HOTLINE
Hotline Archive
March 27, 2026
This is John Bonnanzio with a Fidelity Monitor & Insight Hotline update for Friday evening, March 27.
On Monday March 30, we will make the following Model Portfolio trades:
In the Unique Opportunities Model we will sell all of Small Cap Growth Index [FECGX] and use the proceeds to increase our existing position in Mid-Cap Stock [FMCSX] to approximately 25%, up from about 12%.
In the Select Model we will sell our roughly 16% stake in Select Financial Services [FIDSX]. With the proceeds, 1/3 will be added to our existing position in Select Industrials [FIDRX], increasing that stake to about 20%, up from about 15%. With the remaining 2/3 we will establish a new, roughly 11% position in Select Consumer Staples [FDFAX].
Also in the Select Model we will sell 1/4 of Select Consumer Discretionary [FSCPX], adding the proceeds to our existing position in Select Technology [FSPTX], boosting its weight to approximately 30%, up from 26%.
In the Growth Model we will sell 1/8 of Equity-Income [FEQIX]. With the proceeds, we will increase our existing position in Mid-Cap Stock [FMCSX] to about 15%, up from 11%.
In the Annuity Sector Model we will sell all of VIP Financials [FONNC]. With the proceeds of the sale, 1/3 will be added to our existing position in VIP Industrials [FBALC] increasing that stake to approximately 20%, up from 15%. With the remaining 2/3 we will establish a new, roughly 10% position in VIP Consumer Staples [FCSAC].
Also in the Annuity Sector Model we will sell 1/4 of VIP Consumer Discretionary [FVHAC], adding the proceeds to our existing position in VIP Technology [FYENC], boosting its weight to about 30%, up from 26%.
While we will have more to say about these trades in the April newsletter, our main concern is that energy prices may remain elevated for a sustained period of time, causing a slowdown in GDP (one that is probably more pronounced abroad than here at home). These moves are meant to increase our stake in sectors benefitting from AI spending (which isn’t likely to be affected much by rising energy prices), while reducing exposure to the increasingly competitive financial sector. They also allow us to reduce overall portfolio risk in our more aggressive Select and Unique models.
There are no other model portfolio trades advised.
Turning to the financial markets, U.S. stocks continued to fall this week amid investor concern that the Strait of Hormuz could remain largely closed and that negotiations with Iran may not lead to an easy solution. Stocks did gain ground mid-week when President Trump said he had offered Iranian “leadership” (via Pakistan) a 15-point ceasefire proposal. But that appeared to be dismissed by some Iranian officials, causing stocks to resume their descent toward correction territory.
U.S. stocks (and bonds) also reacted negatively to a hotter-than-expected report of producer prices. With the PPI up 0.7% in March over February (a 0.3% rise was forecast), the likelihood of a 2026 rate-cut dimmed. Investors also marked down high-multiple stocks whose future earnings, some believe, might be less attractive against a backdrop of higher Treasury yields.
For the week through Friday’s close, the tech-rich Nasdaq Composite slumped 3.2% versus “only” 0.9% for the more economically sensitive Dow Jones Industrials. For its part, the S&P 500 (which is also tech-rich) declined 2.1%. In contrast to those performances, the economically-sensitive small-cap Russell 2000 managed to rise 0.5% whereas the Russell Midcap gauge slipped 0.2%.
Overseas markets had been faring worse than our own since the start of the war, but not this week. With so many developed and emerging markets already in correction territory, some investors saw opportunity in their lower valuations. And, relative to U.S. equity indexes, foreign gauges typically have much smaller tech weights. That said, fractional gains were the best that London’s FTSE 100 (up 0.5%) and the more geographically diversified Stoxx Europe 600 (up 0.4%) could muster. And, for its part, Japan’s Nikkei was flat for the week.
As for the crude oil market, as one might suspect, it continued to be quite volatile. On Wednesday, for example, a barrel of West Texas Intermediate had briefly retreated more than 10% from Monday’s $100-plus high. But as of Friday’s close, its price had jumped back to $100.83, an increase of 2% from the week before.
As for the bond market, the Treasury’s auction of 2-year, 5-year and 7-year notes was not well received. In other words, with low demand their yields were higher that expected – meaning bond-buyers needed to be compensated for heightened inflation risk. The yield on the benchmark 10-year Treasury rose 5 basis points this week to 4.44%. (Bond prices move inversely to their yields.)
| Our model performance as of Friday's close is listed below: | ||
|---|---|---|
| Week | YTD | |
| S&P 500 | - 2.1% | - 6.7% |
| Barclays US Aggregate Bond | - 0.1% | - 0.7% |
| Income Model | - 0.3% | - 1.6% |
| G&I Model | - 0.8% | - 2.4% |
| Growth Model | - 1.4% | - 4.2% |
| Select System | - 2.0% | - 6.9% |
| Unique Opportunities Model | - 1.3% | - 3.7% |
The April newsletter will be posted on our website Wednesday April 1 and will mail out early the following week.
Finally, with the market closed for Good Friday, our next regularly scheduled Hotline update is Thursday evening, April 2.
Fidelity Monitor & Insight's Hotline is updated on Friday evenings or whenever the Dow moves 1,000 points or more in either direction.