Thu, March 26, 2026 | 7:50AM ET

Fog of war (on comms) keeps investors sidelined. Crypto and tech leadership shows digital economy not disrupted by war.

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The latest reports around a potential ceasefire leave investors confused. Conflicting statements by Iran leadership not only highlight the fracturing of the Iran regime, but also highlights the “fog of war” underway. And this “fog” is a reason many investors remain wary and sidelined. This is entirely understandable. The war is in its 4th week now and we are starting to see market leadership emerge.

The war has been underway long enough that we are beyond the “noise” of relative performance. That is, in the first few days of an outbreak, we might see short covering, or panic selling or other reflexive actions. But 4 weeks into a war, and we can see the winners and losers.
This is a decent list of performance. Since the outbreak of the US-Iran War, the following are relative returns (best to worst):
– Ethereum 16.9%
– MSCI World Energy 13.9%
– Energy 13.1%
– Bitcoin 12.3%
– Technology ex-Mag 7 3.7%
– Expanded Tech-Software ETF (IGV) 2.9%
– Comm. Services ex-Mag 7 1.2%
– MSCI World Technology 1.1%
– Magnificent 7 0.5%
– Financials 0.3%
—- zero return —-
– Utilities -0.5%
– 20Y+ Treasury Bond ETF (TLT) -0.6%
– MSCI World Utilities -1.8%
– MSCI World -2.2%
– Industrials -2.4%
– MSCI World Comm. Services -2.5%
– MSCI World Financials -2.6%
– MSCI World Discretionary -3.4%
– Real Estate -3.7%
– Discretionary ex-Mag 7 -4.2%
– Materials -4.3%
– Healthcare -4.4%
– Staples -4.5%
– MSCI World Industrials -5.2%
– MSCI World Real Estate -5.5%
– MSCI World Staples -5.9%
– MSCI World Health Care -6.0%
– Gold Spot -9.8%
– MSCI World Materials -9.8%
– Silver Spot -19.0%
The leadership has been crypto, led by Ethereum ETH 1.04% and Bitcoin BTC 0.46% (and we highlighted this many times already) and outperformed Gold by a sizable margin. One could make the statement that crypto is the “war time” store of value. And as a practical matter, the usage of crypto has risen in the Middle East, as it is far easier (lower transaction cost) to move value with crypto over gold. And there is far less slippage on price since sellers of gold often receive a sizable discount to spot if they are selling physical gold bars and coins.
No surprise to see Energy leading (XLE) and Energy and Basic Materials (XLB) remain our top sector picks (see our 2026 Outlook from early Dec 2025). But few sectors/ groups have been positive since the Iran war.
– Energy
– US Tech
– MAG7
– Financials
– that is pretty much it.
By the way, tech and software and crypto are all adjacent. In a way, the outperformance of these highlights the in a period of war disruption, the economy that continues to function well is the digital economy. Hence, doesn’t it make sense for these to lead.
And if war ends, we think these same groups will lead. Post-war, energy prices and inflation will be lingering issues for consumers and businesses. And what is the best way to fight inflation costs? It is using technology to drive productivity. Also, tech and crypto are large liquid markets, so capital is comfortable remaining there.
Lastly, we think investors should be careful to not be too tactical and try to time this market bottom. Recall our past work on the 10 best days:
– since 1928, equity return is +8% annually
– ex-10 best days, return drops to -13% annually
– the top 10 days contribute 2,100bp annually
– since 2016, equity return is 14% annually
– ex-10 best days, return drops to -9% annually
– the top 10 days contribute 2,300bp
Logically, the 10 best days will likely come near the war-time period. Recall last year, the cluster of 10 best days happened as the tariff wars reached its apex. In fact:
– in 2025, total S&P 500 gain 16%
– ex-10 best days, return falls to -9% annually
– the 10 best days added 2,500bp
The fog of war and unpredictability of war makes knowing the “end of war” impossible.
This is not to say stocks have bottomed. Our Head of Technical Strategy, Mark Newton, believes there could be some further downside ahead.
This week is a light week in terms of Macro data:
– 3/23 Mon 8:30 AM ET: Feb Chicago Fed Nat Activity Index -0.11 vs 0.16e
– 3/24 Tue: March Macro Update & Top Ideas Webinar
– 3/24 Tue 8:30 AM ET: 4Q F Nonfarm Productivity QoQ 1.8% vs 1.8%e
– 3/24 Tue 8:30 AM ET: 4Q F Unit Labor Costs 4.4% vs 3.6%e
– 3/24 Tue 9:45 AM ET: Mar P S&P Global Manufacturing PMI 52.4 vs 51.5e
– 3/24 Tue 9:45 AM ET: Mar P S&P Global Services PMI 51.1 vs 52.0e
– 3/24 Tue 10:00 AM ET: Mar Richmond Fed Manufacturing Survey 0 vs -8.0e
– 3/26 Thu 11:00 AM ET: Mar Kansas City Fed Manufacturing Survey 2.5e
– 3/27 Fri 10:00 AM ET: Mar F U. Mich. 1yr Inf Exp

BOTTOM LINE: AI rotation to “bullet makers” is not end of MAG7

While March is coming to a close, we still have a belief March could be an up month. Markets are climbing a wall of worry. We continue to view 2026 as an overall tougher year for markets, with a 3 phase market (rally, then large decline, then YE strong). And our positioning remains:

Energy/Basic Materials -> top pick
MAG7 & Bitcoin & Ethereum
Industrials -> “bullet makers”
Financials: Large-cap and regional banks
Small-caps

Fog of war (on comms) keeps investors sidelined. Crypto and tech leadership shows digital economy not disrupted by war.

