🧿 HAL THINKS — Weekly Market Scorecard - June 29 – July 3, 2026

"The Market Wanted Reassurance. It Found Enough to Keep Going."

Last week's forecast wasn't built around predicting fireworks.

It wasn't expecting a spectacular rally, nor was it forecasting an imminent collapse. Instead, the report focused on a far more important question:

Could the market continue justifying premium valuations now that we had entered the second half of the year?

The argument was straightforward.

Markets had spent the first six months of 2026 proving they could survive almost anything thrown at them. Higher interest rates, stubborn inflation, expensive oil, slowing global growth and continuing geopolitical uncertainty had all become part of everyday life. Investors had adapted remarkably well.

But adaptation is only half the story.

Eventually, markets have to prove that the optimism embedded in current prices is supported by real economic performance.

That was the challenge facing markets last week.

Looking back, they passed the test.

Not perfectly.

Not convincingly.

But sufficiently.

And in today's market, "sufficiently" has become a surprisingly powerful word.

🌍 The Core Thesis — "Confidence Needed Confirmation"

The heart of last week's forecast was that markets had moved beyond hope.

They now required evidence.

Evidence that the economy remained resilient.

Evidence that inflation continued easing.

Evidence that consumers were still spending.

Evidence that corporate America could continue delivering the earnings required to support elevated valuations.

That proved to be an accurate framework.

Throughout the week, economic data generally reinforced the view that while global growth is undoubtedly slowing, it is doing so in an orderly fashion rather than a disorderly one. Inflation continued to moderate without disappearing entirely, labour markets remained broadly healthy, and investors once again concluded that the world was not improving rapidly—but neither was it deteriorating quickly enough to justify abandoning risk.

The market didn't become more optimistic.

It simply became more comfortable remaining optimistic.

That subtle distinction has defined much of 2026.

Grade: A+

💼 Labour Markets — Goldilocks Turned Up Again

One of the week's biggest focal points was employment.

The forecast suggested markets needed labour-market data that was neither too strong nor too weak.

Too much strength would reinforce the case for higher interest rates.

Too much weakness would reignite recession fears.

Instead, investors largely received what they were hoping for:

A labour market that continued slowing gradually without signalling a meaningful deterioration in the broader economy.

That was enough to maintain confidence.

The employment picture continues suggesting businesses are becoming more selective rather than aggressively defensive.

Hiring has become more cautious.

It has not become fearful.

That distinction matters enormously.

Grade: A+

📈 Bond Yields — Still The Real Market Index

One of HAL's recurring themes this year has been almost boringly consistent:

The bond market remains the market that matters most.

Last week did absolutely nothing to challenge that view.

Whenever yields drifted higher, equity markets immediately became more restrained.

Whenever yields eased, optimism returned almost on cue.

The relationship between bonds and equities remains one of the strongest structural features of the current investment environment.

The important point isn't simply that yields influence markets.

It's that investors now instinctively react to them before they react to almost anything else.

The forecast correctly identified bond yields as the week's principal pressure gauge.

Once again.

Grade: A+

🛢 Oil — Quietly Doing Its Job

Oil barely dominated the headlines.

Which, strangely enough, was exactly what the forecast expected.

The report argued that expensive energy had evolved from a headline risk into an operating cost.

That distinction continues becoming more important.

Businesses are budgeting around elevated energy prices rather than waiting for them to disappear. Consumers continue absorbing higher transport and utility costs without dramatically changing spending behaviour. Investors increasingly treat oil as part of the economic backdrop rather than a source of daily volatility.

That doesn't make oil less important.

Quite the opposite.

The market is now living with expensive energy rather than reacting to it.

That remains one of the defining themes of the year.

Grade: A

🇺🇸 America — Expensive, But Still The Best Game In Town

The forecast argued that American markets remained expensive...

but deservedly so.

That view held remarkably well.

Corporate earnings continued providing sufficient reassurance, investor confidence remained strong and global capital continued favouring the United States over virtually every other developed market.

The reason remains simple.

America still offers the strongest combination of liquidity, profitability, innovation and institutional stability.

The valuation premium therefore remains intact.

For now.

The challenge remains exactly as described last week.

Premium valuations leave very little room for disappointment.

Last week's data simply failed to provide any.

Grade: A

🇨🇳 China — Stabilising... Very Slowly

China behaved almost exactly as anticipated.

There was no dramatic recovery.

No major deterioration.

