MARKET OUTLOOK
2026 Q1 MARKET OUTLOOK
Market Momentum The market has displayed resilience in the first quarter amidst evolving economic conditions. While there were significant volatility throughout 2026 so far, we view this as a reshuffling of winners rather than the end of the AI trade. Market Backdrop U.S. stocks remained stable overall, despite substantial volatility. We have seen the S&P 500 notch as much as 1.7% in intra-day decline at the end of January due to concerns over AI investment. On the other hand, U.S. 10-year Treasury yields hit a four-month high near 4.30%, reflecting ongoing uncertainty around Fed rate cuts. Gold soared 8% to record highs amidst geopolitical tensions, though precious metals have seen their biggest losses since the 1980s. • • Immutable Laws Limiting Policy Extreme International developed market government bond yields surged at the end of January, primarily driven by new U.S. tariff threats. Japan's bond selloff made headlines as yields hit record highs, yet developed markets yields generally fell back as the U.S. retracted its tariff threats on Europe. This underscored how immutable economic laws, such as the need for foreign financing of U.S. debt, Lorem ipsum semper Lorem ipsum semper Lorem ipsum semper • • Lorem ipsum semper OUR SPOTLIGHT RECIPIENT limit the extent of policy swings. We see this dynamic similar to past occurrences. Luminate’s recent trade evolved our positioning into more systematic bond strategy that has the flexibility to adapt to the ever-changing credit and rate cycle conditions. As we see these shifts take place in real time, know that our bond strategy is shifting as well to mitigate risk.
Made with FlippingBook - Share PDF online