【Founder’s Article】 Geopolitical triggers have accelerated valuation adjustments, and the key timing has now been revealed!

This content will be included in the April Investment Monthly Report〈Founder’s Introduction〉 published on 2026.03.27

Dear all,

In the March monthly report introduction, we pointed out that** oil prices will become a key factor affecting liquidity conditions and the level of holdings**, and we warned that when WTI crude oil prices move above 70 USD per barrel, it may lead to “the Federal Reserve delaying rate cuts, the probability of a pullback in the broader market rising, and the need to reduce positions.” Then tensions between the U.S. and Iran escalated, causing oil prices to surge quickly. WTI West Texas Intermediate crude oil rose by 35.9%, while gold fell by -13.7% due to the shock from rising real yields. With the U.S.-Iran war continuing, stocks, FX, bonds, and gold all saw a broad sell-off in March. The U.S. Dollar Index rose, risk-on capital fled across the board, and valuation adjustments arrived earlier than expected.

Note: 2/28 and 3/1 were holidays, so the statistical period was shifted to the most recent trading day for calculation.

If you want to gain a deeper understanding of our views on each period, besides the report, our research team will accompany you this year through quarterly outlooks and theme presentations. On 3/31, Ralice will kick things off and share with you the repricing of assets amid escalating geopolitical conflict and rising AI worries—welcome to join!

1. The market’s current reaction is limited to valuation adjustments; it has not yet reflected the fundamental impact

Since February, we have observed that whether it’s 13F filings, large trader positioning, or ETF fund flow data, you can see capital moving toward “energy stocks” in a concentrated way. At the same time, some** inflation data has also begun to stir**. In the ISM Manufacturing report details released on 3/2, the most关键 “raw materials price index” jumped sharply from 59 to 70.5, with nearly all purchasing managers reporting price increases. Then on 3/18, just ahead of the Federal Reserve meeting, a PPI release was also announced showing a third consecutive month of month-over-month increases, which triggered a drop in U.S. equities. Notably, the impact from the U.S.-Iran conflict described above still had not been fully incorporated into these data, further deepening market concerns that inflation pressure will rise in the future.

Changes in inflation expectations have also quickly transmitted into the interest-rate market. Although the Federal Reserve has repeatedly emphasized during the meeting that “we are still observing and uncertainty is high,”** the market has already clearly lowered the probability of rate cuts this year, and has even started to price in expectations that the European, UK, and Canadian central banks will turn toward rate hikes.**

Based on current observations, the market has started to move back toward the early stage of the Russia-Ukraine conflict, with the valuation adjustments mainly concentrated on the “inflation” and “interest rates” aspects. But up to now, we have still not seen further reflection in the basic fundamentals level—no corporate earnings that would indicate it—showing that the** current market is still framing this round of shock as a “short-term event.”** The IEA also quickly released strategic oil reserves, keeping the actual supply shortfall to about 3% ~ 5%, and expects the impact to last roughly one quarter.

2. Is this leading to a “Davis double hit,” completing the revision chain of inflation > interest rates > economic fundamentals?

As for whether this will evolve into a “Davis double hit,” with “valuation” and “fundamentals” revised down at the same time—we still believe that compared with the Russia-Ukraine war, the current situation is relatively protective,

Have you subscribed already? If you have already subscribed, please click here to log in

            Become a subscribed member

Enjoy full access to the M Square complete service

                        **Unlimited macro chart browsing**

Have it all at your fingertips—
the key indexes of global investments in
commodities

                        **Exclusive focus reports**

About 6 ~ 8 exclusive pieces per month—
major events / data analysis quick updates

                        **Research toolset**

Custom key charts
Backtest performance

                        **The most professional macro community**

Users’ secret indicators
Views sharing

                Subscribe now
            

        

    



                            
                        
                    
                    
                    
                
                

                

                    Favorite
                    
                

                
                

                                                
                            【Founder’s written article】There is no flaw in the fundamentals—oil prices are the key focus! (2026-02-26)
                        
                                                                        
                            【Founder’s written article】When the market gets more chaotic, stocks rise more—fundamentals have already revealed key signals! (2026-01-29)

【Watch now】 A 90-minute global economic outlook, plus you can get all 6 in-depth annual live streams in one bundle! Join immediately

【MM Podcast】 After Meeting EP. 192｜Is it only a short-term valuation adjustment, or does it continue all the way to a Davis double hit? Listen now>>

【Newly launched】 MM AI limited-time free trial experience! Customer service and macro questions handled end-to-end—Join immediately

【Subscription unlock】 Join a membership plan to watch special research institute reports—Subscribe now