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Iran, AI Reassessment, Prosperity, and Ice

  • Writer: Doug MacGray
    Doug MacGray
  • Mar 1
  • 4 min read

March 1, 2026


GEOPOLITICAL EVENTS: Last week, I briefly discussed geopolitical events, and the possibility of fighting in the Middle East. As I sit and write this, the information is fairly sparse, but the U.S. has attacked Iran. Events will continue to unfold as the weekend rolls on (I write this on Saturday morning generally), and investors will be figuring out what to do on Monday morning. The short-term effect is often a decrease in market prices as some investors just want to get out of risk and into safety. More broadly, investors will look at any potential disruptions in supply chains (Iran is on the Persian Gulf, Gulf of Oman, and Arabian Sea where a lot of commercial traffic flows), quick changes to commodity supplies and prices, namely oil, and the resulting impact on overall prices, i.e., inflation. According to the International Monetary Fund, geopolitical events cause an average decline of 1% in stock prices in developed economies, and 2.5% in emerging market economies. The economic uncertainty sparked by such events can also fuel already existing dynamics and amplify them, and so we don't hang our hat on that 1% number, and we will all watch this very closely. As with recent precedent (Venezuela, US/Israel's attack on Iran's nuclear sites, US air strike to take out Qassem Soleimani), this may turn into a nonevent in the markets by midweek. But in a scenario where we are now involved in a drawn out, regional conflict with heavy missile exchanges, activated proxies in Lebanon, Iraq, Syria, etc., and disrupted shipping lanes, oil prices could spike or a longer period and stock price volatility and uncertainty may last longer.


TECH STOCKS PULL BACK: The NASDAQ Composite pulled back by over 1% for the week, pulling the S&P into negative territory with it. Bank stocks got in on the negative slide on Friday due to worries about AI and issues in the private credit industry. The main issue with tech and AI stocks is simply uncertainty. We have been asking this question for a long time: Do the future earnings of these AI companies support the high prices of those stocks? This is probably a healthy reassessment of trading activity which has led to the rotation of the stock rally into other areas of the markets, specifically international, emerging markets and small and mid-cap stocks. Unlike former weeks, the Russell 2000 lost more ground, decreasing by 1.18%.



LONGER-TERM PERFORMANCE: Below are the annualized three-year and five-year numbers for these same indices.


PRODUCER PRICES ROSE IN JANUARY: Wholesale prices, as measured by the Producer Price Index (PPI), rose 0.5% in January. Year over year the PPI Index is up 2.9%, which is down a little from last month. Prices of goods decreased, a good thing, but increases in prices for machinery and equipment rose 14.4% in January.


SUPPLY OF MONEY: It stands to reason that the more money that exists in the economy, the more inflation will rise. Thus, we watch the increase in money supply carefully. In the past year, the US M2 Money Supply is up 3.96%. The average growth rate is about 6%, so we are running cool in that department which should help with the inflation issue.

COMING EVENTS: The Iran fighting will dominate the news this coming week, but there will be economic reports that move markets. The closely watched ISM manufacturing and non-manufacturing monthly indices will be updated. Retail sales, payroll, and unemployment reports will be released. All will be influential.


PROSPERITY: Our mission statement, from day one, has been essentially the same, the ultimate goal of which is to help clients "to a more prosperous future." We purposely chose the word "prosperous" because it can have a very broad meaning. A prosperous life, in our opinion, is not limited to a big financial balance sheet. I just read an article that does seem to limit the word "prosperity" to the financial kind, but it still seems to be working toward the same point. Here is a quote from that article:


"America's problem is not that it has too much prosperity. It's that prosperity has been asked to deliver something it cannot provide: meaning. And a society too focused on material wealth begins to erode its connections to those more impactful human pursuits."*


What do you think about that quote?


*Our New Prosperity Paradox, John Coleman, February 27, 2026, onpurpose.substack.com/


NO THEY DID NOT!: I was in a meeting last week, and a man was telling us of a time in his bookkeeping business when "the wheels were literally coming off." I wanted to tell him, "No! The wheels were not literally coming off; they were figuratively coming off!"


Thank you for letting me vent...when people misuse that word my head literally explodes.


TOUGH ICE: I don't know about where you live, but just getting to work the day after the snowstorm was difficult. The ice buildup on my car was so bad that my scraper just wasn't up or the job.



Have a great week!


Our purpose is to honor God by helping our clients see the objective, find the path, and navigate past the obstacles to a more prosperous future.



Douglas R. MacGray, J.D., C.F.P. ®

President

Stonecrop Wealth Advisors, LLC

Direct | Cell | Fax

(610) 628 4545




"There is only one straight course, and that is to seek the truth and pursue it steadily." William Henry Harrison*


"Make level paths for your feet and take only ways that are firm." Proverbs 4:26


*In commemoration of the 250th anniversary of the United States, I am finding a quote from a president each week, in order. This is the ninth week, and William Henry Harrison was our ninth president.


SOURCES:


(c) 2026 Anno Domini, Stonecrop Wealth Advisors, LLC, All Rights Reserved


Investment advisory services offered through Stonecrop Wealth Advisors, LLC, a Registered Investment Advisor with the U.S. Securities and Exchange Commission.


SDG

*S&P 500: This is a measure of the performance of the 500 largest companies in the United States, and it a common index to track the performance of U.S. equity markets, especially the large cap markets.

*MSCI All Country World Index X US: This is a broad measure of the performance of worldwide equity markets excluding the United States.

*Bloomberg U.S. Aggregate: This is a measure of the U.S. bond markets.

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