Weekly Market Update (Feb 22, 2026)
- Market Hedwig
- Feb 21
- 2 min read
HIGHLIGHTS
After the US Supreme Court invalidated the IEEPA tariffs, Trump replaced them with 10% global tariffs and will be effective on Tuesday.
Economic Data: Q4 GDP indicated a slowdown in government spending while the consumer spending and AI capital expenditure (capex) stayed resilient. Core PCE inflation remains firm.
Japan: The foreign exchange special account surplus has potentially become a funding source for VAT cuts. PM has yet to push against rate hikes amid the weakness in yen.
Bitcoin: Markets are discussing whether Bitcoin is a good hedge for risk. From cross-asset correlation research, bitcoin behavior is classified as risk-on, liquidity-sensitive and speculative asset. Based on its recent performance, it seems like a higher-beta asset than expected, and is highly correlated to high-growth stocks like software stocks.
MARKETS
22,886.07 | +1.51% | |
S&P 500 | 6,909.51 | +1.07% |
Dow | 49,625.97 | +0.25% |
10-Year | 4.09% | +3bps |
Brent | 71.30 | +5.24% |
DXY | 97.79 | +0.94% |
*Data as of market close. 5-day change ending on Friday.
VIEW FROM THE STREET
Equity
Goldman Sachs: Large funds reduced their exposure to software names in recent weeks. Short interest in the median of S&P500 is near highest level in recent years in terms of the amount as a percentage of market cap.
Morgan Stanley: Investors have been rotating into small-caps and chasing momentum. Markets are trending in a reflationary direction. The concerns about Mag 7 leadership have intensified.
Fixed Income
Morgan Stanley: Private, syndicated and structured loans are essential in the credit extension expansion. For these lenders, the exposure has concentrated in high-growth companies, including software and tech-intensive firms. Given the re-pricing of these assets in public markets, it could affect these credit portfolios.
Standard Chartered: We expect Bank of England to cut in March as the recent data shows the job market cooling. Unemployment rate increased to post-pandemic high last month. Wage growth in the private sector slowed down, indicating less inflation pressures.
Economy
J.P. Morgan: Investor interest in gold is at a very high level. Demand has accelerated due to the increasing concerns about the sustainability of US fiscal health, inflation, dollar strength and geopolitical uncertainty. Such backdrop also makes central bank seek diversification by holding gold to hedge the escalating macro uncertainty.
Standard Chartered: US disinflation continued. Other than the oil price spike from Middle East conflict, we expect the disinflationary trend to sustain, driven by the continued shelter disinflation and fading tariffs impact.
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DISCLOSURE
This newsletter is meant for informational purposes only and is not investment advice. Always consult a licensed investment professional before making important investment decisions. Advertising and sponsorship do not influence editorial content or decisions. Market Hedwig is not responsible for the promises made or the quality or reliability of the products or services offered in any advertisement.
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