April Showers Bring May Flowers

Market Commentary – April 13, 2026

As the conflict in Iran continues, we are likely to see a fair amount of volatility during the month of April. Oil prices have surged and WTI crude oil is trading above $100. Considering how high crude prices are, the equity and bond markets have held up extremely well. But the longer the conflict continues and oil prices remain elevated, the more likely equities will stay in correction mode. April tends to be a down month both seasonally and during a mid-term election year. But we want to stress that, in our view, this is a correction within an ongoing secular bull market, which we expect to extend through the end of the decade. Our outlook for the S&P 500 is to reach 7500 by year-end and 10,000-13,000 by 2029-2030. It’s important for investors to remember their long-term goals and remain patient.

Some Good News: Strong March Employment Report

Last Friday, the March employment report showed strong job growth, while the unemployment rate declined to 4.3% from 4.4%. There were some downward revisions to job growth from the prior month’s report, but, net-net, the labor market appears to be stabilizing overall. This could temper any expectations of the Federal Reserve (Fed) lowering interest rates any time soon.

Valuations Tricky

We believe that assessing price-earnings valuations at this time can be tricky because we do expect some negative impact on earnings due to higher oil prices. But what that impact is, is not yet known. Analysts are most likely waiting to adjust their estimates, especially as we head into first quarter earnings season. We do see risk to analysts lowering their earnings forecasts.

Forward P/E multiples have fallen sharply, but our valuation models have not moved much. So, the market looks cheap on a forward earnings basis, but if estimates get revised downward, then the market is not as cheap as it looks.