Author: Massimo Santicchia

14 Jul Global Equity Outlook

Posted at 12:49h in Market Commentary by Massimo Santicchia

Selective Strength, Steady Conviction

The reflationary backdrop that favored value, cyclicals, and emerging markets earlier this year remains intact. Growth is expanding, inflation is firm, risk appetite is healthy, and the yield curve is positive and steepening. These are the conditions that have historically rewarded economically sensitive positioning.

What has changed is how the opportunity is being expressed. The broad regional posture has not shifted: the allocation remains overweight US equities, with meaningful developed international and emerging market exposure. But inside the portfolio, the emphasis has become more selective. International exposure now favors quality over momentum. US sector exposure has rotated from growth-oriented cyclicals into energy and more defensive sectors. And within emerging markets, the country mix has shifted toward Latin America.

This is not a retreat from the reflationary thesis. It is a refinement of it. The data still supports a pro-cyclical stance, but conditions are more mature than they were two months ago. Markets have priced much of the good news, and the model is responding with greater selectivity rather than broader risk-taking.

What the Market Environment Favors

The current backdrop continues to favor a pro-cyclical orientation, but one that balances conviction with discipline. That means tilting toward:

‣Value over Growth: Value stocks remain the strongest factor signal. Firm inflation and broadening economic growth continue to support companies trading at attractive valuations relative to their fundamentals, across both US and international markets.

‣Energy and Selective Defensives: Energy remains a natural fit for a reflationary environment. The addition of defensive sectors such as Consumer Staples and Utilities reflects a more balanced posture rather than a loss of conviction in the cycle.

‣International Exposure with a Quality Tilt: Developed international and emerging market equities continue to merit meaningful weight. The shift is in emphasis: international exposure now favors quality-oriented companies over pure momentum, a choice consistent with a more mature phase of the expansion.

‣Emerging Markets, Tilted Toward Latin America: Total emerging market exposure is unchanged, but the country mix now emphasizes Brazil and Latin America. These markets carry strong economic linkages to the global reflationary theme.

What Changed This Month

The most important message is what did not change. The broad regional split across US, developed international, and emerging market equities is the same as last month. Total emerging market exposure is unchanged. The model has not stepped back from global equity participation.

The changes were internal, and they matter. International equity exposure rotated from a momentum-oriented strategy to a quality-oriented one. US sector exposure shifted from Technology, Industrials, and Consumer Discretionary into Energy, Consumer Staples, and Utilities. And within emerging markets, South Korea was replaced by Brazil.

Read together, the signal is clear: the model is maintaining its reflationary allocation but expressing it with more balance. Risk is being taken in different places, not in different amounts.

Why This Positioning Makes Sense

The Economic Backdrop

Growth momentum remains positive. Manufacturing activity sits above 50 and is still rising, with a weighted PMI of 53.9 and services activity at 54.0. Inflation is firming at roughly 4.1% year-over-year, and the yield curve maintains a positive, steepening slope. These are the conditions that historically support risk-taking in equities and favor value, cyclicals, and emerging markets.

The macro regime remains classified as Expansion / Overheat on the cycle clock. That is constructive territory, though it is also a regime where valuation and rate sensitivity carry more weight.

Corporate Earnings Are Strong

Earnings continue to be a primary support for equity risk appetite. Estimated year-over-year S&P 500 earnings growth for the second quarter stands at 23.3%, which would mark the second consecutive quarter above 20%. Revenue growth is estimated at 12.2%, and net margins remain historically strong at 14.2%.

Ten of eleven sectors are expected to report year-over-year earnings growth, led by Energy, Information Technology, and Materials. The caveat is concentration and valuation: much of the improvement remains concentrated in a handful of sectors, and forward multiples leave less room for disappointment.

Market Conditions Support Measured Risk-Taking

The risk environment remains supportive. Equity volatility is contained with the VIX at 16, credit spreads are tight, and the overall risk composite reads as risk-on. These are not conditions associated with defensive stress.

