A Rally Through the Noise Markets extended their resilience in June, shaking off geopolitical...
Recently, financial markets have gained their footing after late-summer turbulence. Stubborn service inflation and firming energy markets have forced central banks into a cautious stance. The Fed raised rates for the first time in years on Wednesday and futures markets are anticipating at least one more hike before year end.
The dominant narrative in equity markets remains the evolution of the artificial intelligence boom. The summer brought concerns that the heavy capex of the hyperscaler was unsustainable. However, strong earnings reports from Amazon (AMZN) and Microsoft (MSFT) were able to alleviate concerns. Our AI investments have rallied strongly off the 7/29 lows, with semiconductors (XSD) up 11.78%, South Korea (EWY +15.80%) and by massive outperformance in our single stock picks like Sandisk (SNDK +71.02%), Lumentum (LITE +53.99%), Coherent (COHR +42.58%), and Micron (MU +36.33%), alongside NVIDIA (NVDA +15.80%). [MJ1.1][KR1.2]Though our recent move into Salesforce (CRM) hasn’t panned out yet, falling about 8% since we entered. We do think that CRM is uniquely positioned to drive enterprise AI adoption and while we’re disappointed with performance out of the gate, we remain confident in the longer-term trade.
The tech dominance of the recent rally has caused some of our global holdings to lag behind but still remain positive. South Korea is an obvious exception, but our positions in Italian (EWI), Spanish (EWP) and Vietnamese equities returned between 0% and 2% since the July lows. We are happy to see that it is positive and remain committed to the positions to avoid overconcentration in the good but volatile AI trade.
The drivers of the market are unlikely to change much through year end, but we continue to question whether investors’ willingness to look through persistent inflation and higher rates can hold. David Kastner, CFA, and I will dive deeper into these themes at our upcoming 2026 Market Outlook: Navigating the Final Quarter events. Join us Wednesday, September 23 at 12:00 p.m. MT in Logan, where lunch will be provided, or attend virtually via Zoom. We’ll host the same Market Update Thursday, September 24 in St. George. We hope you’ll join us as we discuss what we’re watching and how we’re positioning portfolios for the final quarter of the year.
Logan | September 23: Register to attend in person or join via Zoom
St. George | September 24: Register to attend in person
