Week in Review: Ceasefire Relief, Sticky Inflation, and 10 Lessons From Our Portfolio

Saturday morning. Coffee's hot, markets are closed, and we have a full week to digest. If you've been following along, this was one of those weeks where every major thread we've been tracking moved at once: the Iran ceasefire held (barely), inflation data came in sticky, and the market started pricing in potential Fed rate cuts again. Let's unpack it all. And distill the 10 portfolio lessons we've earned the hard way.

The Big Picture: A Week of Two Forces

Two forces pulled in opposite directions this week. On one side, geopolitical relief. The fragile U.S.-Iran ceasefire remained intact, and markets responded. The VIX dropped to 19.23 (down 1.33% on Friday), which I find meaningful because it's the first time in a while we've been below 20. As I wrote in Iran Ceasefire Holds, VIX Falls Below 20, and the Fed Cut Window Reopens, I was cautious about the ceasefire's staying power. That caution was warranted. And it's growing. VP Vance arrived in Pakistan this week for talks with Iran, facing a major diplomatic test, but Israel rejected a ceasefire with Hezbollah ahead of Lebanon talks next week, and Israeli drone strikes near a Gaza mosque further underscored that the broader Middle East remains a tinderbox. The Iran ceasefire is holding, but the regional picture is fragile.

On the other side, sticky inflation. The key Fed gauge showed inflation holding at 3% as the U.S. headed into the Iran conflict. That's not catastrophic, but it's not comfortable either. The interesting twist: markets are pricing in the possibility that $4-a-gallon gas actually leads to rate cuts, not hikes, because of the demand destruction it causes. If consumers are spending more at the pump, they spend less everywhere else, which slows the economy, which gives the Fed room to cut. Counterintuitive, but the logic holds. And to be fair, I should note the competing scenario: if the ceasefire collapses, oil spikes back up, inflation expectations reset higher, and rate-cut hopes evaporate. That's the tail risk we're managing around.

Here's the full transmission chain worth understanding: ceasefire lowers the oil risk premium → energy prices decline → inflation expectations moderate → Fed rate-cut odds improve → bond yields stabilize → growth stocks and rate-sensitive financials benefit, while energy lags. That single chain explains most of the sector leadership we saw this week.

The Bloomberg "Odd Lots" podcast highlighted this week what it called "the big macro force that's been driving stocks higher for years". A structural argument about liquidity and passive flows that provides the underlying bid beneath all these short-term catalysts. It's worth a listen, because it helps explain why markets held up so well despite conflicting macro signals.

The net result? A mostly calm week, but with important divergences beneath the surface. The S&P 500 finished Friday at 6,816.89, down just 0.11%. The Nasdaq gained 0.35%, while the Dow fell a sharper 0.56% and the Russell 2000 small-cap index declined 0.22%. A pattern suggesting large-cap growth led while cyclicals and value names lagged. Asian markets had a strong Friday, with the Nikkei up 1.84%, the KOSPI gaining 1.40%, and India's Sensex rising 1.20%. Europe was flat to slightly positive (FTSE -0.03%, DAX -0.01%, Euro Stoxx 50 +0.51%). Not dramatic. Just a market digesting a lot of information at once.

One historical echo worth noting: headlines this week compared the Iran oil shock to the 1997 Asian Financial Crisis. The parallels are strained. The global financial system is structurally different today. But the comparison reminds us that oil supply disruptions in Asia-dependent economies can cascade. It's a scenario worth understanding even if we don't think history will repeat.

What We Got Right, What We Got Wrong

Let me be direct. Our portfolio has been trailing the S&P 500, and I've talked about this openly. Last week's reflection was painful: we identified the right moves (cut underperformers, add core beta) and then didn't execute fast enough. That's the kind of mistake that stings because it's entirely self-inflicted.

The good news: some of the adjustments we did make are starting to work. Let me walk through every position. And then I'll pull out the 10 explicit lessons.

All 10 Positions: Where We Stand

SPY is our core beta anchor, and it's doing exactly what we asked it to do. Up from our entry at $655.83 to Friday's close of $679.46. This position exists because we learned a hard lesson about missing baseline market returns. As I discussed in How Compound Interest Can Turn €500 Monthly Into €1 Million, the simple act of staying invested in broad markets compounds powerfully over time. SPY is our most boring position and arguably our most important one.

