Today’s job report shows a loss of 92,000 jobs in February. My conclusion from Trump’s overhaul of the department that compiles these statistics has been that we’d be receiving reports that “showed” the jobs situation as being considerably better than what the prior method would have produced. If the best the new guys can do is to show a considerable jobs loss for the month, this says to me that the domestic economy is in considerably worse shape than I’d thought.

I also find it striking that the Trump narrative on Iran has shifted so quickly from bombing to invasion.

Oddly enough, the US market is showing relative strength since the attack on Iran has begun. This seems to imply that the damage Trump’s Iran policy is doing to the rest of the world will be greater than the harm to the US. Presumably, this is because of Iran’s increasing production of easy to refine light sweet crude.

–The US stock market continues to be a world laggard, a position it has held since the inauguration, and one it is in for an extended period the first time in 25 years. Ex 1993, the US dominated the 1990s, as well.

–a recent Financial Times article discussed being like the US as an aspirational goal for governments in the rest of the world. What struck me is that, deliberately or not, it was written entirely in the past tense.

–My first company commander in the Army (Fort Carson, CO) was Lawrence Wissell, killed in combat in late 1968 during his second tour in Vietnam. He was hard on his subordinates, but I learned a tremendous amount from him about leadership. One of his favorite sayings was, “Everyone wants the privilege of command, but no one wants the burden of leadership.” i.e., unless you make it clear to the people you manage that you put their welfare ahead of your own, there’s no chance they will follow you when times are difficult. Both parties in Congress seem blissfully unaware of this.

The company reported another blowout quarterly result after the close on Wednesday. Yet NVDA is down about 12% since then as I’m writing this, in a slightly down market.

There was a similar period about a year ago, when the stock fell from $140 or so into the low $90s. The reason back then, I think, was that the stock had run so far ahead of other AI-related names that the market rotated in two directions–away from AI into cheaper areas and into admittedly inferior plays on the AI theme that were, however, substantially less expensive.

My cursory glance says this time is slightly different, in that the secondary plays also appear to be selling off.

two things, maybe three, are going on, I think

–Nvidia, Apple, Alphabet (two classes) and Microsoft together make up about 25% of the value of the S&P 500. Nvidia has already been a stellar performer for a long while. now having the largest market cap, about 7.5% of the index, of any S&P 500 member.

It’s extremely well-known. Every professional manager has likely long since made a decision about the stock, the successful managers presumably holding considerably more than the market weighting. Detractors presumably have had no inclination to buy, especially after the rocket ship ride of the past two years.

So, where are the new buyers needed to send the stock higher coming from? Sounds kind of stupid, but it’s a legitimate issue. And I think the market is reading the weakness of NVDA as meaning there are none.

–the US-as-a-third-world-country trade that has (unfortunately for us as US citizens) been a great success since the inauguration is getting long in the tooth. This is partly a question of relative value between the stars of the past year or so, which, generally speaking, have US costs and foreign revenues vs. the laggards (with the reverse structure). Here the gap between the haves—foreign revenues–and the have-nots–foreign costs—has become wide enough, I think, that portfolio managers who have been successful to-date are deciding to lock in gains. They’re doing this by shrinking their AI overweights and building up their domestic economy-oriented positions. They may still be betting on continuing domestic economic weakness, just not so much as before.

–since the inauguration, the S&P 500 is up by about 10%. EAFE, the standard measure of the world’s major stock markets ex the US, is ahead in US dollars by about 40%. Not only is the US at the bottom of the pile among world markets today, but this may be the worst relative market performance of the US since the mid-1980s. forty years ago. Two consequences: foreign portfolio investors are most likely shifting away from the US market to higher potential return markets elsewhere and domestic managers are likely doing the same. It may also be that foreign PMs are being directed by their clients, where collective memories of the Axis powers of WWII may still be vivid, to do so.

That’s what I think today’s US stock market feels like.

Several issues:

–yes, the US has been the worst-performing major world stock market last year, as well as so far this year. This weak performance comes despite the powerful upward thrust provided by US-based AI multinationals. Tancial press is just beginning to work out how poorly, in relative terms, the S&P has been performing–presumably because the last time we’ve seen a situation like this was over a quarter of a century ago

–domestic government policy during the current administration has been the unusual, GDP growth-inhibiting, combination of shrinking the workforce and raising the domestic cost of living through tariffs. The (sensible) stock market reaction has been to focus on bidding up the prices of companies with costs in $US and sales abroad. These stocks are no longer obviously cheap, howeverp. Arguably, they’re at least temporarily overpriced

–the usual stock market answer in situations like this is to roll out of recent winners and pick through recent laggards for possibly underpriced names. But these are by-and-large victims of the administration’s peculiar, anti-growth, economic policies. And to much of the rest of the world, the administration–ICE, in particular–brings echoes of the early 1930s in Europe. Not a good look, either for tourism or for investment

–in addition, there’s the executive branch suppression of the Epstein files, despite a Congressional order to release them. Wall Street is drawing the conclusion that the former is being done to protect high administration officials against prosecution for abuse of children. Again, not the stuff high PE multiples are made of.

Overall, then, it would appear that there’s no clear safe domestic haven to roll into. Hence, the move into EAFE names.

Hard to know how long this will last. My guess is that we’re far enough away from a move back to the US that this isn’t a concern for today. More relevant is how much of the portfolio to shift away from the US economy.

For what it’s worth, I’ve shifted maybe 40% of the money I actively manage out of US stocks, most of that in Hong Kong-listed Chinese names.

So far in 2026, the performance of the major world stock markets is as follows:

NASDAQ -3.5%

S&P 500 -1.2%

Russell 2000 +5.3%

EAFE (=Europe, Australia and the Far East) +7.9%

Things to note:

–the tech-heavy NASDAQ is weakening, both in absolute terms as well as versus other US-listed stock indices, as well as the EAFE index of foreign stocks

–continuing dollar weakness is one cause of US relative poor performance, but it’s only one. Tariffs are another, as several studies indicate they’re uoltimately being paid in very large measure by US consumers. ICE terror is another. There’s also continuing, deliberately induced by Washington, dollar weakness, as well as the fear that Trumpification of the Federal Reserve will push the dollar lower (launching a replay of the 1970s devastatingly bad money policy).

None of this is radically new.

What is, though, is the rotation within the US market away from tech. My read is that this is based mostly in software and on relative valuation. Hard to know how long it will last, since the move is just beginning. But, given Washington policy, the long-term best positioning, I think, continues to be having costs in the US, revenues abroad, and the possbility of shifting operations to, say, Canada, if the ICEification of government policy intensifies.