Part I: 44 Large-cap Core Ideas: Updated list is below

Large-Cap Core Stock Ideas are large-cap stocks that appear in multiple of our investment strategies.

Consider these the stocks our top stock picks and thus, the higher quality ideas.

The Current Large-cap Core List as of 3/23/2026 is as follows:

Communication Services: GOOGL, META, NFLX, SATS
Consumer Discretionary: AMZN, TJX, TSLA
Consumer Staples: COST, MNST, WMT
Energy: CVX, OKE, TPL
Financials: AXP, BK, GS, HOOD, JPM, PNC
Health Care: AMGN, MRK
Industrials: CAT, DE, ETN, GE, GEV, NOC, PWR, TT, UNP
Information Technology: AAPL, AMD, ANET, AVGO, CDNS, KLAC, MSFT, MSTR, NVDA, PLTR
Materials: APD, PKG, PPG
Utilities: VST

Part II: 62 SMID Core Ideas: Updated list is below

SMID Core Ideas are small and mid-cap stocks that appear in multiple of our investment strategies.

We believe SMID Core List could benefit from the multiple themes and secular tailwinds.

The Current SMID Core List as of 3/23/2026 is as follows:

Communication Services: RDDT, SATS, TIGO
Consumer Discretionary: DPZ, H, IBP, SGI, SN
Consumer Staples: BG, ELF
Energy: CCJ, DINO, DTM, UUUU, WFRD
Financials: ALLY, EWBC, GLXY, SOFI, WAL
Health Care: EXEL, HALO, UHS, UTHR
Industrials: ARRY, AVAV, AWI, BE, BWXT, CARR, CRS, CW, DCI, DY, ENS, FIX, HII, IESC, ITT, KTOS, MLI, NXT, QXO, RKLB, STRL, VMI, WTS
Information Technology: FN, IONQ, LSCC, LITE, MDB, NBIS, ON, PATH, PSTG, RIOT, SANM
Materials: ALB, MP, RGLD
Utilities: TLN

Key Incoming Data March:

~~3/2 9:45 AM ET: Feb F S&P Global Manufacturing PMI~~ Tame
~~3/2 10:00 AM ET: Feb ISM Manufacturing PMI~~ Tame
~~3/4 9:45 AM ET: Feb F S&P Global Services PMI~~ Tame
~~3/4 10:00 AM ET: Feb ISM Services PMI~~ Hot
~~3/4 2:00 PM ET: Fed Releases Beige Book~~ Tame
~~3/5 8:30 AM ET: 4Q P Unit Labor Costs~~ Tame
~~3/5 8:30 AM ET: 4Q P Nonfarm Productivity QoQ~~ Tame
~~3/6 8:30 AM ET: Feb Non-farm Payrolls~~ Mixed
~~3/6 8:30 AM ET: Jan Retail Sales~~ Tame
~~3/9 11:00 AM ET: Feb NYFed 1yr Inf Exp~~ Tame
~~3/10 6:00 AM ET: Feb Small Business Optimism Survey~~ Tame
~~3/10 10:00 AM ET: Feb Existing Home Sales~~ Tame
~~3/11 8:30 AM ET: Feb Core CPI MoM~~ Tame
~~3/12 8:30 AM ET: Jan Trade Balance~~ Tame
~~3/13 8:30 AM ET: 4Q S GDP QoQ~~ Mixed
~~3/13 8:30 AM ET: Jan P Durable Goods Orders MoM~~ Tame
~~3/13 8:30 AM ET: Jan Core PCE MoM~~ Tame
~~3/13 10:00 AM ET: Jan JOLTS Job Openings~~ Tame
~~3/13 10:00 AM ET: Mar P U. Mich. 1yr Inf Exp~~ Tame
~~3/16 8:30 AM ET: Mar Empire Manufacturing Survey~~ Tame
~~3/16 10:00 AM ET: Mar NAHB Housing Market Index~~ Tame
~~3/18 8:30 AM ET: Feb Core PPI MoM~~ Mixed
~~3/18 10:00 AM ET: Jan F Durable Goods Orders MoM~~ Tame
~~3/18 2:00 PM ET: Mar FOMC Decision~~ Mixed
~~3/18 4:00 PM ET: Jan Net TIC Flows~~ Tame
~~3/19 8:30 AM ET: Mar Philly Fed Business Outlook~~ Tame
~~3/19 10:00 AM ET: Jan New Home Sales~~ Tame
~~3/23 8:30 AM ET: Feb Chicago Fed Nat Activity Index~~ Tame
~~3/24 8:30 AM ET: 4Q F Unit Labor Costs~~ Tame
~~3/24 8:30 AM ET: 4Q F Nonfarm Productivity QoQ~~ Tame
~~3/24 9:45 AM ET: Mar P S&P Global Services PMI~~ Tame
~~3/24 9:45 AM ET: Mar P S&P Global Manufacturing PMI~~ Tame
~~3/24 10:00 AM ET: Mar Richmond Fed Manufacturing Survey~~ Tame
3/26 11:00 AM ET: Mar Kansas City Fed Manufacturing Survey
3/27 10:00 AM ET: Mar F U. Mich. 1yr Inf Exp
3/30 10:30 AM ET: Mar Dallas Fed Manuf. Activity Survey
3/31 9:00 AM ET: Jan S&P Cotality CS 20-City MoM SA
3/31 10:00 AM ET: Feb JOLTS Job Openings
3/31 10:00 AM ET: Mar Conference Board Consumer Confidence

Economic Data Performance Tracker 2026:

Economic Data Performance Tracker 2025:

Economic Data Performance Tracker 2024:

Economic Data Performance Tracker 2023:

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