifted, here is some timely advice for a fresh beginning for your finances. The article segments its advice into generational cohorts (Gen Z, Millennials, Gen X and Boomers) but it can apply to all age groups. For example, younger folks may get more mileage moving their rainy-day funds into high-yield accounts and cutting back on unused subscriptions, but that can really be anybody. Same with shopping around for insurance and right-sizing your W-4 withholding. For those on the more senior end of the spectrum, trying to max out your retirement contributions and consolidate wayward accounts from prior employers may make more sense, but again that is something everyone can aspire to. Lastly, we think the sooner you undertake financial and estate planning the better, which includes keeping your beneficiary designations up to date. Anything can happen, and the more you prepare for the worst if and when it comes to pass, the more ease your loved ones will have dealing with your finances when it may be hardest. This is just a cursory smattering of the main tips covered, so read on for more—and more details—to help keep your financial house in order.