The most constructive signal comes from market internals: emerging market cyclicals are outperforming their defensive counterparts by a wide margin, and the same pattern holds in developed international markets. US cyclical leadership, however, has faded to near-flat. That divergence is part of what is driving the more balanced posture.

The US dollar is neutral rather than weakening, which means liquidity support for international equities is less powerful than earlier in the year. The model has responded accordingly: it retains international and emerging market exposure but expresses it through quality and commodity-linked markets rather than broad momentum.

What Could Derail This Setup

The positioning is compelling, but it is not without risk. A pro-cyclical stance built around value, energy, and emerging markets creates vulnerability if the conditions supporting those areas reverse.

The primary risk scenario: a further acceleration in inflation that drives bond yields sharply higher and strengthens the US dollar. This combination would pressure emerging markets, cyclicals, and international equities disproportionately.

Specific warning signs to monitor:

‣US dollar breaking higher, creating headwinds for international and emerging market equities
‣10-year Treasury yields spiking above current levels, challenging valuations and yield-sensitive sectors
‣High-yield credit spreads widening, signaling deteriorating risk appetite
‣Manufacturing PMI rolling over, weakening the growth thesis
‣Defensive stocks beginning to outperform cyclicals, signaling a shift in market sentiment
‣Emerging markets losing relative strength versus developed markets
‣Earnings revision breadth narrowing further, reducing bottom-up confirmation

Any combination of deteriorating growth, tightening liquidity, rising yields, widening credit spreads, or renewed dollar strength would hit cyclical positioning hard. These are not distant theoretical risks; they are the specific conditions that would invalidate the current opportunity. Monitoring them remains essential.

The Bottom Line

The reflationary backdrop remains in place, and the data continues to favor value, cyclicals, and emerging markets. Growth is expanding, earnings are strong, risk appetite is healthy, and markets are still rewarding economically sensitive positioning.

What has changed is the degree of selectivity. Markets have priced much of the reflationary expansion, and the allocation has responded by shifting from broad momentum toward quality, energy, and defensive balance. The regional risk allocation is unchanged, but the internal composition is more disciplined.

The core task remains the same: watching the macro drivers that justify the stance. If growth momentum fades, if credit conditions tighten, if the dollar reverses higher, the positioning needs to shift with it. For now, the opportunity remains compelling, and the conditions are in place to capture it.

IMPORTANT DISCLAIMERS AND DISCLOSURES:

The information contained in this presentation has been gathered from sources we believe to be reliable, but we do not guarantee the accuracy or completeness of such information, and we assume no liability for damages resulting from or arising out of the use of such information. Past performance is not indicative of future results.

The views expressed in the referenced materials are subject to change based on market and other conditions. This document may contain certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Any projections, market outlooks, or estimates are based upon certain assumptions and should not be construed as indicative of actual events that will occur. The information provided herein does not constitute investment advice and is not a solicitation to buy or sell securities.

Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, investment model, or products, including the investments, investment strategies or investment themes referenced herein, will be profitable, equal any corresponding indicated historical performance level(s), be suitable for a particular portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions.

Procyon Advisors, LLC is a registered investment advisor with the U.S. Securities and Exchange Commission (“SEC”). This report is provided for informational purposes only and for the intended recipient[s] only. This report is derived from numerous sources, which are believed to be reliable, but not audited by Procyon for accuracy. This report may also include opinions and forward-looking statements which may not come to pass. Information is at a point in time and subject to change.

For additional information, please visit our website at www.procyon.net.

29 Jun Growth, Inflation, and The New Rate Reality

Posted at 17:26h in Market Commentary by Massimo Santicchia

Growth, Inflation, and The New Rate Reality

Strong business activity and earnings continue to support markets, even as sticky inflation delays Fed easing and keeps real yields in focus.

Looking Beyond the Headlines

Geopolitical tension in the Middle East, renewed inflation fears, and shifting Fed expectations have made for an eventful stretch. But the economic data has been remarkably consistent: the U.S. economy keeps expanding at a healthy pace.

