The week was defined by rising geopolitical risk, valuation recalibration in equities, and defensive positioning across asset classes.
While macro data remained broadly stable, markets shifted focus toward liquidity concerns in private credit, sector-specific
weakness in financials, and escalating Middle East tensions that intensified into the weekend.
Key Themes
- Geopolitical Escalation: U.S.–Israel strikes on Iran and subsequent retaliation drove a sharp risk premium in energy markets.
- Defensive Rotation: U.S. 10-year yields fell below 4% as investors moved into Treasuries, while gold traded above $5,200/oz. Equities softened modestly, led by financials and cyclicals.
- Private Credit Scrutiny: Activist tender offers targeting credit funds at 20–25% discounts to reported NAV raised concerns that portfolio valuations may be overstated and highlighted liquidity mismatches in semi-liquid structures. The development pressured BDCs and alternative asset managers, weighed on financials, and contributed to the Dow’s underperformance during the week.