TSM was the week's standout performer among our individual names, benefiting from continued AI chip demand. Taiwan's TWII index gained 1.6% on Friday alone, reflecting broad regional tech enthusiasm. The AI chip demand thesis is playing out, and TSM's reasonable forward P/E (the price you pay relative to expected future earnings) makes it a compelling way to play that theme. I'm pleased with this one.

ETH-USD continues to surprise me with strong gains from our $2,056.56 entry. The risk-on sentiment from the ceasefire has clearly lifted crypto alongside traditional assets. This is our highest-risk position by design, and so far it's rewarding the risk.

BAC is working nicely, up from our $49.38 entry. Here's where it gets interesting for next week, though. Financials had a weaker Friday, and I'm watching whether that's a one-day blip or the start of something. The 10-year yield edged up to 4.317%, and the yield curve dynamics still support bank earnings. But if rate-cut expectations firm up, the long end of the curve may compress, which is a mixed bag for banks. Worth watching.

BABA is up modestly from our $125.67 entry. I need to be honest here. Our internal review flagged this position specifically because the original confidence level was low, and the Chinese consumer recovery thesis hasn't materialized the way we hoped. Shanghai's index gained 0.51% on Friday, and Hong Kong's Hang Seng was up 0.55%, so there's some life in Chinese markets. But I'm watching this one with a short leash.

MSFT is essentially flat from our $373.46 entry. Tech (XLK) gained 0.76% on Friday, and Microsoft's fundamentals remain exceptional: strong net margins and solid earnings growth. The thesis here is that a company trading well below its all-time highs with those fundamentals is mispriced. Patience is required.

MRK is near flat from our $120.87 entry. Healthcare had a tough Friday. The defensive sector weakness you typically see when markets feel safer and investors rotate toward growth. That's actually fine for our broader portfolio mix. MRK isn't here to be exciting. It's here to be a ballast.

ADBE remains our most frustrating position, down from our $242.60 entry to $225.35. Adobe is in the middle of an AI transformation story, but the market isn't paying for it yet. At these levels, the stock's forward P/E is well below its historical average. Genuinely cheap for a company with Adobe's margins and competitive position. The 12-month horizon matters here. I'm not cutting it, but I'm also not adding.

COP and XLE. Let me address these together because our portfolio review identified the double energy bet as a structural mistake. COP is down from our $131.70 entry, and XLE is down from $61.18. Having both a single energy stock and the energy sector ETF concentrates risk in one direction. The Iran ceasefire actually hurt energy prices because it reduced the geopolitical supply premium. Oil infrastructure in the Middle East took real damage during the conflict, but the ceasefire means the worst-case supply disruption scenario is off the table for now. Our lesson here is clear: sector concentration creates fragility.

The 10 Lessons From Our Portfolio

Here they are, earned through real money and real mistakes:

The Macro Thread Worth Following

Friday's ADP report showed 62,000 private sector jobs added in March, better than expected. The March jobs report drops next Friday, and it'll be a critical data point for the Fed's thinking. If the labor market is cooling. Combined with sticky-but-not-accelerating inflation at 3%. The window for a rate cut later this year stays open.

Here's what to watch for in the jobs report and how to interpret different scenarios:

That framework is especially relevant for our rate-sensitive positions like BAC and our growth names like MSFT, ADBE, and TSM.

What I'm Watching Next Week

Four things. First, whether the Iran ceasefire survives the weekend and what comes out of the Vance-led peace talks. With the Israel-Hezbollah rejection adding a layer of complexity to the broader regional picture. Second, the Friday jobs report and what it tells us about the labor market trajectory. Third, whether we finally execute on the portfolio adjustments we've been discussing, particularly reducing energy concentration (lesson #2: execute when you decide). Fourth, the 10-year yield at 4.317%. If it breaks meaningfully higher, the rate-cut narrative gets more complicated.

I hope your weekend involves less spreadsheet time than mine will. See you Monday.

This content is for educational and informational purposes only. It does not constitute financial advice. Always consult a qualified financial advisor before making investment decisions. Past performance does not guarantee future results.