Savvy Portfolio Perspectives | April 2026

No Strait Answers (April 2026)

‍

Executive Snapshot

This month, we did not make any trades in Savvy Total Portfolios, and our broader positioning remains unchanged. We continue to view equities as the more attractive long-run opportunity set, while fixed income still presents a less compelling risk-reward tradeoff given elevated rate sensitivity and still-tight credit spreads. That basic framework has held up, even as the geopolitical backdrop has evolved quickly over the past several weeks.

‍

The Verdict

At this stage, the key transmission channel remains energy. That was the central message in our March market brief, and it remains the right lens now. Last week, markets briefly rallied on a two-week U.S.-Iran ceasefire, with oil pulling back, before optimism reversed after talks broke down and the U.S. moved ahead with a blockade affecting Iranian shipping. Oil then surged back above $100 before easing again as investors weighed whether diplomacy might resume.

‍

Core Driver

The market is now balancing four things at once: a still-constructive earnings backdrop, a consumer that remains resilient in the hard data, re-accelerating inflation, and a geopolitical risk premium that has risen again. FactSet’s April 10 update shows expected Q1 2026 S&P 500 earnings growth of 12.6%, which would mark a sixth straight quarter of double-digit year-over-year growth if realized. At the same time, March CPI rose 0.9% month over month and 3.3% year over year, driven heavily by gasoline. In our view, that keeps the focus squarely on oil persistence, inflation expectations, Fed reaction, and whether tighter financial conditions begin to matter more broadly.

‍

Portfolio Stance

Overweight Equities, with continued emphasis on U.S. Large Cap exposure and Emerging Markets as a diversification complement.

Underweight Fixed Income, with a preference for higher-quality, shorter-to-intermediate duration exposures.

No portfolio changes this month. Our framework remains the same: watch the variables that can actually change the investing backdrop, namely energy, inflation, policy, and credit.

‍

Macro Thoughts

Geopolitics update: the Iran conflict is still about energy first

When we wrote in early March, our core message was that the most important transmission channel to the global economy was energy. That has held up. The market is no longer treating the Iran conflict as just a headline event. It is being assessed through the lens of oil supply, shipping routes, inflation, and policy implications. Reuters reported on April 13 that the U.S. blockade would prevent roughly 2 million barrels per day of Iranian oil from reaching world markets, while the Strait of Hormuz remains central to the story even as non-Iranian traffic is still being allowed through.

That matters because higher oil prices do not stay confined to energy markets. They flow through transportation costs, input costs, consumer purchasing power, inflation expectations, and central bank reaction functions. The March CPI report gave markets the clearest evidence yet of that transmission mechanism, with gasoline accounting for nearly three-quarters of the monthly CPI increase.

‍

What changed over the last week

A week ago, markets were trading off a different set of assumptions. The ceasefire announcement sparked a relief rally and some easing in oil, reflecting hopes that supply disruption might prove temporary. That optimism has now been challenged by the breakdown in talks and the blockade announcement. In other words, the market has gone from pricing de-escalation to repricing supply risk again.

‍

Earnings still look like an important offset

One reason we have not changed our broader equity stance is that the earnings backdrop still looks constructive. FactSet’s latest data show the S&P 500 is expected to deliver 12.6% year-over-year earnings growth in the first quarter, which would mark a sixth straight quarter of double-digit growth if realized. Just as importantly, expectations for the balance of the year also remain solid. That does not insulate markets from volatility, especially if higher energy costs begin to pressure margins, but it does suggest corporate fundamentals can still provide an important offset to valuation pressure and geopolitical noise and help support markets into the back half of the year if the broader growth backdrop holds.

‍

The consumer is still holding up, though the cushion may be narrowing

The consumer also remains an important part of the resilience story. March payrolls rose by 178,000, unemployment edged down to 4.3%, and jobless claims remain low by historical standards. That still points to a labor market that is holding up even as uncertainty rises. At the same time, we do not want to overstate that strength. The same inflation report that showed re-acceleration also underscored how quickly higher gasoline prices can pressure household budgets. In our view, the hard data still suggest the consumer is holding up, but the margin for error gets smaller if elevated energy prices persist and begin to weigh more directly on spending.

‍

What we’re watching next

The framework remains straightforward.

Oil persistence
The key issue is not simply whether oil spikes, but whether it stays elevated long enough to affect inflation, policy pricing, and real activity. Brent surged back above $100 after the breakdown in talks and blockade announcement before easing as markets weighed the odds of renewed dialogue.

