Fixed income markets in March were shaped less by a benign disinflation narrative and more by a late-month stagflation shock tied to the war in Iran and the surge in oil prices. U.S. Treasury yields rose sharply over the month, with the two-year posting its biggest monthly increase since October 2024 and the 10-year rising by nearly 40 basis points before retracing part of the move in the final days of March (and after the April 3 payrolls report).

In March, international equity markets behaved less like a macroeconomic battleground and more like a referendum on energy security. The month’s dominant force was the escalation of the U.S.-Israeli conflict with Iran, which disrupted traffic through the Strait of Hormuz, sharply lifted Brent crude prices, and forced investors to reprice inflation, growth, and risk premiums across Europe and Asia.

U.S. stocks faced a turbulent March, despite a strong rebound on the final trading day. Over the month, the S&P 500 index declined 5.1%, the Dow Jones Industrial Average dropped 5.4%, and the Nasdaq Composite fell 4.8%. Investors spent much of March grappling with higher energy costs, renewed inflationary pressures, and persistent concerns about slowing growth.

The Portfolio is designed to invest in companies that we believe have the potential to deliver excess returns through positive economic profitability, solid balance sheets (quality), meaningful cash generation (profitability), and trading at considerable margins of safety (valuation).

The Day Hagan Catastrophic Stop model increased to 59.09% from 45.45% last week. The increase was due to improvements in Equity and High-Yield breadth indicators. (Note: Both measures would return to sell signals should the markets reverse lower.) The model indicates that investors should maintain benchmark equity exposure.

The Day Hagan Catastrophic Stop model declined to 45.45% from 50.0% last week, driven by a widening of high-yield option-adjusted spreads, which points to building market stress. However, the model remains above the critical 45% threshold, indicating that investors should maintain benchmark equity exposure.

The Day Hagan Catastrophic Stop model level declined to 50.0% as the intermediate-term trend factor turned negative. The overall model remains above the key 45% threshold, indicating that investors should maintain their benchmark equity exposure.

The Day Hagan Catastrophic Stop model, as of today, has increased to 68.18%. The model indicates that investors should maintain their benchmark equity exposure.

The Portfolio is designed to invest in companies that we believe have the potential to deliver excess returns through positive economic profitability, solid balance sheets (quality), meaningful cash generation (profitability), and trading at considerable margins of safety (valuation). We believe these factors will continue to provide rational opportunities for the foreseeable future.

In February, rates markets were driven by a mix of softer inflation data, a slower but still expanding labor market, and heavy Treasury supply. The January CPI report, released on February 13, showed a 0.2% month-over-month rise and 2.4% year-over-year inflation, keeping the disinflation narrative intact.

International equities in February responded to uneven G20 growth data, steady but moderating inflation, and stable global rate expectations. Flash PMIs released during the month showed services activity continuing to anchor expansion across much of the developed world. The euro area composite index remained slightly above 50, driven by services, while manufacturing stayed weak.

In February, the U.S. stock market was shaped by a combination of Federal Reserve policy signals, mixed economic data, and pronounced sector rotation that reflected shifting investor expectations about growth and interest rates. 

The Day Hagan Catastrophic Stop model, as of today, has increased to 68.18%. The model indicates that investors should maintain their benchmark equity exposure.

The Day Hagan Catastrophic Stop model held steady at 59.09%. The model continues to indicate that investors should maintain their benchmark equity exposure.

The Smart Core Equity Portfolio is designed to invest in companies that we believe have the potential to deliver excess returns through positive economic profitability, solid balance sheets (quality), meaningful cash generation (profitability), and trading at considerable margins of safety (valuation). We believe these factors will continue to provide rational opportunities for the foreseeable future.

International equities broadly outpaced U.S. stocks in January, with markets outside the U.S. advancing at a stronger relative pace than major U.S. benchmarks. Developed foreign markets in Europe and the Pacific generally saw more pronounced gains, while emerging markets also started the year strongly, benefiting from a softer dollar and global diversification flows.

Entering February, global fixed-income markets are navigating a "mid-to-late-cycle" environment characterized by a transition from aggressive policy easing to a more measured, data-dependent approach. For U.S. investors, the primary narrative is the bear steepening of the yield curve.

U.S. equities entered 2026 with a mixed but generally constructive tone, and beneath a relatively calm headline index, the 11 cap-weighted S&P 500 sectors told a story of rotation rather than runaway risk‑on. Technology and Communication Services remained in the spotlight as investors continued to bet on artificial intelligence and cloud infrastructure, but leadership was less one-sided than in 2025.

The Day Hagan Catastrophic Stop model held steady at 59.09%. The model continues to indicate that investors should maintain their benchmark equity exposure. Many of our indicators are situated near neutral levels. If the current decline (the SPX is just 2.3% below the all-time high) shows signs of becoming significant, our indicators are poised to signal risk-off.

The Day Hagan Catastrophic Stop model held steady at 59.09%. The model continues to indicate that investors should maintain their benchmark equity exposure.