In the Loop – April 10, 2026
“In The Loop” is designed to give you a short update reflecting major developments, earnings, and investment trends across some core Equity Income and Growth holdings. All clients should be aware that individual buy/sell recommendations will be conveyed directly to you on an individual basis. Have a great weekend.
The recent headlines are dominated with the Iran War and the wide range of outcomes, which to many of us is terrifying. I will touch on this within this update, but first I would like to Congratulate all the Michigan Basketball fans on their victory. Before Michigan tipped off in the National Championship game, Coach Dusty May’s message to his team was simple: trust your preparation, be yourselves, and focus on each possession—not the banner. If I translate that advice into our world, it will sound like sticking to your financial plan instead of reacting to headlines or market noise and focus on your controllables: savings rate, asset allocation, rebalancing, and risk management, rather than the scoreboard of today’s index level. In that same spirit, this weekly note is about helping you stay grounded in your financial game plan, especially when markets feel like a championship atmosphere.
Preparations- What’s Moving Markets Near-term and Why
The U.S.–Iran conflict and the closure of The Strait of Hormuz remain the core geopolitical risk: roughly a fifth of global oil supply has been disrupted at times, producing 1970s style shock analogies and leaving markets highly sensitive to every headline about ceasefire talks or renewed escalation. As of Wednesday, Markets are signaling a sigh of relief that we did not wake up to a society in rubble. Any “Ceasefire” should benefit the US the most, politically and militarily. Markets gave us their opinion on Wednesday with a massive 2.5% single day rally. It is a fluid situation, but for today it is moving in the right direction.
Since the Iran war began in late February, oil has swung from the low 70s to nearly 120 dollars a barrel and is now holding under 100 as markets price in sustained supply risk. Why does this matter? Elevated oil prices work like an extra inflation tax on consumers and keeps the Fed cautious. Higher energy costs lift headline inflation and squeeze real disposable income, leaving households with less to spend on everything else.
The Fed has held rates steady and its latest projections point to essentially “higher for longer,” with only one cut penciled in for 2026, and some firms now openly questioning whether we see cuts at all this year. Our team believes we will see cuts in the 2nd half of this year.
We see the growth sweet spot today with Oil priced between $70-$85/barrel, the 10-Year US Treasury yielding between 3.75-4.50%, ISM greater than 50 and tight credit spreads. This would allow investors to refocus on Earnings or maybe even the success of Artemis II. Let’s hope for a successful landing later today.
Even though we acknowledge the risks posed by geopolitical tensions and energy market disruptions, we see a constructive economic backdrop. Evolving conditions are creating opportunities across select areas of the market amid resilient underlying fundamentals.
Focus on Each Possession
This can be described as small planning tweak, a reminder about risk, or an opportunity worth watching.
Driven by unprecedented investment in artificial intelligence, cloud infrastructure, and semiconductor capacity, the technology sector remains the focal point of the market. However, the narrative is evolving. Investors are no longer impressed by spending alone—they want to see measurable returns.
As we move through Q1 earnings, the key question is whether these heavy investments are beginning to translate into real revenue growth and margin expansion. Last quarter offered a preview: both Meta Platforms and Amazon exceeded expectations, yet their stocks declined as concerns grew around rising AI-related capital expenditures without clear payoff.
This earnings cycle will likely center on monetization—how effectively companies are converting AI investments into earnings power. Cloud demand trends and early indicators of profitability will be critical. Equally important is whether growth begins to broaden beyond a narrow group of mega-cap leaders, signaling a healthier and more durable phase for the sector.
Energy has re-emerged as a key area of focus, supported by rising oil prices tied to ongoing geopolitical tensions involving Iran. This environment continues to benefit traditional oil and gas producers, creating a favorable near-term backdrop.
At the same time, a second structural driver is gaining importance: the rapid increase in electricity demand driven by AI and data center expansion. This shift is elevating the role of utilities, nuclear power, and renewable energy alongside traditional hydrocarbons.
The result is a sector supported by both cyclical and secular forces. Elevated oil prices can enhance near-term profitability, while long-term demand for power infrastructure positions energy as a critical enabler of the digital economy. This dual dynamic makes energy one of the more strategically significant sectors to monitor this earnings season.
The industrial sector is gaining traction, supported by two powerful themes: rising global defense expenditures and the buildout of AI-related infrastructure.
Geopolitical uncertainty is increasing demand for defense systems, aerospace platforms, and advanced military technologies, driving a steady pipeline of government-funded projects. At the same time, AI expansion is fueling demand for data centers, construction services, and energy infrastructure.
