Market still primarily focused on fundamentals and earnings. Entered geopolitical situation with solid Q4 numbers; Q1 financials show strong growth. S&P 500 earnings growth expectations rising from 15% to 18%. Key question is how much consumer can absorb higher energy prices.

Need to look at actual data like retail sales this week. Saw higher inflation reports, need to see if consumer slows spending and how that affects earnings revisions. Investors should ignore daily moves, focus on fundamentals, wait for data to see future months.

Consumer sentiment at downside inflection point. Last 10 times sentiment this low, S&P 500 saw double-digit returns following 12 months. Consumer's capacity depends on conflict duration; clock ticking for resolution. Administration has incentive to find exit. Still very bullish on equities for remainder of year and looking forward.

Complicates path for Fed. Tomorrow's hearing with Warsh interesting; historically hawkish but presumed to try to lower rates. Question is how to do that in this environment, potentially adjusting balance sheet. Week will give insights into Fed's forward look.

Healthy reshuffling and pivoting under the hood. Valuations down because earnings estimates up, telling of market feeling uncertainty from war and energy prices. Multiples more attractive. Firm thinks globally; sees tailwinds with earnings in Europe, Japan, overseas. Encourages investors to consider non-US opportunities like KOSPI and Japan reforms.

With flows into investment space, risk of buying good and bad stuff. Time for private credit to ensure understanding of manager underwriting and due diligence. Private markets have higher exposure to software, which could be headwind if software sells off. Under the hood, current sales are not distressed, still quality assets and underwriting. Not seeing systemic problem, just healthy shakeout of not-so-good investments.