3 Things Investors Should Be Watching Closely in Q2

On the March 30, 2026, episode of The Morning Filter podcast, David Sekera and Susan Dziubinski discussed how to invest for the second quarter and three key things investors should have on their radar for the new quarter. Here is an excerpt from the show.

How to Position Your Stock Portfolio for Q2

Susan Dziubinski: Given valuations across style, market capitalization, and sectors, how do you think investors should be thinking about positioning their stock portfolios at the start of the new quarter?

David Sekera: I’m still thinking a market weight overall, be it whatever your targeted allocation is based on your own risk style and preferences. So, whatever your percentage of equity is as a percent of your overall portfolio, I’d still be right in that same neighborhood. But I think that with as much market volatility as we’ve seen, as much movement as we’ve seen in growth and value stocks or individual sectors, it’s a good time to take a look at your portfolio and figure out where you should be readjusting those individual positions to take advantage of that. So again, it’s a good time to take some profit in that value sector and some good times to take some profits in the energy sector and look then where to redeploy it, wherever in your portfolio that you are comfortable in the long-term investment thesis in those names but have been hit especially hard, whether that’s growth, AI technology, software stocks, but those stocks that are now trading at much wider margins of safety, you can now dollar-cost average in to the downside.

3 Things Investors Should Be Watching Closely in Q2

Dziubinski: Dave’s going to be hosting his quarterly stock market outlook webinar on Wednesday, April 8. So, mark your calendars, and you can register for this free event via the link that we are providing in the show notes. Dave, not to give too much away ahead of your webinar, but what would you say are maybe three things you’re going to be watching closely during the second quarter, and why?

Sekera: It just has to be what’s going on in the oil markets. Granted, the US economy is less reliant on oil than it’s been in the past, but it still is just going to have huge implications on the economy. And in fact, when I think about oil prices, oil prices have actually been a tailwind for the economy. They had peaked in mid-2022, generally falling ever since. So, now we’re not only losing this tailwind, but it’s now going to be a headwind much more going forward.

Number two, interest rates. As far as short-term rates, those have been heading higher due to higher inflation expectations. And in fact, if I specifically look at the two-year, that yield has risen enough now that not only is the market saying that they don’t see the Fed being able to cut anytime in the foreseeable future, but if you look at the Fed fund futures rates, the market’s now pricing in a 50% probability that the Fed may end up hiking those rates before year-end. And of course, long-term interest rates are going to have an impact on mortgage rates. Those are going higher, so that will reduce the demand for single-family and multifamily homes. That, of course, has a very large and negative multiplier effect for the economy overall. And those longer-term rates, as they go higher, that just increases the cost of capital overall. When you have a higher cost of capital overall and those higher discount rates, that’s going to lower the present value of assets generally today. And corporations with those higher rates are going to want higher rates of return before they reinvest money back into their business.

And then lastly, private credit. And I think that’s one of those areas in the market we’ve talked about a number of times that has been fundamentally weakening. Now, I don’t think this is a systemic issue. I don’t think private credit weakness is going to cause global financial crisis part two. It’s much different than what happened back then, i.e., we don’t have CDO squares that end up being worth zero at the end of the day that blow up bank balance sheets, but I think there are a lot of losses in private credit that are going to need to get recognized before all is said and done there.

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