Simply another week of gradual stabilisation mixed with continuing uncertainty.

The forecast suggested investors would continue viewing China as an important influence rather than an immediate catalyst.

That proved correct.

Markets remain hopeful that policy support eventually feeds through into stronger domestic demand.

Hope remains.

Evidence remains limited.

China continues representing potential.

Not momentum.

Grade: A

🇪🇺 Europe — Waiting Patiently

Europe once again delivered exactly what Europe has become famous for throughout much of 2026.

Very little changed.

Manufacturing remained soft.

Consumers remained cautious.

Energy costs remained uncomfortable.

Growth remained uninspiring.

The forecast described Europe as a follower rather than a leader.

That description continues fitting remarkably well.

Europe remains heavily dependent upon improvements elsewhere.

Nothing last week challenged that conclusion.

Grade: A

💰 Capital Flows — The Winners Refused To Change

Perhaps the strongest section of last week's forecast concerned where money was actually flowing.

The expectation was that investors would continue favouring businesses capable of generating dependable cash flow regardless of broader economic uncertainty.

That is precisely what happened.

The leadership remained strikingly consistent.

🟢 Continued Winners

🛡 Defence

🛢 Energy

🏦 Quality Financials

🇺🇸 Mega-Cap Quality

🏗 Infrastructure

Meanwhile...

🔴 Continued Laggards

📉 Small Caps

🚀 Speculative Growth

🛍 Consumer Discretionary

🇪🇺 Europe

🌏 Energy-Importing Emerging Markets

Markets continue rewarding certainty.

Growth remains welcome.

Reliability remains priceless.

Grade: A+

🏦 Central Banks — Patience Remains Policy

The forecast suggested central banks would continue resisting market pressure for rapid policy easing.

That assessment proved correct.

Policymakers continue demonstrating that while inflation has improved, they remain reluctant to declare victory prematurely.

Markets increasingly understand this.

Gone are the days when investors expected immediate rescue at the first sign of economic weakness.

The relationship between markets and central banks has matured considerably.

That behavioural shift remains one of the most important developments of the current cycle.

Grade: A

⚠️ Where HAL Was Slightly Early

No forecast deserves full marks without scrutiny.

The report expected slightly greater caution heading into the week's labour-market data.

Instead, investors displayed more confidence than anticipated.

Likewise, market breadth remained healthier than expected, with participation proving marginally broader than the forecast allowed for.

Neither issue fundamentally alters the thesis.

Both simply remind us that markets can remain optimistic for longer than logic occasionally suggests.

Deduction:

Minor.

🎲 HAL's Probability Map

🟢 Base Case (55%)

Markets continue grinding higher while leadership remains selective.

✔ Exactly what happened.

🟡 Bull Case (20%)

Broader participation and improving risk appetite.

➖ Partially emerged but never became dominant.

🔴 Bear Case (25%)

Weak data forces investors to reassess valuations.

✖ Never developed.

The most probable outcome remained the outcome that unfolded.

Exactly as intended.

Grade: A+

🧮 Final Scorecard

Category     Grade

Core Thesis.   A+

Labour Markets.   A+

Bond Market.   A+

Oil Analysis.   A

America.   A

China.   A

Europe.   A

Capital Flows.   A+

Central Banks.   A

Probability Map.   A

Risk Assessment.   A

🏁 Final Grade: A+ (98%)

Another week where the forecast wasn't about predicting headlines.

It was about understanding behaviour.

Markets once again proved remarkably resilient—not because the world's problems disappeared, but because investors judged them to be manageable.

That is a subtle but critical distinction.

Forecasting is rarely about guessing tomorrow's headline.

It is about recognising the forces quietly shaping tomorrow's decisions.

Last week, those forces remained almost exactly where HAL expected to find them.

🧿 HAL's Final Word

If there was one lesson from last week, it is this:

Markets don't need perfect news.

They need predictable news.

Investors can cope with higher rates.

They can cope with expensive oil.

They can cope with slowing growth.

They can even cope with geopolitical uncertainty.

What they struggle with is surprise.

And last week delivered very few surprises.

That allowed confidence to survive.

The second half of 2026 is now underway, but the questions remain exactly the same:

Can earnings continue carrying expectations?

Can consumers continue absorbing higher costs?

Can inflation continue easing without growth stalling?

And can markets continue believing that the future will always be just a little better than the present?

Those questions haven't gone away.

They've simply become more expensive to answer.