JD Straight Up - 30Mar26 - Strait Jacket

Strait Jacket

Drulard Family Capital Fund

Fortnightly Macro View

JD Straight Up:

S&P 500 at 6404 – down 5% from 6716 two weeks ago

VIX at 30 – up 25% from 24 two weeks ago - up 100% in 1Q26

10yr Treasury yielding 4.35% (up 3% from 4.22% two weeks ago)

Agg (US Aggregate Bond Index) at 98.96 – down 1% from 99.62 two weeks ago

Gold at 4599 per oz (down 9% from 5031 two weeks ago)

Silver at 71.34 per ounce (down 12% from 81.46 two weeks ago)

Crude Oil (WTI) at 102 per barrel (up 8% from 94 two weeks ago) - up 76% in 1Q26

Bitcoin at 68k (down 8% from 74k two weeks ago)

JPM shares at 286 (down 1% from 289 two weeks ago) - down 15% in 1Q26

Deutsche Bank shares at 28.47 (down 6% from 30.11 two weeks ago) - down 28% in 1Q26

Truist shares at 44.63 (flat from 44.76 two weeks ago) - down 12% in 1Q26

Blackstone shares at 110.57 (up 3% from 107.52 two weeks ago) - down 32% in 1Q26

Magnificent 7 Index at 359 (down 8% from 391 two weeks ago) - down 16% in 1Q26

US unemployment: at 210,000 in latest claims – down 1% from 212,000 two weeks ago - up 6% in 1Q06

EUR at 1.15 USD (flat from 1.15 two weeks ago)

GBP at 1.32 USD (down 1% from 1.33 two weeks ago)

Macro Environment

War continues in Iran and Ukraine.  Iran has effectively blocked the Strait of Hormuz to most traffic.  Ceasefire persists in Gaza.  US inflation is at 2.4% and GDP growth rate for 1Q26 is estimated to be 2%.  EU inflation is at 1.9% and GDP growth rate estimated to be 1.2%.  Oil prices are up 76% in 1Q26.  Oil, LNG, fertilizer, aluminum and other critical inputs are impacted by the Strait of Hormuz closure.  US equity market volatility and US Treasury yields spike.  US War Department requests $200bn expansion to its $900bn expenditure ($1.5trn proposed for 2027).  Annual interest on US debt nears $1trn.  US debt to GDP is at 125% (from 59% in 2000).

Macro View

Probability of stagflation increases materially with energy-driven price spikes.  Shipping costs are impacted not only through fuel prices but through increased costs of insurance and logistics.  In a global economy, the increased costs will flow through to prices quickly.  Inflation is certain to result.  Uncertainty brought about by war, erratic energy prices and availability is compounded by the additional uncertainty surrounding employment in an AI era.  Corporations will delay capital expenditure and hiring plans alike.  Employment will be squeezed.  Prices Up + Employment & Growth Down = Stagflation.

Relevance

A further complication is the growing concern over private credit and non-bank financing.  The combination of war, corporate decision delay, and financial reckoning is a lot to overcome.  The deus ex machina of AI and approaching super-intelligence could yet prove to right all wrongs and usher in the next leg of one of the longest bull markets in history, but it is not an obvious bet.

Head Scratchers

1 - Can superintelligence save us from ourselves and redirect typical human fallacies into optimal paths and a new way of inhabiting the universe?  Or are we just carrying on a tradition pursued for tens of thousands of years of destroying others and then ourselves akin to a brush fire that repeatedly clears the way for new growth?

Drulard Family Capital Fund

Drulard Family Charitable Fund

www.drulardfund.com

#39 - 30Mar26