• This week we received good economic data, yet the market has continued to decline.
• Inflation came in at 2.4%, which is a positive reading.
• Jobless claims were also slightly better than expected, meaning fewer people filed for unemployment.
• So the obvious question is: if the data is good, why is the market going down?
• The answer is that investors are not looking inward at the U.S. economy right now.
• Instead, they are looking outward at geopolitical risk and what it could mean for the future.
• The focus of the market right now is the Strait of Hormuz.
• Much of the world’s oil supply moves through this narrow shipping lane in the Middle East.
• If that supply is disrupted, oil prices could rise significantly.
• Oil has already been volatile, briefly touching $100 a barrel before moving back down.
• Historically, the economy has been able to handle oil prices around $100 without triggering a recession.
• The real concern would be oil moving well above $100 and staying there for a prolonged period.
• That type of sustained increase could create inflation pressure across the global economy.
• When inflation pressures rise, interest rates often rise as well.
• We are already starting to see mortgage rates move higher again.
• Higher interest rates can slow economic activity over time.
• Despite the recent market decline, the overall pullback from the peak earlier this year is only about 4%.
• It feels worse than that because negative headlines tend to stand out more than positive ones.
• Historically, pullbacks of around 4% happen almost every year in the market.
• What makes this one feel different is the geopolitical noise surrounding it.
• In terms of our strategy, we are monitoring where the market sits relative to our sell signal.
• At this moment, the market still has more than 5% of room before reaching that level.

• We also remain above the 200-day moving average.
• That means we are not currently at a sell signal.
• However, we are close enough that we are watching it carefully.
• You could think of it as a yellow light blinking on the horizon.
• We also use what we call our “sanity checks” to guide how we respond if a sell signal occurs.
• Out of the four sanity checks we monitor, only one is currently flashing red.
• The others are showing conditions that remain relatively stable.
• Based on today’s data, if a sell signal occurred, the most likely action would be reducing exposure rather than selling everything.
• That could change if conditions deteriorate quickly.
• For example, if oil prices surge, mortgage rates rise sharply, or credit conditions tighten, the situation could escalate.
• Those developments could eventually push the economy toward recession.
• At this point, much of the market reaction appears to be driven by fear of what could happen rather than what is actually happening today.
• Our approach remains disciplined.
• If our sell signal is triggered, we will act to protect portfolios.
• If it is not triggered, we stay invested and avoid reacting emotionally.
• Think of it like a tornado warning. When the siren sounds, you seek shelter even if the tornado ultimately misses you.
• The same discipline applies to our investment strategy.
• For now, the situation appears to be a wait-and-see environment.
• We will continue monitoring developments closely and will act if conditions require it.
• In the meantime, our goal is to mind the store so you can focus on enjoying your Second Childhood Without Parental Supervision.

Transcript:

Ken Moraif
Hello everyone, and welcome to our Market Alert Video for today, which is Friday the 13th of March 2026. Yes, it is Friday the 13th Eek, and we’ve got a lot to talk about with you. The data we got this week was good, but yet the market keeps going down. So what’s driving it? What are we going to do about it? Where are we relative to our sell signal right now? What has the market done since its peak? What are mortgage rates going to do? But most importantly, how does it affect our portfolios, our strategy, and what we’re going to do about it? That’s the subject this week. And so I’m glad you are with us, all you SCWPerS out there. I hope you are SCWPering your tails off. You’re enjoying your second childhood without parental supervision. And all you clients, our job is to get you there, and we will do that with every fiber of our being. So let me bring Jordan Roach into the conversation, our Chief Investment Officer. Hello, Jordan. How are you doing? Well, it’s good to see you. You know, I’m back playing tennis again. My knees are pretty good now, so it’s basically leg strengthening from all the muscle attrition. It’s not the right word. What is it atrophy that I’ve had with basically a year when I haven’t done anything so but it’s exciting. It’s fun. But one thing I’ve noticed, you know, there’s lots of pickleball courts everywhere now that a lot more than there were. And the thing about the pickleball courts that I’ve noticed is that when you walk off a pickleball court, there’s like, this little section with sofas, and they have, like, heaters, I’m thinking makes you love it even more. No, it doesn’t. It’s like, how you know tennis there’s like chairs and basically nothing. It’s a bench. That’s right, because tennis players are tough. Pickleball players require sofas and heaters. I mean, how soft are these people? You got to toughen up, man. Anyway, so I

Jordan Roach
see in my neighborhood too, but maybe that’s, you know, more people speed, nice little koozie, yeah?

Ken Moraif
I mean, next thing you know, they’re gonna have a massage therapist and everything there you’re supposed to be getting exercise. So let’s talk about all the stuff that so two big, important economic data points came in this week. Anyone even notice that? So nobody seems to care, right? Right? Number one, inflation came in at 2.4% and then jobless claims were slightly below expectations, meaning fewer jobless claims, and then we expected, so that’s good, right? Inflation seems to be okay. Jobs aren’t. Are okay. The economy seems to be okay, but yet the market’s going down. What’s up with that?