Our framework combines business activity (PMIs), inflation, and interest rates to locate where we sit in the cycle. It continues to point to a reflationary expansion of improving growth, resilient earnings, and contained financial stress, even with inflation still sticky. The recent conflict involving Iran briefly spiked oil and revived fears of an inflation shock, but the subsequent de-escalation and price retreat mark it as a temporary supply disruption rather than the start of a spiral. Attention has returned to fundamentals.

Business Activity Remains Firm

Recent ISM surveys are constructive. Manufacturing and services both remain in expansion, new orders signal healthy demand, and there is no meaningful evidence of demand destruction. Because business surveys tend to flag turning points early, current readings argue for broad-based, resilient growth rather than recession.

Our PMI–inflation framework shows the catch: activity has strengthened while price pressures have not fully cleared. Services inflation and input costs stay elevated, though the fading oil shock should ease some of that pressure in the months ahead.

Inflation Is Sticky, Not Spiraling

The inflation story has shifted. The temporary oil spike lifted expectations, but the truce and commodity normalization have removed the most immediate upside risk.

What remains is persistence. Businesses still report elevated input costs and firm services inflation, which means inflation likely takes longer to reach target than markets expected. This is slower disinflation, with pressures moderating gradually while staying above central-bank objectives, not a new inflation cycle.

Higher Yields Reflect Stronger Growth and Fed Uncertainty

Resilient activity and sticky inflation have reset the policy outlook. Markets that recently priced an aggressive cutting cycle now expect rates to stay elevated for longer.

Higher yields are not inherently a warning sign; when driven by improving growth, they reflect confidence in the expansion. The real risk is rising real (inflation-adjusted) yields, which would tighten financial conditions enough to pressure valuations and investment. The appointment of a new Fed Chair adds uncertainty, but the core challenge is unchanged: balancing resilient growth against inflation that is easing only slowly.

Corporate Earnings Continue to Impress

The strongest evidence for the expansion comes from corporate America. Analysts now project second-quarter earnings growth near 21.9% year over year, with robust revenue and unusually positive guidance. Rather than the typical downward drift into reporting season, estimates have been revised up. Margins remain near historic highs despite cost pressures, pointing to durable pricing power and healthy demand. Strong earnings have historically cushioned equities through policy uncertainty, even when higher rates weigh on valuations.

Markets Are Rotating, Not Breaking

Recent volatility has raised correction fears. Our risk framework disagrees. Credit conditions, liquidity, and market-based stress measures remain consistent with a functioning risk environment rather than systemic deterioration, and the weakness reflects a repricing of rate expectations, not recession or instability. That matches our dashboard, which reads growth and earnings as positive while flagging sticky inflation and higher real yields as the primary risks.

Leadership is also broadening from a handful of mega-cap technology names toward cyclicals and other expansion-linked sectors. Such rotation is typical of mid-cycle reflation and should not be read as a weakening backdrop.

Investment Outlook

The evidence supports a constructive medium-term view: healthy growth, positive earnings surprises, and contained financial stress. Inflation persistence and higher rates warrant monitoring but have not undermined the expansion.

The principal risk is tighter financial conditions, not weaker growth. A material rise in real yields, paired with widening credit spreads or softening activity, could turn this regime into a more challenging one for risk assets.

For now, we maintain a balanced pro-risk stance: diversified equity exposure favoring quality cyclicals, financials, and international markets, while staying selective in longer-duration, rate-sensitive assets.

Bottom Line

Despite geopolitical shocks, inflation surprises, and a shifting Fed outlook, the economic narrative has changed little. Activity is expansionary, earnings are strengthening, and financial conditions remain supportive. Markets are adjusting to stronger growth and fewer imminent rate cuts, not impending recession. As long as growth offsets the drag from higher rates, the reflationary expansion stays intact, supporting a constructive but disciplined approach.

Important Disclaimers And Disclosures

The views expressed in the referenced materials are subject to change based on market and other conditions. This document may contain certain statements that may be deemed forward‐looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Any projections, market outlooks, or estimates are based upon certain assumptions and should not be construed as indicative of actual events that will occur. The information provided herein does not constitute investment advice and is not a solicitation to buy or sell securities.

