JD Straight Up - 16Mar26 - Cracking Up?

Cracking Up?

Drulard Family Capital Fund

Fortnightly Macro View

JD Straight Up:

S&P 500 at 6716 – down 2% from 6857 two weeks ago

VIX at 24 – up 9% from 22 two weeks ago - 25 or more tends to shut down IPOs

10yr Treasury yielding 4.22% (up 5% from 4.03% two weeks ago)

Agg (US Aggregate Bond Index) at 99.59 – down 1% from 100.66 two weeks ago

Gold at 5031 per oz (down 6% from 5350 two weeks ago)

Silver at 81.46 per ounce (down 10% from 90.44 two weeks ago)

Crude Oil (WTI) at 94 per barrel (up 33% from 71 two weeks ago) - up 63% YTD

Bitcoin at 74k (up 10% from 67k two weeks ago)

JPM shares at 287 (down 3% from 297 two weeks ago)

Deutsche Bank shares at 30.07 (down 12% from 34.29 two weeks ago)

Truist shares at 44.80 (down 10% from 49.59 two weeks ago) - down 9% YTD and 21% from 52WH

Blackstone shares at 107.72 (down 5% from 113.32 two weeks ago) - down 31% YTD and 44% from 52WH

Magnificent 7 Index at 393 (down 1% from 395 two weeks ago)

US unemployment: at 213,000 in latest claims – up 1% from 212,000 two weeks ago

EUR at 1.15 USD (down 2% from 1.17 two weeks ago)

GBP at 1.33 USD (down 1% from 1.34 two weeks ago)

Macro Environment

US inflation continues at 2.4% with expectations for increases from oil prices that are up 63% in less than 3 months.  US GDP growth for 4Q25 was estimated by the BEA at 1.4%, but was reported at 0.7% in its latest release.  EU inflation is at 1.9% with core inflation at 2.4% from increases in service costs.  EU GDP growth in 4Q25 was steady at 0.3%.  Ceasefire in Gaza continues while Israel is allied with the US in war against Iran.  War in Ukraine persists.  Focus on supply chains is centered on the Strait of Hormuz and Iranian attacks preventing shipping.

Macro View

Stagflation has returned to headlines and debates again as an oil price spike, uncertainty on war goals and timeline, and near-term impact on employment by AI cause concern.  The strength and resilience of the US economy at the center of a world economy will be tested.  Vast expenditure on AI infrastructure is keeping growth elevated.  Questions abound about whether the economy can weather the energy price shock while continuing to adjust to tariffs and trade wars.  The bond market in the form of the 10-year Treasury is expressing skepticism as the yield on the 10-year reversed its consistent decline to begin climbing again.  Perhaps the US will declare some sort of early victory in Iran, complete negotiations, restore Hormuz transportation, and settle oil prices into a more accommodating range where belief that the US has its hand on the oil throttles of both Venezuela and Iran gives confidence in the potential for an economic boom.  Regardless, there is more complexity added to this paradigm by the day and it is impossible to predict though that does not stop thousands from trying on Kalshi, Polymarket, and the good old NYSE.

Relevance

Once can continue to argue that Blackstone is the canary in the coalmine and Truist would be more like the old miner that is less healthy and resilient than the robust guys.  When the canary stops singing and falls off its perch and the old guy keels over, the young guys have to see it coming and know they are next.  JPM might be among the healthiest and strongest of them, but there is a lot of carcinogenic dust blowing around in the mine at this point and JPM can only breath through its handkerchief for so long before it starts wheezing.  These multi-national, money-center banks are still critical to capital flows and capital availability despite a considerable move to disintermediation and private markets.  Watch the airlines and other industries that are particularly reliant on energy prices in a certain reasonable band and see what happens to the availability and price of capital for them.  It could push them into restructuring...yet again.

Head Scratchers

1 - Is someone actually starting to listen to Dalio and Taleb again?  Yes, they predicted nine of the last three recessions, but when their narrative becomes mainstream, the lemmings start to march to the cliff together.

Drulard Family Capital Fund

Drulard Family Charitable Fund

www.drulardfund.com

#38 - 16Mar26