Jordan Roach
No one’s looking inward right now. On the US economy, we’re looking outward, and what it could mean, right? That’s where the market’s trying to reprice and figure it out, because right now, they say, Yeah, jobs today doesn’t matter, because what are things going to look like if this war, if we call it a war, persists, right? For months,

Ken Moraif
and this whole thing now, this whole thing boils down to one, two words, the straight. Actually it’s three, the straight of Hormuz four. That’s the straight of four words. You’re right. Four words. That’s really it. That’s what it’s all about. Everything quiets down. A four word stock market, that’s right. So let’s talk about that. So right now, Iran has figured out that the way to win this war, quote, unquote, is an economic war, as opposed to they can’t beat us militarily, right? So that’s what they’re doing, right? And so they’re going to try to sink every oil tanker there is that goes through there. Our Navy is supposed to stop that. So now we got that going on. But in the meantime, investors are getting scared. What’s happening in terms of that.

Jordan Roach
That’s right. So right now, you know, for a lot of oil production that comes out of the Middle East, it doesn’t go by pipeline, it goes by transport ships, and it comes through this small little area straight at Hormuz to get out and move to where it needs to go. And so the issue is, we’re cutting off. Basically, supply is being cut off. And they said, Okay, supply is cut off. Right? Oil is needed to produce a lot of things, right, to move a lot of, you know, different vessels. And if the cost goes up on prices, then that cost, inflationary cost. It can extend globally the banks and services.

Ken Moraif
But it touched 100 it backed way down, back to 80, went back up. It seems like every time President Trump gives a talk, the price goes up and down. Is, you know, based on that. But we’ve seen oil at $100 a barrel before, right? And it hasn’t caused like a global recession and all the things that people are worried about.

Jordan Roach
No, that’s, you know, 100. Really, it seems like a big number relative to maybe where it was, but 100 is not a problem. There would be a little bit of move up in gasoline prices, all these things. It’s more of is 100 the ceiling. Because I do think that’s very sustainable. We saw that in 2022 we moved right through 100

Ken Moraif
We saw it quite, quite a few times at 100 higher than 80, you know, absolutely.

Jordan Roach
I mean, we’ve ranged from 70 to a little over 100 you know, some a little bit lower, but kind of that range for the last five years, right with and I think the market historically before that can deal with that. It’s kind of the, it’s the move where, if we get over 100 How long do you stay over 100 and how much more do you go? Right? That’s where you get kind of concerned. But right now, really, for us, you know, you’re looking at a 40 to 50 something percent move in WTI versus Brent, two different types of oil. That’s not really that big of a concern for us right now,

Ken Moraif
it sounds like what we have to fear most is fear itself. Right? Investors are scared of what could be. It’s not what actually is happening.

Jordan Roach
That’s exactly right. It’s a bracing for what could be in a worst case scenario. If this persists, this extends, yeah, what does it mean? And that’s

Ken Moraif
what investors do. The pendulum swings to like, the worst case scenario. We’re going to be at $150 a barrel for the next two years, or something. That’s right. And so they’re all freaking out when it probably won’t be. So let’s talk about what’s also happening, because there are inflation pressures. What’s caught what’s happening now is we’re starting to see, like mortgage rates start to pick up, and that does affect our economy quite a bit,

Jordan Roach
absolutely right? So right now we have seen to go. You know, Treasury rates largely are going to be tied to either dampening growth, right? Because growth leads to inflation long term, and that’s the good side of inflation, is if it’s coming because of growth, or the other side is cost pressures, just pure inflation comes through, rates will come higher to hopefully quell that. So right now, the concern is inflationary pressures that we talked about, what tariff is going to lead to inflation, and we haven’t really seen that. We didn’t see how we got maybe war leads to inflation. And so we can see rates pull right back up to potentially offset future inflation. And we’ve seen it,

Ken Moraif
yeah, and you know when you see, I think it’s human nature to kind of look at what the market is doing and notice it’s kind of like when you’re in a rush to get someplace, the only thing you notice is the red lights, right? The green lights, you don’t notice them, but when you hit a red light, it’s like, oh, darn it, another red light, right? But you may have only hit two, but you they stick with you. So when the market goes down, it feels you notice it more than when it goes up. But yet, if we look at where we are from the peak earlier this year, we’re only down about 4% from the peak, which is a lot, but it’s not a lot.

Jordan Roach
It feels like a lot. If we probably surveyed people, we asked them, How far are we down? I bet the answer we would get, on average is probably two or three times with

Ken Moraif
the actual is, yeah, it’s like, oh my gosh, the market’s going down every day. It’s going down, it’s going down.

Jordan Roach
But really it’s just kind of pulled back, right? It’s repricing based on this new information. But this is, you know, for us, 4% pullbacks happen every year, and sometimes they just don’t have the noise attached to it like this one does. So this just feels worse than what really that we’ve seen the market, you know, interact with.

