While tech investors are wringing their hands this week, traditional investors in boring sectors are cheering. It's a tale of two different markets with certain asset classes that had previously been abandoned now shining, while 
growth and AI-related darlings are suffering. The inspiration for this week's musings is the 1996 movie, "Courage Under Fire". Here’s some trivia about the movie:
- This movie was released in the Summer of 1996 in a crowded field, likely causing the movie to be somewhat forgotten. Movies that debuted that Summer include "Independence Day,""Twister,""The Rock," and "Mission Impossible." Yet, despite the strong competition, "Courage Under Fire" managed to gross more than $100 million at the box office on a budget of $46 million. It was completely snubbed by the Academy Awards for films such as "The English Patient" (yawn), "Shine,""Jerry Maguire," and "Sling Blade."
- The movie is loaded with talented actors, with some relatively new faces: Denzel Washington (one of my personal favorites), Meg Ryan, Lou Diamond Phillips, Mat Damon, Scott Glenn, Sean Astin, & Michael Moriarty to name a few.
- Damon, not yet a household name as "Good Will Hunting" would be released the following year, lost more than forty pounds during the filming of this movie. Because he was not yet a big star, he did so almost entirely on his own, without the help of trainers. Director Edward Zwick was concerned about Damon's health and ordered him to start eating again, but Damon refused. It would take Damon two years to get his body back to normal, and he didn't even get a nod for "Best Supporting Actor."
- Meg Ryan is terrified of flying, so she had it written into her contract that she would not have to film inside a helicopter. The crew used a hollowed out Huey shell bolted to a flat bed truck to simulate the flying sequences.
- Denzel spent countless hours visiting with veterans to learn more about PTSD syndrome and he spent time with army cavalry units at Fort Hood to prepare for his role.
- While the movie involves the vetting of a female officer for the Medal of Honor, only one female has ever been awarded the Medal of Honor - Dr. Mary Edwards Walker, a civilian contract surgeon (acting assistant surgeon) with the Union Army during the American Civil War.
Here's what we've seen so far this week...
Sometimes You Have To Take A Deeper Look. There are multiple stories going on at the same time in "Courage Under Fire" and just when you 
think you have them figured out, they take an unexpected turn. Captain Walden is up for the Medal of Honor, but the real story, when revealed, is much darker. Just as Denzel's character must investigate to get to the truth, investors need to take a deeper look before making rash investment decisions. On its face, the S&P 500 Index is flat for the year. The index has been dragged down by pressures on over-extended, risky sectors. However, other areas of the market, small caps, mid-caps, and international 
equities have flourished so far in 2026. The index also has a bit of a math problem as we discussed last week. Technology stocks, which are down approximately 2% for the year, and the Mag 7 specifically, which are down 6% year-to-date, have pulled the S&P 500 Index down because they make up more than 30% of the index. However, the other 493 names in the index are rallying. In fact, the number of stocks in the S&P 500 Index that are actually out-performing the index 
itself are at the highest mark in history. In other words, we may be seeing one of the broadest rallies in equities history. That, by the way, is bullish, not bearish. Speaking of bears, they have been working overtime the past few weeks with some of the softness in equities. Most recently, the industry phrase "Lost Decades" has resurfaced. While the term is no incorrect, as there have been periods where equities did not rise dramatically, the term is also misused. The term comes from periods where the price of the S&P 500 is flat for a period of about 10 years or more. However, the "price" of the index does not account for dividends and capital gains. Other investments, such as a mutual fund, ETF, etc., will produce additional gains other just price movement. In fact, a basket of aggressive mutual funds would have produced a total return north of 40% during the "Lost Decade" from 2000 to 2013. Be careful not to fall into the trap of taking industry phrases as gospel.
