So far in 2026, the US economy already navigating disruptions as well as uncertainty and now facing a profound test over the weekend, President Trump launched military strikes against Iran, resulting in the death of Ayatollah Khamenei, and the geopolitical shock waves were immediate.
Oil briefly spiking higher, and we are looking at WTI as well as futures higher, and this does come amid disruption in the Strait of Hormuz.
We continue to see volatility.
Across safe haven assets with bond yields rising.
So joining me today to weigh in as Chris Brigati, chief investment officer at SWBC.
Chris, good morning.
Thank you so much for joining me.
Thanks for having me. glad to be here.
Well we're seeing plenty of activity across all asset classes.
We're looking at US stocks lower the 10 year yield back about that 4.1% level.
But interestingly enough in commodities, oil rallying, but at the same time precious metals pulling back.
So has anything changed when it comes to your base case?
My base case was a little bit more skeptical about the looking forward aspects of the market in general.
I was bullish on equities.
I remain bullish.
I think we're going to still have a decent year in the equity market, but I have been relatively skeptical about inflation and concerned that that could rear its head and we could have higher yields.
Yes, so walk us through concerns about inflation and what it means for the Federal Reserve because we have been looking at futures prices.
WTI as well as Brent climbing in the past two sessions and we have also been looking at US retail gasoline climbing slightly as well.
So how does this potential duration of the Middle East conflict affect inflation here in the US?
Essentially, the longer it goes on, the more difficult it will become with regard to inflation.
Those oil prices stay high, remain high, or continue to go higher.
We could top $100 a barrel sometime in the near future if this could persists for the 5 to 6 week period that President Trump has suggested it could or even longer as he just said last night.
And so that means that ultimately we're going to have a difficult time getting through this with inflation.
Those prices are going to feed through the market.
Higher prices for gas and oil, transportation, what have you will be impacted and ultimately that's going to push those prices higher for the average consumer.
And I do also want to get your market outlook because not only are we paying attention to inflation, we're also paying attention to labor markets here in the US and there's been uncertainty given artificial intelligence and its role in disrupting the labor market.
But with so many headlines going on, what is your market outlook right now?
Why?
You know, I think that ultimately AI is going to be a boom for the market.
Come out and really help us overall.
There will be some perils that we'll have to work through with regards to the labor situation, but ultimately AI will create other jobs in the interim and in the aftermath, and ultimately it will help us overall.
So I'm constructive on the market.
I think it's going to be volatile.
I expect to be able to buy some dips in here though.
I think it's ultimately we're going to have 10% higher returns in the S&P before the end of the year.
And I do want to get your take on bonds.
So in New York morning trade, we are looking at the 10 year back of that 4.1% level and it was interesting because it was below 4% earlier this week.
So given all the volatility we're seeing, what do you expect to see in the Treasury yields in the US?
I expect this to be a little bit higher in the near term.
I thought. percent yields were a bit of a stretch.
I think the market was overbought into that position.
So ultimately this unwind, though I was skeptical that we could have had somewhat of a flight to quality trade as a result of the conflict in Iran.
I'm also thoughtful that we were overbought, overextended a little bit, so somewhat of a backtrack is in place.
We were around a 430 yield back in January, and I see that as a really easy target to reach.
And during times of geopolitical uncertainty we all know that there's a lot of safe haven demand, but interestingly enough in terms of precious metals right now we are looking at a pullback, but there are different arguments for that.
So given the fact that we are seeing US dollar strength right now, what do you make of Muni bonds as a safe haven?
I think it's such a good asset class in general.
I have a long history in the municipal bond market.
The AAA quality and the relative high grade quality of most of the municipal asset class is really a benefit for investors, and the tax exempt status is something that most investors, especially those paying Higher taxes really relish, and they're going to continue to seek so the credit quality is there.
Municipal assets are relatively expensive given some supply and demand dynamics that have happened in the past several months, but ultimately it's a quality asset class and if you can lock in better yields, I think there's opportunity there.
And Chris, I'm sure you're having a lot of conversations with stakeholders right now given all this uncertainty, but what should Americans keep in mind given all of this volatility across markets and how do you see this eventually playing out?
I think investors should be thoughtful and not panic.
I really get frustrated when I see the panic selling in the market from the investors' standpoint.
From the buyer's standpoint, great, you've got an opportunity to buy in and lock in some really cheap prices, but ultimately panic selling is not the greatest aspect of the investor sentiment.
And what I want to see investors do is be thoughtful about the credit quality in their portfolios, make sure they're upgrading and owning best in class type of assets.
Ultimately we'll come out of this stronger and better and really ride the wave going forward.
And you mentioned credit.
There have been private credit jitters underneath the surface, and we've been seeing different industries getting hit.
But at the same time, when it comes to Americans, we're talking.
Retail consumer as well as small businesses and they're wondering what does all of this mean when it comes to rates so borrowing costs as well as lending what you tell them ultimately I think that when we're talking about credit and the concerns in the market, there's a liquidity issue that comes into play and so being mindful of that avoiding something that's going to be a liquidity scare or liquidity impact is something to be aware of.
Ultimately I think that's going to drive yields a little bit higher, rates a little bit higher.
It might be an opportunity for buyers of the market to lock in, but for borrowers it might be a little more expensive.
And another thing that we're paying attention to here on Wall Street is midterm elections.
So as we head into the rest of 2026, this is an area that we'll keep our eyes on.
So what are the potential impacts here and Do you think the same tailwinds that we saw at the beginning of 2026 regarding stimulus still do remain in effect?
I think they do.
I think there's a little bit more of a question around it now.
There's not broad-based support for the conflict in Iraq right now.
There's only about a 25% approval rating for it, so that doesn't speak well for the midterm elections for the Republican Party.
Ultimately though, I think that there's plenty of time in here.
The ends could justify the means and the results of working through this conflict, hopefully getting it resolved relatively quickly before we kind of reach a point where it's going to impact the midterm elections.
We could see a turnaround in that sentiment and ultimately I think it's going to be a boom.
Well Chris, we will have to leave it there, but thank you so much for joining us today and thank you so much for sharing your perspective and your insight.
Thanks for having me.
Thank you.