Please note that nothing in this content should be construed as an offer to sell or the solicitation of an offer to purchase an interest in any security or separate account. Nothing is intended to be, and you should not consider anything to be direct investment, accounting, tax, or legal advice to any one investor. Consult with an accountant or attorney regarding individual accounting, tax, or legal advice. No advice may be rendered unless a client service agreement is in place. Procyon Advisors, LLC is a registered investment advisor with the U.S. Securities and Exchange Commission (“SEC”). This report is provided for informational purposes only and for the intended recipient[s] only. This report is derived from numerous sources, which are believed to be reliable, but not audited by Procyon for accuracy. This report may also include opinions and forward-looking statements which may not come to pass. Information is at a point in time and subject to change.

For additional information, please visit our website at www.procyon.net.

22 May Global Equity Outlook

Posted at 15:37h in Market Commentary by Massimo Santicchia

The Reflationary Case

The markets are telling a reflationary story right now. Economic growth is broadening, inflation is firming, and risk appetite is healthy. In this environment, history suggests favoring the parts of the global equity market that benefit when growth accelerates: emerging markets, value-oriented stocks, and cyclical sectors.

This isn’t a guess about where the market is heading – it’s a response to where it already is. The data supports a pro-cyclical stance across multiple dimensions: manufacturing activity is expanding, corporate earnings are strong and broadening beyond the mega-cap technology stocks that dominated last year, and credit markets remain healthy. Most importantly, markets are rewarding economic sensitivity.

The key question isn’t whether this setup is attractive right now; it is. The question is how long these conditions persist, and what could change them. We’ll walk through both the opportunity and the risks.

Global Equity Market Commentary May 2026

What the Market Environment Favors

The current backdrop favors a pro-cyclical orientation. That means tilting toward:

Value over Growth: Companies trading at attractive valuations relative to their fundamentals tend to outperform when inflation is firming and growth is broadening. The environment now supports value stocks across both US and international markets.
Cyclicals over Defensives: Sectors like Technology, Consumer Discretionary, and Industrials benefit when economic activity accelerates. Defensive sectors like Utilities, Consumer Staples, and Healthcare typically lag in reflationary periods.
International Exposure: Both developed international markets and emerging markets deserve meaningful weight. The US dollar is trading below trend, and global growth momentum is positive – both conditions that historically support non-US equities.
Economically Sensitive Markets: Within emerging markets, regions with strong economic linkages to global growth, such as Asia ex-Japan and Latin America, are particularly well-positioned.

Recent Shift in Market Leadership

Over the past month, market leadership shifted decisively toward risk assets. Defensive positioning that made sense earlier this year is now a drag on performance.

The rotation has been clear: out of minimum-volatility strategies and defensive sectors, into broad market exposure and growth cyclicals. Technology, Consumer Discretionary, and Industrials are leading, while Utilities, Staples, and Healthcare are lagging.

The message is clear: markets are rewarding economic expansion. Positioning should reflect that reality.

Why This Positioning Makes Sense

The Economic Backdrop

Growth momentum is positive and building. Manufacturing activity (PMI) sits above 50 and is rising, indicating expansion. Inflation is firming alongside economic growth, and the yield curve maintains a positive, steepening slope; all signals that historically support risk-taking in equities.

This is the exact backdrop that favors cyclical positioning. Value stocks, cyclical sectors, emerging markets, and international equities typically need broadening growth momentum and healthy risk appetite to outperform. We have both right now.

Corporate Earnings Are Strong

The most recent earnings season delivered impressive results: 84% of S&P 500 companies beat earnings estimates, and 80% exceeded revenue expectations. Year-over-year earnings growth accelerated to 27.7%, while revenue growth came in at 11.3%. Perhaps most importantly, earnings growth is broadening beyond the mega-cap technology names that carried the market through much of last year. Ten of eleven sectors now show year-over-year earnings growth, with seven sectors posting double-digit gains. This breadth of participation supports a cyclical tilt.

That said, concentration hasn’t disappeared completely. A meaningful portion of the upside in aggregate earnings still comes from a handful of large technology and platform companies. The market is broadening, but it’s not yet fully divorced from mega-cap leadership. Continued broadening would strengthen the case for cyclical positioning.

