Taking Stock: Executive Summary March 31, 2026

We began Q1 with cautious optimism (which probably sounds familiar.) Yes, risk persisted; however, a combination of mostly positive fundamentals (strong consumer spending, declining inflation, double-digit earnings growth), economic stimulus and policy clarification (especially around tariffs) was providing a pretty steady tailwind for the markets. And yes, January indicated a year off to a good start, with broad gains led by value, mid and small cap stocks. February saw increasing volatility, with investors cautious amid geopolitical tensions and inflation concerns, and March proved to be even more of a challenge.  Tensions escalated to military conflict, sending oil prices skyrocketing and markets plummeting. All major indices closed the quarter down, with geopolitical concerns driving wide market swings. All the doom and gloom in the news tends to overshadow fundamentals that remain mostly positive.  We see Q1 market conditions as yet another reminder that periods of volatility are a natural and recurring investment phenomenon, and the best path forward is to ignore the noise and stay the course.

Q1 Economic Data:

Gross Domestic Product (GDP). The GDPNow model estimate for real GDP growth in Q1 2026 is 1.3% (seasonally adjusted annual rate), a significant decrease from earlier estimates with mounting downside risks. In Q4 2025, real GDP increased at an annual rate of 0.7%.  (A growth rate between 2% and 3% is commonly considered “normal.”)  

Unemployment. Total nonfarm unemployment in March increased by 178k in March, and the unemployment rate was 4.3%, little changed from Q4 2025. 

Consumer Confidence. The Conference Board Consumer Confidence Index, an indication of consumer attitudes and buying intentions, increased slightly during the quarter to 91.8% but remains below the baseline of 100, with continued concerns over rising energy prices and the broader impact of the Iran war.  

Consumer Price Index (CPI). The CPI for All Urban Consumers (CPI-U), a measure of inflation which shows “cost of living” fluctuations, increased 0.9% in March on a seasonally adjusted basis, led by a 21.0% increase in the index for gasoline (accounting for nearly 75% of the “all items” increase). Over the last 12 months, the all-items index increased 3.3% before seasonal adjustments.

Earnings. For Q1 2026, the estimated (year-over-year) earnings growth rate for the S&P 500 is 13.2%. If this is the actual growth for the quarter, it will mark the 6th straight quarter of double-digit earnings growth for the index.    

Housing. Private housing starts in January 2026 were at a seasonally adjusted rate of 1,487,000, 7.2% above the revised December 2025 estimate and 9.5% above the January 2025 rate. Builders’ sentiment inched up to 38 in March (with 50 being the break point between good and poor), as cost concerns persist.  

Looking Ahead:

The defining event of the past quarter was, of course, the escalation of conflict with Iran and the associated economic impacts. Yes, war is hell, but this much we know. Conflicts will come and conflicts will go, bringing with them volatility and market chaos. But this too shall pass. “The historical record shows that geopolitical crises have had political and humanitarian consequences, but not long-term economic and financial ones,” says Fidelity's Director of Quantitative Market Strategy, Denise Chisholm.  We believe that, especially in times like this, patient investors are rewarded. We remain committed to maintaining a disciplined approach, mitigating downside risk by concentrating on fundamentals and investing in quality companies in a diversified portfolio -- to staying the course.

The stock market is a device for transferring money from the impatient to the patient.  – Warren Buffet. 

We are committed to providing you with the highest standard of care in keeping with our corporate mission of 

Building Relationships … Enhancing Lives.

Executive Summary Sources:

https://www.nasdaq.com/articles/january-2026-review-and-outlook 

https://sistoadvisory.com/quarterly-review-stocks-pull-back-from-highs-asmarkets-are-tested/#:~:text=KEY%20TAKEAWAYS%20*%20Stocks%20took%20a%20downward,a%20shift%20from%20their%20underperformance%20in%202025. 

https://www.atlantafed.org/research-and-data/data/gdpnow/current-and-past-gdpnow-commentaries

https://www.bea.gov/news/2026/gdp-second-estimate-4th-quarter-and-year-2025

https://www.bls.gov/news.release/pdf/empsit.pdf

https://www.conference-board.org/topics/consumer-confidence/

https://www.bls.gov/news.release/pdf/cpi.pdf

https://advantage.factset.com/hubfs/Website/Resources%20Section/Research%20Desk/Earnings%20Insight/EarningsInsight_040226.pdf?hsCtaTracking=31d0f488-5c02-4193-b93b-f1708067f4fa%7Cb994622e-6b82-4c98-ad34-76c848088314

https://www.census.gov/construction/nrc/pdf/newresconst.pdf

https://www.nahb.org/news-and-economics/press-releases/2026/03/builder-sentiment-inches-higher-but-affordability-concerns-persist

https://www.fidelity.com/learning-center/trading-investing/geopolitics-war-and-markets 

https://www.re-thinkwealth.com/top-10-warren-buffett-quotes/ 

https://www.morningstar.com/indexes/dji/!dji/performance

https://www.morningstar.com/indexes/xnas/@cco/performance

https://www.morningstar.com/indexes/spi/spx/performance

https://finance.yahoo.com/quote/%5EDJI/history?p=%5EDJI

https://finance.yahoo.com/quote/%5EIXIC/history?p=%5EIXIC

https://finance.yahoo.com/quote/%5EGSPC/history?p=%5EGSPC

Past performance is not indicative of future results.

The views expressed represent the opinion of Asset Management Financial Solutions, Inc. (“AMFS”) and are subject to change and are not intended as a forecast or guarantee of future results. This material is for informational purposes only. It does not constitute investment advice and is not intended as an endorsement of any specific investment. Statements of future expectations, estimates, projections, and other forward-looking statements are based on available information and AMFS’s view as of the time of these statements.  Accordingly, such statements are inherently speculative as they are based on assumptions that may involve known and unknown risks and uncertainties.