Market Update for April 22, 2026

The S&P 500 has done exceptionally well the past few weeks, bottoming for the year-to-date period in the low 6,300s on March 30th, only to explode up north of 7,100 as of April 17th.  It was over a 12% move to the upside in about 13 trading sessions - not unheard of historically, but an extremely strong period. We remain near that 7,100 level as I write this post on the evening of April 21st.

With all that said, I do not think much has changed.  For one, I would expect to give back something like ½ of that move in the coming weeks - rarely are moves like that sustained indefinitely without some "backfilling" on the chart.  Essentially, one step back for the two steps we just took forward.  And two, I cannot see why I would turn bullish just based on higher prices.  Iran remains unresolved and I refuse to position monies based on the current rumor related to the opening or closing of the strait of Hormuz.  That is a game people are currently playing, but not one I want to be any part of.

I am listening to the market tell me that companies are doing just fine and earnings are chugging along well.  That is the takeaway from the recent uptick, because with all of the bad news in 2026, we could be - perhaps even should/deserve to be - much lower than we are.  Things certainly tend to shake out to the upside over time, and as I've mentioned many times it is easier to point out the current scary problems than it is the good news under the surface.

Think about your significant other.  One or two things probably bug you about their personality or habits, but there are 20 other things you love about them or else they wouldn't BE your significant other.  The stock market can work similarly.  The news is often pointing out the negatives, and as Chuck used to note, "if it bleeds, it leads."  But our legal structure is strong.  Our corporate tax rate is low.  Our companies are run efficiently and are the envy of the rest of the world.  AI may be displacing jobs, but it is also increasing productivity in every major company in the US.

I remain circumspect about the prospects of the stock market's substantial advance this year.  I still would note the level 6,890 from October 29, 2025: the closing S&P 500 level on the day of the second Fed rate decrease in the last cycle (that cycle appears to have capped out at three total rate reductions, incidentally).  At 7,064 the S&P 500 is about 2.5% above that level, and it is nearly 6 months hence.  The 10-year US Treasury paid coupons of about 2% over that same period- the takeaway is that of late both stocks and bonds have performed positively, but only marginally so.

I have made numerous changes since the fall to make things more conservative for clients, especially those who are in retirement and closer than ever to using the corpus they've saved.  With that said, nearly all of my clients retain some exposure to stocks, either intentionally or just by nature of the products we hold.  Many of my clients have some form of "balanced" investing within their portfolios, and that is a mix of stocks, bonds and some cash.  Collectively, my clients' largest balanced mutual fund (American Balanced "C" shares) is +3.69% net of fees year-to-date.  In this wacky world, I am fine with that type of return, especially in under 4 months' time.

In summary, I would expect 2027 to outperform 2026, and by my way of thinking and portfolio positioning, muddling through the coming handful of months before markets improve thereafter would be my base case expectation.  International stocks would offer an aggressive way to hedge against the domestic stock market, and bonds would represent a more conservative hedge.  I would sparingly use small-cap stocks, if at all, and for various reasons would steer clear of oil and precious metals markets, though the latter is more tempting between the two.  As always, contact me directly if I can be of any personal help.

And keep the faith!  Faith is the spirit.