One critical point for a value and cyclical strategy: margins are holding up. The S&P 500 net profit margin hit 14.7% – the highest level on record. Rising inflation is manageable when companies can maintain pricing power and cost control. So far, they can.

Earnings Snapshot

Earnings Snapshot Chart

Source: FactSet

Market Conditions Support Risk-Taking

The risk environment has shifted decisively into risk-on mode. Equity volatility is contained, credit spreads are tight, and the US dollar is trading below its trend – all conditions that historically support international and emerging market equities.

The clearest signal comes from market leadership itself: cyclical stocks are outperforming defensive stocks across the US, developed international markets, and emerging markets. When cyclicals lead globally, it tells you that markets are rewarding economic sensitivity. That validates a pro-cyclical stance.

What Could Derail This Setup

This setup is compelling, but it’s not without risk. A pro-cyclical stance concentrated in value stocks, cyclical sectors, and emerging markets creates vulnerability if the conditions supporting these areas reverse.

The primary risk scenario: a resurgence of inflation that drives bond yields sharply higher and strengthens the US dollar. This combination would disproportionately pressure emerging markets, cyclicals, and international equities.

Specific warning signs to monitor:

US dollar breaking above its 200-day moving average, creating headwinds for international equities
10-year Treasury yields rising more than 50 basis points, challenging cyclical stocks and equity valuations
High-yield credit spreads widening significantly, signaling deteriorating risk appetite
Global manufacturing activity (PMI) falling back below 50, weakening the growth thesis
Defensive stocks beginning to outperform cyclicals, signaling a shift in market sentiment
Emerging markets underperforming developed markets, challenging the case for EM exposure

Any combination of deteriorating growth, tightening liquidity, rising yields, widening credit spreads, or renewed dollar strength would hit cyclical positioning disproportionately hard. These are not distant theoretical risks; they’re the specific conditions that would invalidate the current opportunity. That’s why monitoring them is essential.

The Bottom Line

The market environment favors a reflationary playbook, and right now, that thesis is playing out. Economic growth is broadening, earnings are strong, risk appetite is healthy, and markets are rewarding cyclical exposure.

The setup is constructive for value-oriented stocks, cyclical sectors, and international markets, particularly emerging markets. These areas benefit from the current combination of expanding growth, firming inflation, and accommodative liquidity conditions.

The core issue isn’t whether this asset mix aligns with today’s environment. It clearly does. The real task is keeping a close eye on the macro drivers that justify the stance: tracking growth momentum, inflation trends, credit conditions, currency swings, and shifts in market leadership. If the underlying data changes, our positioning needs to shift with it. For now, the tactical opportunity is compelling, and the right conditions are in place to capture it.

IMPORTANT DISCLAIMERS AND DISCLOSURES:

The views expressed in the referenced materials are subject to change based on market and other conditions. This document may contain certain statements that may be deemed forward‐looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Any projections, market outlooks, or estimates are based upon certain assumptions and should not be construed as indicative of actual events that will occur. The information provided herein does not constitute investment advice and is not a solicitation to buy or sell securities.

For additional information, please visit our website at www.procyon.net.

16 Apr Rotation, Resilience, and Fundamentals Amid Geopolitical Shock

Posted at 20:27h in Market Commentary by Massimo Santicchia

Executive Summary

Q1 2026 ultimately reflected a rotation-driven market under a temporary inflation shock, rather than a deterioration in underlying economic fundamentals. While the S&P 500 declined 4.3% over the quarter, leadership broadened meaningfully across small caps, value, international equities, and commodities, cushioning diversified portfolios and highlighting the benefits of diversification.

The dominant late-quarter event was the escalation of conflict involving Iran and the resulting disruptions in the Strait of Hormuz. This triggered a sharp rise in oil prices, a rapid repricing of inflation expectations, and a rotation away from duration-sensitive mega-cap growth. However, the subsequent truce and equally sharp reversal in oil prices suggest that this “overheat” phase was externally induced and is now beginning to unwind.

