Friday was a defensive session, led by Health Care (XLV), where pharmaceutical stocks (PPH) are enjoying a huge rally.

Heat Map

Technology (XLK) was the poorest-performing sector, as big names were hit hard. Defensive sectors and stocks enjoyed solid sessions.

Oil stocks were higher ahead of the attack on Iran over the weekend.

The more nuanced view of the market saw only slight revenue gains, low volatility, and quality names.  Small-caps were hit the hardest across the board.

Buy Backs to the Rescue

Buybacks vanished last month but are poised to come charging back. This is critical for a market looking for terra firma and a spark.

The Ten-Year Bond Yield

The 10-year bond yield (TNX) slipped under 4.0%, and the financial media tried to make it a negative development.

Investors are in trouble when higher bond yields are at the end of the world, and lower bond yields are the end of the world. We want and need yields to move lower.

Watching WTI

All eyes are on West Texas Intermediate (WTI) after the Operation Epic Fury attack on Iran. There should be a bump, but I wouldn’t be surprised if the “news” was already baked into the price going into the weekend.

Today’s Session

The usual fearmongering and second-guessing dominate the coverage of Operation Epic Fear. Nobody wants this to last long. By the same token, I find it astonishing anyone would minimize the goals and growing threat of Iran’s leadership.

On that note, their attacks on neighbors are intriguing.  The conventional wisdom is that this is being done to put a wedge between Arab nations and the West, especially those nations that host a US military presence.  But why haven’t Turkey and Azerbaijan been attacked?

And there is the new calculus on Iran's part targeting hotels, airports, and private residential buildings.

The Gulf Cooperation Council has long-term plans to be a player in the world long after the oil runs dry. These attacks underscore the threat Iran presents to the world and add more credibility to the efforts of the United States and Israel to neutralize it.

Even before this weekend, the market was skittish, which is why we raised a significant amount of cash in the model portfolio.

I anticipate putting it to work very soon – there are screaming buys out there, but emotions are in the driver's seat, and the bias is to the downside.

Please position yourselves to buy the dip as we stretch into oversold territory.  Not trying to pinpoint a bottom, but want to be opportunistic.  Meanwhile, something must give with the narrow trading range the S&P 500 has been locked in since late October.

Charles discusses Operation Epic Fury and the potential impact on the market.  Click on the link to watch it. https://cdn003.wstreet.com/videos/CharlesPayne-20260302.mp4

Comments

Seems like this week is going to provide lots of opportunity to buy the dip!! Shayne Phillips on 3/2/2026 9:00:03 AM

Not as big of a dip as most expected. I think that gives everyone something to hold onto in terms of this action being necessary, precise and relatively short in duration. Let's find some dips while we can. Mike Mayone on 3/2/2026 12:36:23 PM

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