Morning Note

We've flagged the longer-term AI capex concern multiple times, particular in video commentaries, over the past year or so...  Question today being, is the recent rout in tech stocks a signal that the market is finally sniffing out the risk that turning these hundreds of billions in AI infrastructure investment into sufficient revenue to justify it all may not occur in a market-friendly time horizon? 

Well, that's the case, at least per the headlines.

Next question being, is it the market simply putting investors on notice that the risk exists, only to come roaring back on the likes of Micron's earnings this week, or maybe something more concrete in terms of government entry (investment) into the AI space (as the president hinted after a recent Friday where said capex worry inspired the worst stock market selloff in a year)?

Answer: Time will tell... The last paragraph in the synopsis below speaks to how we're' managing the current setup.

Look for our weekly macro dive over the weekend -- I'll likely walk through some charts with you via video as well... The technicals are interesting right here.

In the meantime, here's your morning rundown*.

Morning Note* — Friday, June 26, 2026

The headline number this morning says the market is "flat," and that's true — but it's the least interesting thing about today's tape. Underneath that calm surface, the market is doing something I find genuinely encouraging: the broad list of stocks is higher even as a small handful of the largest technology names pull the headline index sideways. When the average stock outperforms the megacap leaders like this, it usually means participation is widening rather than narrowing — a healthier foundation than a market levitating on five names.

What's pressuring those few large names is a fresh bout of anxiety over how much is being spent to build out artificial intelligence, and whether the returns will justify it. That's a debate worth having, and I'd rather see it play out as a rotation — money moving into other parts of the market — than as an across-the-board retreat. So far, that's exactly what's happening. Money is finding its way into the more economically sensitive corners of the market and into areas that benefit when borrowing costs ease.

And borrowing costs are easing, for now. Oil has slipped back to roughly where it sat before this spring's Middle East conflict, even with fresh tensions flaring near the Strait of Hormuz this week. That decline in energy prices has pulled longer-term interest rates down to their lowest in about six weeks. It's a welcome reprieve, and we're positioned to benefit from it where we can.

I'd ask you to hold one note of caution alongside it, though. The relief we're seeing is largely an energy story, and energy prices are the most volatile, fastest-moving piece of the inflation picture. The slower-moving, more stubborn drivers of inflation are still very much with us — the most recent reading of the Federal Reserve's preferred inflation gauge actually climbed above 4% for the first time in this cycle. Consumers feel it: sentiment ticked up this month on lower gas prices, but it remains near historic lows, and households are still telling surveys they're worried prices stay sticky. We read the oil-driven calm as real but cyclical — a reason to stay engaged, not a reason to assume the inflation chapter has closed.

Our posture remains what it has been: diversified deliberately across exposures that don't all move together, so that a day like today — soft in one corner, firm in three others — nets out to stability rather than drama. That's by design, and on mornings like this one, the design earns its keep.

This note is for informational purposes only and should not be construed as investment advice or a recommendation to buy or sell any security. Past performance is no guarantee of future results.

*Prepared by Marty Mazorra, Chief Investment Officer, Private Wealth Advisors. Research synthesis and drafting assisted by AI tools under advisor review. All market views, analysis, and recommendations are those of the advisor.