Importantly, the U.S. economy remained resilient throughout this period. Labor markets held firm, business activity remained in expansion, and corporate earnings expectations continued to improve. As the inflation shock fades, the macro regime appears to be shifting back toward broadening expansion with easing supply constraints, supporting a more constructive, though still data-dependent, outlook.

Market Performance

U.S. Large-Cap (S&P 500): –4.3% (largest quarterly decline since 2022)
U.S. Small-Cap (Russell 2000): +0.9%
Style Rotation: Value stocks +1.7% to +2.1% vs. Growth stocks –8.4% to –10% (widest quarterly gap in over a decade)
International: MSCI EAFE (developed), –2.25%; MSCI Emerging Markets, –0.1% (both outperformed U.S. large-caps)
Fixed Income: Bloomberg U.S. Aggregate Bond Index –0.05%
Commodities: Bloomberg Commodity Index +24.4%, driven by energy (Brent crude +~63% in March alone)

This divergence underscores a key point: markets were not signaling systemic stress, but rather adjusting to a shift in macro conditions, specifically, a rise in inflation expectations and interest rate sensitivity. The result was a temporary breakdown in concentration leadership and a reallocation toward sectors more resilient to or benefiting from higher input costs.

(Sources: Creative Planning Q1 2026 Market Commentary; J.P. Morgan Asset Management Q1 Review; Vanguard Q1 Perspectives)

Labor Market (Jobs)

The labor market remained resilient and broadly balanced throughout the quarter. March nonfarm payrolls increased by 178,000, well above expectations, while the unemployment rate held steady near 4.3%. Gains were concentrated in health care, construction, and transportation — sectors that are typically sensitive to underlying economic activity. Importantly, there was little evidence of either overheating or deterioration.

Wage pressures remained contained, and hiring continued at a pace consistent with steady, sustainable growth. Taken together, the labor data reinforces the view that the economy entered and navigated the geopolitical shock from a position of strength.

(Source: U.S. Bureau of Labor Statistics – Employment Situation Summary, March 2026)

PMI (Business Activity)

Both manufacturing and services sectors stayed firmly in expansion:

ISM Manufacturing PMI: 50.7 in March (third consecutive month above 50, the strongest run since 2022)
ISM Services PMI: 53.0 in March (solidly expansionary, though down from 56.1 in February)

While respondents noted rising energy-related costs and some supply-side pressures, there was little indication of demand destruction. This distinction is important: the data point to a supply-driven inflation shock layered onto a still-expanding economy, rather than a slowdown in activity.

Inflation

Inflation dynamics evolved meaningfully over the course of the quarter. Early in Q1, headline inflation remained relatively contained, with CPI at 2.4% year-over-year and core PCE around 3.1%. However, the late-quarter oil shock introduced a new source of pressure. Rising energy costs fed through to input prices, contributing to a repricing of inflation expectations and a modest increase in bond yields.

More recently, the reversal in oil prices following the geopolitical truce has begun to ease that pressure. While services inflation remains elevated, the sharp increase in input costs now appears more likely to have been cyclical — driven by a temporary supply disruption — rather than the start of a sustained re-acceleration. As a result, inflation risk has shifted from one of escalation to persistence, with markets now focused on whether disinflation resumes rather than whether inflation will continue to rise.

(Sources: U.S. Bureau of Labor Statistics – CPI data releases; Federal Reserve Summary of Economic Projections)

Market Resilience in Light of Current Events & Upward EPS Revisions

The late-February Iran conflict escalation and Strait of Hormuz disruptions created a classic supply-shock scenario, spiking oil and commodities while initially pressuring risk assets. Despite this, markets proved resilient:

Leadership broadened dramatically (small caps and equal-weighted indices outperformed cap-weighted).
The energy sector surged +18.5%, while software/tech names faced “creative destruction” pressure but the broader index held.
No recession fears materialized — consensus recession odds stayed low (~30%).
Corporate earnings momentum reinforced this: FactSet data shows S&P 500 Q1 2026 earnings growth estimates were revised upward to +13.2% year-over-year (from +12.8% at year-end 2025), with revenue growth estimates also lifted to +9.7%. Nine of eleven sectors are now expected to post positive growth, reflecting broadening participation beyond the “Magnificent 7.”

