Weekly Commentary (04/13/26) – Toll Booth at the End of the World
Weekly Commentary (04/13/26) – Toll Booth at the End of the World
What Just Happened
Markets had their best week since November. The S&P 500 rose 3.6%. The Nasdaq climbed over 4%. For a few days it felt like the ceasefire might hold and the worst was behind us.
Then Sunday happened. Peace talks collapsed in Pakistan. The nuclear question was the sticking point. Within hours a naval blockade of the Strait of Hormuz was announced. Brent crude jumped 8% to $104. Futures are pointing sharply lower this morning.
Index / Commodity / BM % Change Price or Yield Level Change
DJIA 3.07%
S&P 500 3.58%
NASDAQ 4.68%
Russell 2000 3.99%
MSCI EAFE 4.44%
MSCI EM 7.45%
10 Year Treasury 4.31% -4 bps
Gold 1.7% $4,774
Oil Approx. 8% $104
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Perspective: Two Ideas
So here we are again. Another week of volatility, another set of headlines competing for your attention.
I want to share two ideas that have been on my mind. They come from very different places, but they connect in a way that I think matters right now.
The first is a passage from Hegel that I came across this week. Most people know his famous line: "We learn from history that we do not learn from history." But it turns out he meant something different than we think. Hegel was not saying we repeat the same mistakes. He was criticizing people who lift old philosophers out of their original context and graft their wisdom onto modern problems as if nothing has changed. His actual point was that history teaches us broad principles, but those principles are often too general to be useful in the specific moment you are standing in.
I thought about that while reading all the historical comparisons flying around. Is this 1990? Is this 2003? Is this 1973? The honest answer is it is none of them. Every conflict has its own shape. Looking at seven oil shocks since 1990, markets were essentially flat two weeks out and up meaningfully within one to two years. That pattern is real. But it is a broad principle. What matters is the specific situation we are in right now.
And the specific situation is this: Iran turned the Strait of Hormuz into a toll booth. They have been charging ships for passage while continuing to export nearly 1.9 million barrels of their own crude per day. That is the asymmetry the blockade is trying to break. Meanwhile gas prices are up about 20% since February. Inflation jumped to 3.3% in March. And earnings season starts this week with the big banks reporting.
The second idea comes from a speech Mark Carney gave at Davos back in January. He told the story of a shopkeeper in communist Czechoslovakia who places a sign in his window every morning. "Workers of the world unite." He does not believe it. Nobody does. But he puts it up anyway because everyone else does. Vaclav Havel called this "living within a lie."
Carney's argument was that the old international order had become that sign. Countries kept performing the rituals of free trade and multilateral cooperation even as the system underneath was breaking down. His phrase for what replaces it is "value-based realism." Principled about what matters. Pragmatic about how the world actually works.
That framing matters for investors because it describes the structural shift underneath all the daily noise. We are not transitioning from one stable system to another. We are in a period where countries, companies, and families all need to build resilience without knowing exactly what the next chapter looks like.
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What This Means
This is where the data underneath the headlines starts to matter. The style box tells an interesting story right now: small-cap value is up 10.3% year to date. Energy is up nearly 29%. Materials are up almost 15%. Meanwhile large-cap growth, the trade that dominated the last two years, is roughly flat.⁵
That kind of rotation does not happen by accident. When inflation rises and the dollar strengthens, the market starts repricing which companies actually earn money in the real economy. Infrastructure. Energy production. Industrial investment. These are not the names getting the headlines, but they are where returns have been generated.
This matters because it is a reminder that diversification is not just a nice idea. It is doing real work right now. Portfolios that own more than the biggest names in technology, that have exposure across sectors, geographies, and asset classes, are seeing the benefit of that breadth in real time.
The economic trajectory will depend heavily on how the conflict evolves. A contained, shorter-duration disruption would likely have a modest impact on growth and employment, consistent with historical precedent from prior supply shocks. A prolonged disruption with sustained elevated oil prices represents a more meaningful headwind. Prior episodes suggest the potential for notable pressure on GDP growth and consumer spending, particularly given current household balance sheet conditions. The range of outcomes remains wide, and the situation continues to develop.
A well-designed portfolio does not bet on either extreme. It is built for the range.
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What To Consider
A week like this is a good time to check in on a few things: whether your cash reserves still match your spending timeline, how rising energy costs are hitting your household and your portfolio, and whether any major decisions are being affected by the volatility.
We are here. Reach out anytime.
"The task is not to see what no one has seen, but to think what no one has thought about that which everyone sees." — Arthur Schopenhauer
Sources: ¹ S&P 500 Index returns following geopolitical oil supply disruptions, 1990–2024. Capital Group, Bloomberg, Standard & Poor's. Data as of March 10, 2026. Past results are not predictive of results in future periods. ² Iran crude export data: Kpler data and analytics, as reported by CNN, April 2026. ³ National average gasoline prices: AAA, U.S. Energy Information Administration. Comparison of prices from late February 2026 to present. ⁴ Consumer Price Index: U.S. Bureau of Labor Statistics, March 2026 release. Headline CPI year-over-year. ⁵ Style returns and sector returns: Russell Indexes, Standard & Poor's, FactSet. Data as of April 10, 2026 via J.P. Morgan Asset Management Weekly Market Recap. All returns represent cumulative total return for stated period including reinvestment of dividends. Small-cap value: Russell 2000 Value Index. Large-cap growth: Russell 1000 Growth Index. Sector returns based on GICS methodology.
Market data: J.P. Morgan Asset Management, Weekly Market Recap, April 13, 2026. Index returns, yields, key rates, and commodity prices as cited in the Weekly Data Center. All equity returns represent total return for stated period.
Investors cannot invest directly in an index. Past performance does not guarantee future results. Diversification does not guarantee investment returns and does not eliminate the risk of loss. This material is for informational purposes only and should not be relied upon as investment advice or a recommendation of any particular security, strategy, or investment product. This material does not consider the investment objectives, financial situation, or particular needs of any individual investor. Consult your financial advisor before making any investment decisions.