Weekly Market Update (Mar 01, 2026)

Market Hedwig
23 hours ago
2 min read

HIGHLIGHTS

Markets trade on AI worries due to the disruption. War in Iran is also an imminent risk.

Data: PPI data and the FOMC announcement imply that the rate is likely to be held in March. Combined with other released data, they are all pointing to the direction of the acceleration of near-term US economic growth.

War: US-Iran tension is escalating, and Russia-Ukraine ceasefire is unlikely. There are concerns about Iran's oil supply and have driven oil prices higher. To hedge against the middle-east tensions, long Swiss Franc and short Israeli Shekel are recommended currency hedges in the current environment.

UK: Risk of political uncertainty increased as the Green Party won. Inflation forecast also rose in Q2.

Japan: The Japanese government nominated 2 dovish candidates to the Bank of Japan board. It also launched a debate on a VAT cut and funding sources issues.

MARKETS

Nasdaq	22,668.21	-0.95%
S&P 500	6,879.88	-0.44%
Dow	48,977.92	-1.31%
10-Year	3.96%	-13bps
Brent	72.48	+1.00%
DXY	97.61	-0.19%

*Data as of market close. 5-day change ending on Friday.

VIEW FROM THE STREET

Equity

UBS: Rapid advanced AI increased the risk over terminal value of traditional software models. IT and software stocks dropped significantly this week.

Morgan Stanley: We suggest focusing on earnings realization stocks in US. Take profit in small-mid caps and speculative stocks and rotate to large caps in broader sectors (not only Mag7). Also add exposure in emerging markets equities.

Fixed Income

UBS: Volatility in the credit market is affected by the equity market. Investment Grade bonds spreads remain tight, while we can see pressure in High Yield bonds and the sector dispersion has become more obvious.

Morgan Stanley: Most tech names switch from equity to debt markets to fund the capital expenditure (capex), such as building data center. Investors are looking for higher yields in tech as the implied risks are increasing, such as R&D, input costs, business model changing amid the rapidly changing AI narratives and applications.

Economy

Barclays: AI disruption is likely to be in the path of AI adoption. However, we believe it takes longer time than markets expect.

Morgan Stanley: Current economic growth is more likely to be investment-led than consumption-led. Capex is higher while consumer stall amid the current backdrop e.g. flat job market, low population growth and unfavorable demographics.

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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.