Is Your Portfolio Positioned for Rising Geopolitical Risk?

Welcome to The Weekly!

Geopolitical tensions intensified this week as conflict in the Middle East escalated, amplifying market anxiety related to a protracted energy supply shock and a repricing across sovereign debt curves. Brent crude oil shot up to the mid-90-dollars per barrel as investors grappled with the conflict’s duration and potential for sustained disruption to global energy supplies.

While consensus is variably pricing a broader conflict, the highest probability outcome in our view is “this too shall pass”, ultimately leaving asset markets in a healthier condition after unwinding the historic degree of crowded bullish positioning we’ve consistently warned about since early November. In the near term, geopolitical suspense will likely give the Powell Fed cover to further delay normalizing monetary policy. 

Onshore, corporate layoffs (namely Morgan Stanley $MS) tied to the AI disruption trade continue to reinforce the Jobless Recovery thesis. Regarding the February Jobs Report, weak negative impulses in Private Sector Employment, Average Weekly Hours, Private Sector Labor Income, and strong negative impulse in Private Sector Average Hourly Earnings in February supported our Jobless Recovery, Structural Uptrend in Productivity Growth, and Continued Disinflation Driven by Housing and Labor theses.

As always, members of our global investor community can trust that our institutional-grade risk management overlays—KISS and Dr. Mo—will help our portfolios navigate these emergent risks better than investors attempting to manage risk without systematic rules or relying on fundamental research alone.

In Case You Missed It

Will AI Drive the Next Wave of Global Equity Leadership?

On Thoughtful Money (watch here), Darius joined Adam Taggart to answer several of the key questions being asked within our global investor community amid accelerating macro and geopolitical uncertainty.

42 Macro is also pleased to announce our new partnership with Thoughtful Money, expanding the reach of our platform to hundreds of thousands of independent investors around the world.  Be sure to check out the discussion to learn more.

Chart of the Week

Along Globalization, The Diffusion Of Internet Technology — Which Is Far Less Productivity-Enhancing Than AI — Contributed To A Jobless Recovery In The Early 2000s

A similar dynamic may be emerging as AI accelerates productivity while simultaneously reducing labor demand across white-collar industries. If AI proves even more productivity-enhancing than internet technology, the U.S. economy could once again feature strong economic growth alongside persistent labor market slack, reinforcing our Jobless Recovery thesis.

Successful Signals From Dr. Mo

On January 28th, 2026, our Discretionary Risk Management Overlay signaled a bullish breakout in Crude Oil $USO. Since the pivot, $USO has appreciated 42%.

Community Spotlight

This week, we’re excited to share feedback from a member of our global investor community. Specifically, the incredible ROI that 42 Macro provides to our community.

It’s always rewarding to see KISS and Dr. Mo deliver meaningful outcomes for investors around the world. We truly appreciate your feedback.