Economic Update 4-13-2026

Economic data from the week included U.S. GDP for Q4 being revised down further, mixed personal income/spending, consumer price inflation rising sharply due to oil prices, and weaker consumer sentiment.

Equities recovered sharply last week, with the Middle East ceasefire raising hopes for a reversal in energy prices and economic damage. Bonds were little changed along with minimal change in yields. Commodities were mixed, with energy prices falling back, while metals moved higher.

U.S. stocks began the week slightly higher as hopes for a ceasefire between the U.S.-Israel and Iran rose, in the midst of threats of escalation on power infrastructure. This came along with an ease in oil supply concerns, as selected rationing taking place for jet fuel in some countries. Escalating U.S. threats of Iranian destruction were toned down by later Tue. with a 2-week ceasefire put into place, which included free passage of vessels through the Strait of Hormuz. The latter was obviously critically important messaging from an energy and materials transportation standpoint, although flipping a switch from off to on for such transports was seen as difficult, coupled with the energy infrastructure damage in the region, which has raised additional supply concerns past the expected timeline of this conflict. The Wed. market response of several percent represented the near-term relief markets had been waiting for, although future actions remained tenuous. Possible ‘violations’ of the ceasefire led to more back-and-forth later in the week (while the weekend brought a U.S. naval blockade announcement, and unclear prospects for the ceasefire).

By sector, all groups saw positive returns with the exception of energy, which fell back a few percent along with movements lower in oil prices. Gains were strongest in communications, consumer discretionary, technology, and industrials, up 4-6%. Defensives utilities, health care, and consumers staples saw minimal gains, as would be expected, while real estate also rose a few percent, although interest rates changed minimally for the week. Earnings season for Q1 is starting this coming week, with high expectations for the S&P 500 in the double-digits again, although it remains to be seen if news will outweigh any changes in the Middle East conflict.

Foreign stocks fared especially well, due to their energy supply connection to the Middle East. Europe outpaced the U.K. and Japan slightly, as stagflation worries had been highest in that region, with emerging markets outpacing the developed groups. There, leadership by South Korea and Taiwan resumed, along with improved U.S. technology results, although most major countries ended in the black for the week.

Bonds were flattish, along with minimal changes along the yield curve, although high yield outperformed in the U.S., with a higher yield cushion. Internationally, a weaker dollar boosted unhedged debt, especially in emerging markets.

Commodities fell back last week, led exclusively by a sharp decline in the energy segment, while industrial and precious metals rose several percent. West Texas crude oil spot prices fell over -14% last week to $96/barrel, led by the Middle East de-escalation, as on Wed. morning alone, prices dropped by nearly -20% (the strongest drop since Covid, and before that, Desert Storm in 1991) in reaction to the ceasefire news. That has just reinforced what markets and economists have been focused on for weeks—the issue is all about petroleum flow. (Accordingly, oil futures prices are back up this morning.)

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Sources:  LSA Portfolio Analytics, American Association for Individual Investors (AAII), Associated Press, Barclays Capital, Bloomberg, Deutsche Bank, FactSet, Financial Times, Goldman Sachs, JPMorgan Asset Management, Kiplinger’s, Marketfield Asset Management, Minyanville, Morgan Stanley, MSCI, Morningstar, Northern Trust, Oppenheimer Funds, Payden & Rygel, PIMCO, Rafferty Capital Markets, LLC, Schroder’s, Standard & Poor’s, The Conference Board, Thomson Reuters, U.S. Bureau of Economic Analysis, U.S. Federal Reserve, Wells Capital Management, Yahoo!, Zacks Investment Research.  Index performance is shown as total return, which includes dividends, with the exception of MSCI-EM, which is quoted as price return/excluding dividends.  Performance for the MSCI-EAFE and MSCI-EM indexes is quoted in U.S. Dollar investor terms.

The information above has been obtained from sources considered reliable, but no representation is made as to its completeness, accuracy or timeliness.  All information and opinions expressed are subject to change without notice.  Information provided in this report is not intended to be, and should not be construed as, investment, legal or tax advice; and does not constitute an offer, or a solicitation of any offer, to buy or sell any security, investment or other product.