Courage Under Tariffs? As I'm finishing up the Market Musings, the Supreme Court, in its infinite wisdom, decided to hand down the ruling on the President's ability to impose tariffs (on a Friday, nonetheless). So far, the response of the market has been rather benign. Isn't it interesting 
that when Trump announced "Liberation Day" on April 2nd of last year the S&P 500 dropped more than 10% over the following 3 days, yet today, after learning that tariffs are finally over, the S&P 500 Index is flat? But, I digress. Over the past 10 months, tariff revenue has exploded and has been helpful in offsetting fiscal government costs. In 2025, net revenue amounted to more than $194 billion. That revenue was largely used to offset the costs of many of the tax breaks in the One Big Beautiful Bill Act (OBBBA). So far in 2026, at least $90 billion in net revenues have been realized. The Supreme Court's ruling (6-3) struck down the President's ability to raise tariffs in "peacetime." The premise of the Trump Administration was that language in the International Emergency Economic Powers Act (1977) allowed for the President to place levies on products being imported from other countries. The Court has ended that debate. The question now becomes - what's next? Does everything the Trump Administration put into motion with regard to tariffs reset? 
Who stands to benefit most? The answers to those questions remains uncertain. First, U.S. Trade Representative Jamieson Greer made it clear in an interview last month that even if the Supreme Court struck down tariffs, the administration had prepared plans for new and different duties that would "start the next day." This would likely make the Supreme Court's decision today relatively benign with regard to policy. Second, what about the revenues collected to-date - will they have to be refunded? While the Supreme Court vacated the tariffs collected, the justices did not provide a mechanism for the refunds. It's also important to note that non-IEEPA tariffs (such as on steel & aluminum) will remain in place and generate billions in monthly revenue. As Trade Rep Greer mentioned, The 1974 Trade Act (Sections 301 & 122) and Section 338 of the 1930 Tariff Act, could be used to impose new duties that would potentially offset the refunds mandated by the Supreme Court. Things will likely get messy from here with regard to timelines, amount of refunds, and logistics. Third and last, given that the highest and most lucrative tariffs were imposed on products from China, that country stands to benefit most from the Supreme Court's ruling. After China, next in line would be the EU that would see a benefit. The U.S. consumer could see some benefit as perhaps inflation on certain items may ease, which could make a case for 1-2 rate cuts by the Fed before year end. Time will tell how this affects fiscal policy moving forward.
Follow The Facts. In conducting his investigation into whether or not Captain Walden deserves the Medal of Honor, Denzel's character must grapple 
with the investigation into his own actions in the Gulf War. The facts of both cases point to tragedy and courage. It's the facts - i.e., hard data - that allow investors to reach the correct conclusions. The 4th quarter GDP report was released today, and was disappointing to say the least. The market was expecting GDP to come in at +3.0%, but the preliminary number was +1.4%. The data in the BEA's report shows that government spending was down -0.9%, taking off nearly a full point from the final number. The government shutdown in October of last year is being blamed for the drop. 
So far, the Atlanta Fed, which clearly under-estimated the effects of the government shutdown in their Q4 number, has already estimated Q! GDP tom come in at +3.1%. Could the Atlanta Fed be under-estimating a rebound in government spending in Q1? The Weekly Economic Index tracked by the St. Louis Federal Reserve would indicate that economic growth is strong and improving in Q1. On the industrial and manufacturing front, things are looking up and 
do not suggest an economic slowdown at this point. Industrial Production for January came in higher at +0.7% versus +0.4% expected. Likewise, Manufacturing Production came in at +0.6% versus +0.4% expected. The year-over-year trend for Industrial Production has been trending higher over the last 12 months. Corporations are seeing higher revenues, as reported in Q4 earnings releases. In fact, revenue growth for S&P 500 companies is the highest in almost 3 years. The U.S. consumer drives the boat that is the economy. As long as consumers spend, companies make money, and stock prices are a reflection of that. So far, consumer spending is steady in the early part of 2026, similar to 2025. Redbook Sales are up +7.2% year-over-year, which is well above the 4.4% historical average. In addition to spending, consumer balance sheets look healthy. Households in the U.S. look the healthiest from a debt perspective since the end of the Dot.com recession. Similarly, U.S. corporations have the lowest debt ratios in more than a decade. As long as those measurements remain attractive, economic growth is likely to continue. One quick note, we're keeping an eye on corporate debt as it relates to "private credit." That's a sector that some corporations, most specifically in the tech sector and AI-related, have added debt that is somewhat "off the books." It warrants scrutiny to determine if the deterioration in private credit is worsening.
Here's the medal of honor ceremony and moving ending to the film...
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