Investment Week at a Glance
Stocks finished lower for the week. The Dow Jones Industrial Average fell 0.9%, the S&P 500 was down 2.1%, and the NASDAQ fell 3.2%. Foreign stocks (MSCI EAFE) were up for the week, rising 0.8%. Bond prices were down for the week, with the 10-year U.S. Treasury ending the week at 4.43%. (Data source: Wall Street Journal)
Markets Continue to Fall on Higher Oil Prices
Markets had another tough week, as stocks once again fell and rates moved higher, causing bonds to fall as well. The S&P 500 is now down 9% from its all-time high, and the NASDAQ has fallen 13% from its all-time high. There was already some worry around AI earlier this year that had markets uncertain, and the war in Iran has just added to the decline. During market downturns, the most important thing is to stick to your long-term plan. Since 1996, a $10,000 investment in the S&P 500 has grown to over $192k, if you were to miss the best 10 days over 30 years, your return drops to $85k. Although hard in the moment, sometimes the best thing to do is nothing at all.
Inflation Worries
One impact of the war in Iran is the worry of higher energy prices, creating a price increase in other goods and services. As energy costs are input into nearly everything we do, prices are likely to rise in places other than just the pump. Current expectations are that inflation will increase by nearly 1% more than before due to the rise in oil prices. This has put pressure on companies as it may impact earnings and borrowing costs going forward, as the Fed may not cut as once expected. Rate hikes are actually expected in most other countries around the world as a result of higher prices.
Verizon Stock Up Over 24% Year to Date, But Still Faces Significant Challenges.
One of America’s largest communication providers, Verizon (VZ), is up over 24% year to date, significantly outperforming broader US indexes that have shown serious volatility. On February 17th, Verizon filed its annual report, showing $138.2 billion in revenue for 2025, a 2.5% increase from 2024. Additionally, Verizon beat analyst earnings per share estimates, which investors reacted to positively. However, Verizon faces stiff competition for customers in the communications sector from competitors such as AT&T and T-Mobile. One factor that may make Verizon stock more attractive to investors compared to its competitors is its significantly higher quarterly dividend, which has increased every year over the last two decades. Although the stock has performed well this year, so has the stock of its competitors. Time will tell over the next several earnings cycles which communications giant is capturing more market share than its competitors, which will be reflected in movements in their respective stock prices. (CNBC)
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Quiz
How far has the US technology sector fallen since its peak earlier this year? (Scroll Down for Answer)
- 15%
- 13%
- 10%
- 7%
Answer:
2. 13%. The tech sector peaked on January 28th and has been on a sharp decline since. MGO portfolios have been underweight tech for the past 15 months which has helped performance to start 2026.
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