Market Commentary by Corrado Tiralongo, Chief Investment Officer | May 1, 2026
The market is not ignoring the geopolitical shock. It is choosing to look past it. That worked initially. It is becoming harder to justify. The Strait of Hormuz remains largely closed. Energy flows are still disrupted. Negotiations continue, but there has been no real improvement. And yet the market is still anchored to the same conclusion, this fades, the economic impact is contained, growth holds.
That is no longer a neutral base case. It is an increasingly optimistic one. Time is the problem. Each additional week of disruption raises the probability that this feeds through more meaningfully, first into energy, then inflation, then policy, and eventually growth. Markets are pricing the end state. We are still working through the transmission.
The shift is subtle, but it has started
You are starting to see it, just not all at once. Oil is moving higher again. Yields are drifting up. The dollar is firming. Equity momentum has stalled. None of these change the story on their own. Together, they do.
Financial conditions are no longer easing. They are tightening, gradually, unevenly, but directionally clear. At the same time, volatility has already normalized. That tailwind is gone.
So, the market now needs better outcomes, not just stable ones. That is a higher bar than it looks.
The entire structure rests on one pillar
If the geopolitical assumption is one support, the other is earnings. More specifically, a very small part of the market. Roughly 70% of expected earnings growth is coming from large-cap technology.
This week is the test
This is where the narrative meets reality. Earnings reports from five of the largest U.S. technology firms, Microsoft, Alphabet, Amazon and Meta Platforms on April 29, followed by Apple on April 30, will provide the clearest near-term test of whether fundamentals are keeping pace with expectations.
That is the market.
The last two earnings seasons were strong, but the reaction was not. Investors pushed back on rising capex. Free cash flow came under pressure. The AI narrative was accepted, but not fully trusted. What has changed is sentiment. The market is now assuming those concerns do not matter. That only holds if the numbers, and more importantly the guidance, reinforce it. If they do, the rally extends. If they don’t, there is not much underneath to absorb the adjustment.
Central banks are not confirming the narrative
This is also a heavy week for policy. The Federal Reserve, European Central Bank, Bank of England, and Bank of Japan all meet, alongside the Bank of Canada on April 29th. Across the board, the expectation is the same. Hold.
That is not a signal of stability. It is a pause under uncertainty. They are not easing because growth risks tied to energy have not fully materialised. They are not tightening because they are waiting to see how persistent those pressures become. More importantly, the rate cuts that were expected earlier this year are not coming back quickly, even if the geopolitical situation improves.
Markets are pricing relief. Central banks are waiting for evidence. That gap matters more than the decisions themselves.
The real risk is the timeline
This likely resolves at some point. That is not the issue. The issue is whether it resolves fast enough to justify how markets are positioned today. Because if it doesn’t, the adjustment is not gradual. Energy feeds into inflation. Inflation limits policy flexibility. Financial conditions tighten. Growth expectations shift.
The sequence takes time.
The repricing does not.
CLIML Portfolio implications
From a portfolio construction perspective, the focus has been less on reacting to headlines and more on understanding what is actually driving returns.
We have maintained equity exposure, while recognising that index-level resilience is increasingly tied to a narrow set of outcomes, particularly within large-cap technology.
At the same time, portfolios have been positioned to include mandates with differentiated return drivers, with the objective of reducing reliance on a single growth or liquidity regime. This has required a more explicit assessment of underlying exposures. What appears diversified at the asset class level can still be driven by the same forces, particularly growth and liquidity.
We have also incorporated strategies that can respond across a wider range of market environments, not just those consistent with the current backdrop, but also scenarios where financial conditions tighten more meaningfully.
The objective is not to predict the outcome, but to avoid being overly dependent on any single one.
Closing thought
This is a market holding together on two assumptions:
- That the shock fades quickly
- That a handful of companies deliver exactly what is expected
Both may happen.
But neither has happened yet.
That is why this feels less like a stable rally, and more like one that is simply being extended.
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This material may contain forward-looking information that reflects our or third-party current expectations or forecasts of future events. Forward-looking information is inherently subject to, among other things, risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed herein. These risks, uncertainties and assumptions include, without limitation, general economic, political and market factors, interest and foreign exchange rates, the volatility of equity and capital markets, business competition, technological change, changes in government regulations, changes in tax laws, unexpected judicial or regulatory proceedings and catastrophic events. Please consider these and other factors carefully and not place undue reliance on forward-looking information.
The forward-looking information contained herein is current only as of April 27, 2026. There should be no expectation that such information will in all circumstances be updated, supplemented or revised whether as a result of new information, changing circumstances, future events or otherwise.