Another Rough Week

For the major averages as they closed on double digit losses year to date. Following another rough week that saw the S&P 500 lose 135 points or 2.08%. the NASDAQ lost 700 points or 3.23%, while the DOW gave up 410 points or .9%.

Iran War

The war with Iran at 30 odd days continues to dominate the headlines. With energy shocks, both immediate and projected. Determining who actually wins is likely to prove a difficult task. Particularly prior to an accurate assessment of all the damage done to the area’s energy infrastructure. My greatest concern is the global disruption of energy supplies, both Oil and Gas/LNG. While these disruptions don’t really affect the US. They certainly do affect significant portions of the global economy. Despite all the excitement, GDP growth projections for 2026 are running around 2%, about where they were at the beginning of the year before all the shooting started. Unemployment rate projections remain unchanged: about 4.4% for 2026. But if oil/gas prices remain elevated for the rest of the year due to the conflict and Hormuz disruptions, 2026 global GDP growth would be reduced by 0.3 percentage points.

Markets and Earnings

As I write this the Dow is down 6.1% YTD, the S&P 500 is off about 7% YTD, while the NASDAQ has lost 9.9%. Bond markets have seen interest rates move higher, while the odds of rate cuts this year have diminished. Something the real estate markets won’t respond well too. This has pushed inflation fears back to center stage. Forward-looking estimates for 2026 indicate continued strength. The latest available consensus projections for S&P 500 companies’ earnings and revenues for Q1 2026 (January–March 2026) and Q2 2026 (April–June 2026) come primarily from FactSet’s Earnings Insight reports and related analyses as of mid-to-late March 2026.

Q1 2026:

Earnings (EPS) growth: Estimated at 12.5% year-over-year (down slightly from an initial estimate of 12.7% at the end of 2025, reflecting some downward revisions in recent weeks due to factors like guidance adjustments or economic concerns). Revenue growth is expected to run some 7-8% over the same period.

Q2 2026:

Earnings (EPS) growth: Estimated at around 14.9% year-over-year (consistent across multiple FactSet updates from January–February 2026, with no major recent shifts indicated in March data). While revenue growth is expected to come in around 7%.

Solid numbers to be sure. Current expectations are that earnings and revenue growth will remain strong through 2026. If, and it’s a BIG IF. The war with Iran ends fairly soon and without substantial damage to Middle East energy infrastructure.

Have a great weekend, I’ll be back next Friday.