Well, let's get to the big story breakdown.
After a robust 2025, where global equity markets defy expectations, 22026 has opened with plenty of volatility.
Now the leaders of the market have changed.
US large cap stocks posted solid gains last year in international equities and emerging markets are materially outperforming.
But do investors need to look overseas for better risk adjusted returns, and how is the opportunity set shifting?
Joining me on this.
Morning following that US jobs report is Steven Schoenfeld, CEO of Market Vector Indexes.
Stephen, good morning.
Thank you so much for joining me.
My pleasure.
Well, it has been quite the week across all asset classes.
We continue to look at US stock futures in the red, but this does come on the heels of that US jobs report.
So we got that surprise a pullback in non-farm payrolls and unemployment rate ticking higher to 4.4%.
So what does that mean for the economy and the Fed?
So it was definitely a negative surprise.
Most, uh, analysts expected a positive number at least.
Um, to me, it gives us a little bit of a fear of stagflation.
We have oil up and economy down.
It is not being reacted well by the market right now.
The futures pre-open are indicating, uh, over 1.5% drop.
S&P has been in a range for almost 3 months.
It's sort of absorbed everything that has hit it.
But this could be the straw that breaks the camel's back.
Uh, Big tech has been hurt even more.
And even though there were hopes for a strong start to 26, it seems like those are diminished, and that's why I believe there's more opportunity abroad.
Yeah, and of course we're keeping a close eye on energy prices, so we've seen both WTI and rent prices skyrocket this week as the escalating tensions in the Middle East remain top of mind for all of us.
But what does that really mean for inflation?
So, uh, the first economies that are going to be hit are those who are fully dependent on Mideast oil.
So that's more China, more Europe, more India.
US is a net oil exporter, but oil is a global market, and we feel it at the pump.
We see it in the headlines.
It's not just gasoline, it's also heating oil.
Winter is not over, although hopefully it is soon, and we go to daylight savings time this weekend.
So I do think it's one of those headline numbers that spark not just economists fears, but actual average citizens feel it.
Yeah, and I do want to get your take on what we're seeing in global equity markets.
And as you mentioned, depending on the economy, depending on the nation state and the region in the world, each nation is affected differently by the conflict that is unfolding in the Middle East.
So what does this mean for the equity indexes, especially?
Since we saw that outperformance in 2025, but this year, can we continue that?
So, the shift to international equities or non-US outperforming in 2025 was very significant, more than double the return of the US Already this year going into March, it was repeating.
So you had international equities, including emerging markets, outperforming.
Of course, with the U.S.Israeli attack on Iran and what is happening.
In the Gulf and how Iran is lashing out at the Gulf oil producing, it's creating turmoil across markets, especially oil and energy importing, but you still have standout markets that are more independent.
Um, Brazil is very promising.
It's energy independent, and the economy is more in an upswing.
Surprisingly this year.
Israel has actually rallied in this last week because people are seeing a diminishment of political risk and existential risk.
So investors need to be selective, but I still believe strongly that non-US will be a place for diversification for US investors.
Yes, and expanding on what you just said.
We have been seeing sharp pullbacks in certain equity markets while rallying to new record highs in other markets, but I do want to ask you about the role of the US currency in all of this, especially given what we're seeing across all asset classes.
Yeah, so the US dollar was on a weakening trend all the way through late February, but as this crisis unfolded, to the surprise of many, the dollar has strengthened.
I think people see the geopolitical strength of the US, and the dollar is still a safe haven currency.
I don't think we're going to have a full turn in a bullish dollar environment, but when you have headlines in both Barron's and The Economist of the dollar being dead, that's usually a good contrarian sign to consider holding some dollars.
Well, Steven, we will have to leave it there for today, but a lot of moving parts for Americans to digest on this Friday morning.
So thank you so much for joining us.
Thank you.
Thank you.
Great to be here.
