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The More Things Change - Weekly Wrap

Written by

Variant Perception

Published on

06 Mar 2026

Chart of the week

*Compared to the Russia-Ukraine war, today’s macro backdrop appears far more resilient. In Feb 2022, US import prices and PPI were already at high single digits.*

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Research This Week

The more things change - Mar. Macro Snapshot | Watch Discussion

Macro Risk Indicator remains bullish, but growth and policy impulses (i.e., rate of change) are slowing. Macro fundamentals were resilient heading into Iran shock. Our manufacturing recovery and “jobless growth” analogs from January remain intact.
Cyclical backdrop still favorable for equities even if pace of gains may slow from here. Among sectors, we are taking profit on our Energy overweight and swap into Health Care. We remain overweight Technology and Financials.
Resilient growth and gradual disinflation (absent energy shock) should keep 10y UST yields rangebound. Tactical and cyclical factors are pointing to USD rebound.

Summary

Cyclical Asset Allocation: Resilient macro heading into Iran shock, macro risk indicator past peak bullishness
Today vs 2022 Energy Shock: Inflation policy in better place today
Macro Analog Update: Amalgamated ’16, ’03 and ’99 still our base case
Equity Sector Allocation: Taking profit on Energy, swapping into Health Care, keeping Tech & Financials OW
Equity: US earnings strong, “Sell America” showing signs of excess
Fixed Income: 10-year yields to remain rangebound around 4%
FX: USD bottoming, energy price shock to hit overvalued Europe FX hardest
Commodities: Gold miners still appealing, oil and gas rally unlikely to repeat 2022

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Context for the VP Correction Signal - Mar. 4

VP’s tactical Correction Signal activated.

This model was built to flag broad-based deterioration in credit and volatility across asset classes not yet reflected in the S&P 500 (defined as less than a 5% peak-to-trough drawdown).

In general, this kind of cross-asset model tends to work best when the deterioration in cross-asset credit and volatility is organic rather than the result of an exogenous shock like the Iran war today.

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Buy the dip on China tech - Mar 5

We are seeing better tactical and cyclical alignment on our China tech indicators. Chinese Tech equities have been a major underperformer YTD, caught up in a perfect storm of local tax fears, geopolitical angst and the SaaSpocalypse contagion.