Ken Moraif
So let’s talk about our sell signal. Okay, and you know, where are we relative to our sell signal, right now?

Jordan Roach
Yeah, well, so we have, we have a little room, right? We have more than 5% to go. So that’s a good news, right? We’re still above the 200 day average. So we’re still sitting with a little bit of room for the market to continue to digest things, but we’re actually talking about it where, you know, two weeks ago, we weren’t talking about our sell signal. Yes, we’re close enough for it. Kind of, for us is it’s a yellow light that’s kind of blinking there on the horizon. We have to be mindful of it,

Ken Moraif
so we’re ready in case. We’re ready in case. And people may remember or not. A long time ago, we talked about the sanity checks that we use to determine if we should sell 100% or if we should sell less. And so right now, we have four sanity checks. And if people don’t remember that, you can go back to that previous video. It’s posted somewhere, I hope. But of the four sanity checks that we look at to help us to determine whether we should sell everything or sell a portion of it, what are we looking at as we sit today?

Jordan Roach
Yeah, only one right now is for you know, our terminology is flashing red, right? So one of the sanity checks is saying, Look, we see some problems, but the rest of them right now have moved a little bit, but are signaling everything’s okay. So what that would lead us to right now, if nothing changes, right, is that if we were to hit our, you know, signal, most likely base case would be able to suggest, sell something other than 100% right? We’re not, we wouldn’t be necessarily justified, across the board, to do that,

Ken Moraif
yeah, but we’ll see it could change by the time we get there. Absolutely, because if mortgage rates rise and building permits fall, and people start investing

Jordan Roach
defensively, worried about credit conditions, and people start, you know, rates come up so more people are maybe delinquent on on houses like all. These things can move very, very quickly,

Ken Moraif
yeah, and we could, I mean, in a worst case scenario, if this thing in the Strait of Hormuz continues, it could cause a recession.

Jordan Roach
Absolutely, there’s, there’s precedent for that historically, and it’s not this linear. But you know historically when, when oil and gas prices, oil prices move up by 100% or two or 300% and stay there. That typically leads the economy to slow down, for the stock market to fall all those things. We haven’t seen that. But if this persists, and we get into kind of what led into the summer of oh eight or in the 70s, absolutely, the markets are going to have problems.

Ken Moraif
Yeah. And so, you know, the important thing for us is that we must be disciplined. We have a strategy. We must be disciplined. And the way I think of our strategy is kind of like a financial tornado warning, and when the siren goes off, you know, it’s important that we seek shelter. Now, if the tornado doesn’t hit us, it doesn’t mean it was a bad idea to seek shelter, right? And so if we hit our sell signal, then it’s incumbent upon us to protect our clients from what could happen. And so that’s where we rely on the sanity checks to tell us if we should sell everything or not. And right now we would probably not sell everything, is what it’s saying. That’s exactly right. Okay. So as we look at all of this, it looks like it’s a wait and see situation. So it looks like, then that this is a lot of fear of the unknown that is driving all of this. That’s right, but, you know, may not come to fruition, and so we did remain calm and not get overly excited about this at this time. Yeah. I mean,

Jordan Roach
this is, I think that’s right. This is fear driven. This digestion This is event driven, right? Similar to, actually, what we saw in 2025, and it probably takes one or two words from President Trump, and then things are gone.

Ken Moraif
It’s true. It’s true. The market just hangs on every word he says. That’s right.

Jordan Roach
So that’s, you know, this is a digestion phase. We think things could move either way very, very quickly. So it’s a, we’re just

Ken Moraif
holding tight, right? And if, if I were to put myself in President Trump’s shoes, we’ve got the midterms coming up, right? And so he does not want the economy to be in a recession when the midterms come. So the likelihood that he’s going to let this thing be a protracted, you know, three month thing, and oil prices rise to whatever. I think is very small. I agree. So the Iranians actually have leverage in this, even though it feels like, you know, we’re, we’re completely devastating everything, they still have leverage, because it’s an asymmetric war right now, right? They have things they can put in the water that can blow up these ships, and that’s difficult to stop. So our Navy now becomes the most important player in this whole thing, not the Air Force, which is interesting.

Jordan Roach
Yes, it is. And my army brethren are sitting on the side for this one.

Ken Moraif
Well, do you guys in the army have How do you feel about the Navy. Obviously, they’re your teammates right there. They’re all part of the thing. But you guys, yeah, the Army, Navy game is not a small thing. So we

Jordan Roach
like to, we like to take a little jabs each. Yeah, no question.

Ken Moraif
Well, ladies and gentlemen, thank you for watching. I hope you found this informative and helpful. And of course, we’re always going to mind a store for you, and if something needs to be done, we will. So you go out, enjoy yourselves. Don’t worry about this. Let us get the gray hair. Let us worry about it all for you, and thank you for watching. And make sure you share this with your friends and family, and we’ll talk soon.

Please note: transcript has been modified after the time of recording. 

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