Mike Larson | Editor-in-Chief
Private credit worries. Idiosyncratic loan defaults. They started taking down shares of specialty lenders and Business Development Companies (BDC) months ago. But diversified financials held firm. Until now.
On Friday, the financial sector got pummeled – with both the SPDR S&P Regional Banking ETF (KRE) and the Financial Select Sector SPDR Fund (XLF) dropping sharply. In fact, KRE tanked more than 5%. That was its worst one-day drop since mid-October, as you can see in the MoneyShow Chart of the Day.
Source: StockCharts
I’ve covered the underlying issues in private credit before (See this piece, for instance.) But I’ve also noted that broader indicators of credit stress have held up – and the pain was largely contained to lenders and sectors more directly involved.
Now, that’s starting to change. And it’s not just worries about private credit loan defaults that have markets on edge, either.
Stocks throughout the financial industry are also sagging amid fears AI will disrupt their highly profitable business models. Specifically, investors are asking: If AI software can do more sophisticated tax and financial planning, help investors manage their own wealth, or easily compare prices for even complex insurance coverage…who needs “Big Finance?”
The action definitely bears watching. We NEED sectors like financials, materials, and industrials to continue to hang in with technology taking on water. If they can’t, the broader market is going to struggle.
No, I’m not giving up my big-picture “Be Bold” thesis. But I will continue to note that Q1 – and maybe even H1 – are going to be rougher than we’re used to. Plan (and trade) accordingly!
Last week at the 2026 MoneyShow Las Vegas, I sat down with Oliver Renick (Chicago: Future of Finance) and Cullen Roche (Discipline Funds) to talk about how investing is changing and how your portfolio should change with it.
We covered Cullen’s new book Your Perfect Portfolio, why there’s no single “perfect” strategy, and how to think about diversification in a market full of rotation, volatility, and big valuation gaps between the US and global stocks.
Meanwhile, Oliver broke down the rise of the “pro-tail” investor, how options and convexity are reshaping portfolio construction, and why AI is changing correlations across stocks, gold, and Bitcoin.
No Matter What’s Next in Markets, Our Experts Have YOU Covered!
This is a volatile time in markets. Stocks, commodities, currencies, and crypto are swinging daily – on Middle East headlines, tech earnings, tariff announcements, and more.
Naturally, you have a lot of questions. And the good news is, our experts have YOU covered! We’re bringing dozens of them to the Diplomat Beach Resort April 9-11 for our 2026 MoneyShow Masters Symposium Hollywood Florida – and your pass to learn from them is waiting here:
The SPDR Gold Shares (GLD) has stabilized after retracing 61.8% of the parabolic run that started in mid-November. GLD was close to testing its 50-day exponential moving average (EMA), which it hadn't been near for almost six months, notes John Eade, president of Argus Research.
We pointed out on X recently that the “most viral blog post of all time” may have marked a major low in software stocks. We of course are not CMTs, but this area has proven to be support for the iShares Expanded Tech-Software Sector ETF (IGV) over the last year, too, observes Brent Kochuba, founder of SpotGamma.
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