Flow constraints through Hormuz
This remains the most important physical chokepoint in the story. Reuters reported that the blockade extends beyond Iranian ports and is expected to halt about 2 million barrels per day of Iranian crude exports. Markets typically respond more to prolonged disruption than to the initial shock itself, which is consistent with the framework we laid out in the March brief.

Fed reaction and inflation persistence
The Fed is now navigating an even more difficult inflation-growth mix. With headline inflation accelerating and oil back near triple digits, the risk is that a persistent energy shock keeps policy tighter for longer. That is the key cross-asset risk we are monitoring because it can pressure both equities and bonds at the same time.

Financial conditions
So far, we have seen volatility, but not disorderly tightening. Treasury volatility remains elevated enough to keep cross-asset markets choppy, but credit is not yet signaling a broader breakdown in conditions. That distinction matters. It is one reason we have not changed our broader positioning despite the headlines.

‍

What this means for the global economy

The macro implication is fairly intuitive. A sustained energy shock acts like a tax on consumers and businesses, especially for energy-importing economies. It can slow growth, lift inflation, and complicate the path for central banks. We are not yet treating this as a wholesale change to the medium-term investment backdrop, but it does raise the bar for equity multiples, keeps us cautious on duration, and reinforces the value of diversification and disciplined implementation. That is also consistent with the historical framing in our March market brief, which emphasized that geopolitical events often create volatility more than lasting structural change unless they spill over into the core macro variables.

‍

The Savvy Macro Dashboard

Data as of April 10, 2026 unless otherwise noted. 

‍

Current Portfolio Positioning

Question 1: “Should we change portfolios because of the renewed Iran escalation?”

Not yet.

That was our answer in early March, and it remains our answer today. Historically, geopolitical shocks tend to create volatility more often than lasting structural change in markets. The more important question is whether the event changes the variables that actually drive portfolio outcomes. In this case, those variables are energy supply, oil persistence, inflation expectations, policy, and financial conditions. That was the core message of our market brief, and it still holds.

‍

Question 2: “What would cause Savvy to revisit positioning?”

Three things would matter most.

First, a more durable oil shock that materially changes inflation and central bank expectations. The March inflation report suggests that risk has increased.

Second, tighter financial conditions that begin to spill over into broader risk assets and credit. So far, we have seen volatility, but not broad market stress.

Third, a clearer deterioration in fundamentals, especially earnings revisions, consumer demand, or labor market data. Right now, that evidence is still limited. Earnings estimates remain constructive, and job growth remains positive even as inflation has picked up.

‍

Within equities, our sector overweights also remain unchanged

We continue to favor Technology, Utilities, Consumer Discretionary, and Healthcare. While the macro backdrop has become more complicated, our rationale for these overweights remains intact.

• Technology: We continue to favor companies with durable earnings power, strong balance sheets, and clear exposure to long-term innovation trends, while remaining selective as the market reassesses parts of the AI narrative.
• Utilities: We still see an attractive setup tied to structural power demand, particularly from data centers and broader electrification trends, which in our view supports the sector beyond its traditional defensive role.
• Consumer Discretionary: Even with higher energy prices and weaker sentiment, the hard data still point to a consumer that is holding up reasonably well, supporting selective exposure to higher-quality discretionary businesses.

Healthcare: We continue to view Healthcare as attractive given its combination of defensiveness, earnings resilience, and relatively supportive valuation compared with other areas of the market.

‍

Savvy Total Portfolios: Tactical Asset Allocation Positioning

(Views unchanged this month.)

‍

Risks We’re Watching

Energy-driven inflation persistence
This remains the central risk. If oil stays elevated, inflation may prove firmer for longer and delay the path to easier policy.

Supply-route disruption and conflict scope
Markets typically respond more to prolonged disruptions than to the initial shock. Hormuz remains the key watchpoint.

Rates volatility and tighter financial conditions
A persistent oil shock raises the odds of a higher-for-longer policy path, which can pressure both equities and bonds simultaneously.

Narrative risk around earnings and consumer resilience
This earnings season will be important in testing whether higher energy prices begin to weigh more clearly on margins, guidance, and demand. The hard data still look relatively stable, but the cushion could narrow if energy prices stay elevated.

‍

Closing Thoughts

April has been a reminder that markets can move quickly between relief and renewed stress. A week ago, investors were pricing de-escalation. Today, they are back to thinking about disrupted flows, higher oil, and stickier inflation. There are no strait answers here, but there is a disciplined framework. We are watching the energy channel, inflation, policy, and financial conditions closely. Until we see clearer evidence that those variables are changing in a lasting way, we believe the right posture is to stay diversified, stay disciplined, and avoid confusing headline intensity with durable portfolio signal.