(Sources: FactSet S&P 500 Earnings Season Preview Q1 2026; multiple Reuters/Bloomberg reports on Iran/Hormuz events)

Outlook & Portfolio Implications

Looking ahead, the macro backdrop remains constructive, but the drivers of market performance are evolving. The economy continues to expand, supported by resilient labor markets, solid business activity, and positive earnings momentum. At the same time, the easing of the oil-driven inflation shock reduces the primary near-term risk to the outlook and reintroduces policy flexibility. This shift suggests a transition from a narrow, inflation-driven rotation toward a more balanced environment characterized by broader participation across sectors and styles.

From a portfolio perspective, this argues for rebalancing rather than repositioning. Cyclical exposure remains appropriate given the strength of the expansion, but the case for an outsized overweight to energy and other inflation beneficiaries has weakened as oil prices have retraced. Conversely, the headwinds facing duration-sensitive assets, particularly growth equities, are beginning to ease, creating opportunities to reintroduce exposure selectively.

Fixed income also becomes more balanced in this environment. With inflation pressures moderating at the margin, duration risk is less one-sided, and intermediate maturities may offer more attractive risk-adjusted opportunities. That said, the outlook remains contingent on several key factors. The durability of the geopolitical de-escalation, the trajectory of services inflation, and the behavior of credit markets will all play a critical role in determining whether the current improvement is sustained.

Key Sources:

J.P. Morgan Asset Management, Vanguard, Goldman Sachs Asset Management, and Evercore Wealth Management

U.S. Bureau of Labor Statistics – Employment Situation Summary (March 2026) and Consumer Price Index (February 2026); Institute for Supply Management – Manufacturing PMI Report (March 2026) and Services PMI Report (March 2026); FactSet – S&P 500 Earnings Season Preview, Q1 2026; Bloomberg, Reuters, and wire service reports on the Iran conflict and Strait of Hormuz developments (February–March 2026)

31 Mar Alpha Quant® Core Equity

Posted at 16:23h in Large Cap by Massimo Santicchia

Alpha Quant® Core Equity is a portfolio of about 50-60 large-cap stocks that exhibit a combination of higher return on invested capital, stronger free cash flow generation, and lower debt leverage compared to the benchmark and peers. The portfolio is managed with a fundamentally based, systematic process with quarterly rebalancing to maintain the portfolio’s focused fundamental profile.

31 Mar Alpha Quant® Dividend Equity

Posted at 16:22h in Large Cap by Massimo Santicchia

Alpha Quant® Dividend Equity is a focused portfolio consisting of 30 large-cap stocks with strong dividend persistence. The portfolio invests in companies that not only offer high yield, but also have characteristics indicative of strong dividend growth potential. The portfolio is managed with a fundamentally based, systematic process with quarterly rebalancing to maintain the portfolio’s focused fundamental profile.

31 Mar Alpha Quant® Large Cap Growth

Posted at 16:21h in Large Cap by Massimo Santicchia

Alpha Quant® Large Cap Growth

Alpha Quant Large Cap Growth is a high-conviction, high-quality portfolio consisting of 20 stocks that demonstrate sustainable profitability and strong growth fundamentals. The strategy focuses primarily on large-cap stocks, with the flexibility to include select mid-cap holdings. The portfolio typically exhibits superior profitability, measured by return on invested capital and higher projected long-term EPS growth compared to its benchmark and peers. It is managed using a fundamentally driven, systematic process with quarterly portfolio adjustments to maintain its focused fundamental profile.

31 Mar Alpha Quant® Mid Cap

Posted at 16:20h in Mid Cap by Massimo Santicchia

Alpha Quant® Mid Cap portfolio is a multi-strategy portfolio that combines distinct systematic sub-strategies across mid-capitalization quality and value investment styles. The portfolio is comprised of mid-cap stocks selected based on profitability, valuation, low debt and strong cash flows. The strategy is built bottom-up and diversified across sectors and industries.