Valens Market Phase Cycle Monitor – March 2026 – Keep An Eye On Oil To See Where The Market Goes From Here
March 19, 2026
- Investors Are Growing Pessimistic Just As Growth Accelerates. Uniform Earnings grew a strong 8% in 2024, and they are expected to increase another 15% annualized across 2025 and 2026, driven by significant reinvestment, margin improvement, and long-term capital projects. Businesses are starting to fund capital expenditures with debt, accelerating investment potential, with particular focus on productivity-enabling technologies like AI, data centers, and supply chain modernization.
- Credit conditions are improving. Banks are slowing down their tightening, credit spreads remain historically tight, and C&I demand is rising. The Fed is in the midst of a rate cutting cycle, fueling lower credit costs and an improving borrowing environment. Credit creation may accelerate further this year, fueling incremental growth and investment activity.
- Sentiment concerns have dissipated. With the multi-month stall in the market, many investor sentiment indicators have moved to neutral or even negative levels, offering a floor to a market pull-back barring a material shock.
- Valuations have moderated. Between the tech and software selloff and positive earnings revisions after earnings season, the market’s Uniform P/E ratio now sits at just above 24x, which is slightly above the normal range for this environment.
- Monthly inflections:
- Credit (55% of macro outlook): Positive (no change)
- Earnings Growth (30%): Positive (no change)
- Momentum/Sentiment (10%): Neutral (upgrade)
- Valuations (5%): Neutral (no change)
- Timetable Recommendation: 50% Equity/50 Bond Split for 5-10 Year Money and 5 Month Dollar Cost Averaging.