Market Insights Recap — Week of February 16, 2026

Hello, I'm Steve Orr, Chief Investment Officer for Texas Capital's Private Bank.

Another lesson today. Decent data, D.C. drama time. What impact are they going to have on our portfolios?

Last week we covered lesson one: pay attention to the tape, not the noise. Lesson two: the trend is your friend. Don't fight the tape. That's the number one rule on Marty Zweig's Trading Rules list. So watch the tape. Don't need to get in front of it. Just trying to out guess the market is for option players, not longs like us. 

If you're confused about the trend looking at a daily chart, you always got to take a step back. Weekly and monthly charts can bring clarity. A good example today is the tech-heavy Nasdaq. This month, index is down about 5%. Looking back into 2025, we see the index peaked in late October, traded basically flat until this month. Is AI dead? The tech revolution over? No. Take a step back. Look at a weekly chart. Last three weeks are negative, broke through a 20-week moving average. Step back to monthly: four months of sideways price action still well above long-term moving averages. So for long-term investing, the dominant trend remains higher. 

Could a major top be forming? Possibly, but with rising earnings estimates and a steady economy, we'd have to see a lot of deterioration in our indicators over months to cut exposure. Always take a step back. Look at the longer-term trend. It is your friend. Our friendly noises came from inflation last week. According to those BLS bureaucrats, consumer prices rose only 2.4% year over year. That nice headline is held down by lower prices at the gas pump and used cars. But the core CPI, which excludes food and energy, is up 2.5%. I don't know about the bureaucrats, but food and gas are pretty important core items for me. 

The main driver for inflation is the growth in the money supply, called M2. Continued deficit spending by Congress injects money into the economy. The money supply continues to grow at about a 4.5% rate, a lot slower than three years ago, but still well above inflation. Now slower rent growth, lower food prices, they're kind of in there, but that's just very temporary. Long-term, still looking for inflation to be above 3. Folks also got excited about January's payroll increase of 130,000 jobs. Frequent insomniacs that watch these videos know there's a "but" coming. Here it is. That number includes big annual revisions. All said and done, the BLS bureaucrat think we only grew about 181,000 new jobs for all of last year. Most of those were in healthcare. In other words, private payroll growth for most of the country stalled out last year. We had a preview of that stall in the fall with the government shutdown. We do not expect payrolls to shoot back up to those 200,000-plus per month level of 2022. The supply of new workers is limited. They don't have the right skills sometimes coming out of school. And businesses, they're still trying to figure out tariff costs and productivity gains, if any, from artificial intelligence. 

Now, policy drives Congress spending and regulation for businesses. This is going to be a big year for policy, even though we don't think Congress is going to do much of anything. From 2001 up to 2020, the world sent manufacturing to China. Global trade peaked and retreated, as it usually does in 50-year cycles. Reshoring became this idea back in the 20-teens. Then it became an emergency during COVID shutdowns. Now it's a reality. Congress is urging reshoring along in a number of ways. $200 billion in tax cuts for business investment, for starters. Immediate full expensing for new plants and equipment. Basically a big tax deduction. Also expanded opportunity zones are coming later this year. 

For consumers, larger tax refunds are on tap this quarter, up to $100 billion according to Wall Street estimates. Congress can do nothing this year because the One Big Beautiful Bill has so many tax breaks and incentives. All of them augur well for growing the economy and increasing earnings. And with increasing earnings estimates and GDP growing over 3%, we'll just need to ride the noise and stay with that primary trend. 

So let's wrap it up. February stock returns, usually a toss up, kind of bumpy. The rotation from AI boom to AI doom continues. But AI is not going to take over everything. Homebuilder stocks and REITs, they're perking up. Dow Transports are still holding near highs. Industrials outperforming. Energy stocks as a group, they're up 20% this year. Over 90% of bank stocks are above their 200-day moving averages. All these are healthy rotational trends away from tech. Interest rates are still stuck in a range. They're going to wait until mid year for the change in Fed chairs. Keep watching the tape. There's plenty of opportunities out there; 'til next time.