Daily Spotlight: First-Quarter Segment Returns
Bonds lead stocks in a challenging market landscape.
In the first quarter of 2026, bonds have modestly outperformed stocks, although both asset classes are currently in negative territory. The Stock-Bond Barometer model suggests that both stocks and bonds are near fair value, leading to a market-weight stance on large-cap stocks, particularly in the Information Technology sector. Meanwhile, small- and mid-cap stocks are recommended for 15% of equity allocation, reflecting better valuation opportunities.
Key Takeaways
- 1.
In 2026, bonds have outperformed stocks, though both remain in negative territory.
- 2.
The recommended allocation for small- and mid-cap stocks is 15% of equity exposure.
- 3.
Global stocks showed surprising performance in 2025, but U.S. stocks are expected to regain dominance.
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