This places industrial companies at the intersection of national security and technological advancement.
Firms involved in engineering, manufacturing, construction, and power systems are seeing renewed relevance as capital flows into these areas. Importantly, many of these investments are long-duration projects, offering improved visibility into future revenue streams.
As a result, industrials may be one of the more compelling sectors to watch this earnings season, given their exposure to both geopolitical and technological tailwinds.
The previous quarter highlighted strong—but gradually moderating—growth in large-cap technology, largely driven by AI investment. At the same time, other sectors such as financials, healthcare, and utilities began to show signs of relative improvement. A key question now is whether growth continues to broaden or remains concentrated among a small group of leaders.
At the macro level, tariffs, inflation pressures, and geopolitical developments in the Middle East continue to influence the outlook, particularly for energy, supply chains, and consumer-driven industries. Management commentary around pricing power, cost control, and capital allocation may ultimately carry as much weight as the headline earnings figures.
For investors, the message is straightforward: selectivity and flexibility are essential. This is a market where outcomes will vary widely across sectors and companies. Positioning in businesses that can navigate uncertainty while still generating consistent returns may prove to be the differentiator. Think “Pre-War” economy and National Resilience.
Individual Company Updates
Alphabet continues to push aggressively into energy and AI infrastructure, highlighted by its partnership to deploy one of the world’s largest battery storage systems to support data center operations. At the same time, its DeepMind division is advancing the AI ecosystem with new open models designed for edge deployment, reducing reliance on centralized cloud computing. Combined with deep collaboration with GPU providers, Alphabet is positioning itself as a vertically integrated AI platform spanning hardware, software, and energy.
Amazon is expanding both its AI infrastructure footprint and connectivity capabilities, with AWS remaining a key platform for high-priced, in-demand GPU capacity. Strategically, the company is also pursuing satellite expansion through its low-Earth-orbit initiative, aiming to strengthen its global data and communications network. This reflects a broader push to control both compute and distribution layers in the AI-driven economy.
Nvidia remains at the center of the AI buildout, with demand for its GPUs far exceeding supply and driving notable price increases. Even as next-generation chips are introduced, tight availability and extended lead times underscore the structural imbalance in AI compute. This dynamic reinforces Nvidia’s pricing power and provides strong revenue visibility, positioning the company as a critical enabler of the entire AI ecosystem.
Broadcom is solidifying its role as a strategic AI infrastructure partner through long-term agreements to develop custom silicon and networking solutions for hyperscalers. Its deepening relationship with large AI platforms highlights a shift in the industry toward vertically integrated, infrastructure-heavy models where control of compute and connectivity is paramount. This transition elevates Broadcom from a component supplier to a core architect of next-generation AI systems.
ExxonMobil, in partnership with QatarEnergy, has initiated LNG production at its Golden Pass facility in Texas, signaling the early stages of ramp-up for one of the largest U.S. export projects. The first shipment is anticipated in the coming quarter. With global natural gas supplies remaining constrained, the project positions Exxon to capitalize on sustained strength in LNG demand and pricing.
Flowserve is benefiting from a broad-based recovery in industrial spending, particularly across energy, power generation, and infrastructure markets. The company continues to see solid order momentum and backlog growth, supported by demand for aftermarket services and mission-critical flow control equipment. As global investment trends shift toward energy security, LNG expansion, and grid reliability, Flowserve is well positioned to capture higher-margin opportunities while improving operational efficiency and cash flow conversion.
GE Vernova is emerging as a central beneficiary of the global push for electrification and grid modernization, driven by surging power demand from AI data centers and industrial reshoring. The company is seeing strong momentum across its gas power, grid solutions, and electrification segments, with growing order activity tied to utility upgrades and capacity expansion. As reliability becomes a top priority, particularly in the U.S., GE Vernova’s turbine technology and grid infrastructure capabilities position it as a key enabler of large-scale, stable power generation.
Formidable Asset Management (“Massey Romans Capital”) is an investment adviser registered under the Investment Advisers Act of 1940. The information presented in the material is general in nature and is not designed to address your investment objectives, financial situation or particular needs. Prior to making any investment decision, you should assess, or seek advice from a professional regarding whether any particular transaction is relevant or appropriate to your individual circumstances. Although taken from reliable sources, the Firm cannot guarantee the accuracy of the information received from third parties.
The opinions expressed herein are those of the Firm and may not actually come to pass.
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