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CLA OUTLOOK

Key Insights for Sound Financial Strategies

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MARCH 9 WEEKLY INSIGHTS
Investors weigh market implications of escalating Middle East conflict
  • Market volatility had been growing in connection to the Middle East conflict, spiking last Monday on the news, but both U.S. equities and bonds rebounded quickly and remain positive on the year.
  • Investors are left to assess the potential outcomes as well as the possibility of a prolonged disruption to oil passing through the Strait of Hormuz.
  • While the U.S. — which has become a net exporter of oil — may see a smaller impact from this disruption, other countries may see supply affected.
  • Emerging market countries — particularly China and southeast Asia — most dependent on Mideast oil saw more significant market repricing.
  • CLA maintains a U.S. overweight as geopolitical risks and global uncertainty tend to favor U.S. markets for their perceived safety.  
Long-term trends continue to dictate portfolio positioning
  • While the Middle East conflict has adjusted rate expectations slightly, the Federal Reserve remains in an easing cycle, and two rate cuts continue to be likely for 2026.
  • Short-term rates move lower with the Fed, supporting a more accommodative business environment, particularly for small businesses.
  • Economic growth projected above trend, supported by resilient corporate profit margins, AI driven productivity gains, and new permanent tax cuts.
  • Inflation continues to trend lower as core inflation pulls down headline inflation, even if the volatile energy component picks up.
  • Traditional fixed income offers real, inflation-adjusted returns, real estate sees capital inflows, and rotation supports a broader equity market.
Tax season is a smart time to review your investments
  • Before filing, review contributions to accounts like 401(k)s, IRAs, and HSAs — some allow contributions up to the tax-filing deadline to help reduce current taxable income.
  • Confirm asset location for income-generating investments, with tax-exempt municipal bonds available for taxable accounts and taxable bonds in tax-advantaged accounts. 
  • Review realized gains and losses, consider timely portfolio rebalancing and adjustments.
  • Plan for specific years to employ techniques like Roth conversions, 1031 DSTs, Qualified Opportunity Zone fund investments, among others. 
  • Consult your tax and wealth team to learn how to seamlessly connect your taxes and investment portfolio.  

Develop strong financial strategies

Tune in to the CLA Outlook for 2026 as we discuss timely topics around policy, the economy, and market performance.
Read the CLA Outlook
Strategic Opportunities

The Big Picture for 2026

The CLA Outlook signals a turning point: stabilized inflation, growth above trend, and easing interest rates. Explore the key forces influencing portfolios in the year ahead.

  • Economic outlook

    Growth is back on the horizon after three years of higher interest rates and restrictive Federal Reserve policies, with AI helping to transform industries.

  • Fiscal policy

    The rising U.S. deficit remains a key concern as government spending continues to outpace revenues — watch for this to be a focal point heading into midterm elections.

  • Fixed income outlook

    Lower interest rates should be a tailwind to bonds in 2026, though consider credit quality and duration when building high-quality income portfolios.

  • Equity outlook

    Despite elevated stock valuations, led by tech-dominant Magnificent-7 stocks, equities remain compelling because of strong earnings growth and a robust economic backdrop.

  • Alternatives outlook

    Lower interest rates favor private equity and private real estate, while private credit can warrant caution. Manager selection and due diligence remain critical.

  • We can help

    No matter your financial position, incorporating sound tax and wealth advisory could help you achieve more.

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