MRM Commentary

Commentary

Monthly Investment Commentary

October 2026

      Remaining on the 'Good' Growth Path

        One of the hallmarks for the U.S. economy over the last few years has been its resiliency. This calendar year has been no exception as the war in the Middle East led many a market prognosticator to pencil in the potential for a recession stemming from the effects of the Middle East war. Needless to say, not only has a downturn failed to materialize, but overall growth has continued.

        MRM NET COMPOSITE PORTFOLIO RESULTS (As of 9/30/2026)
        MRM Group claims compliance with the Global Investment Performance Standards (GIPS®).
        Please contact MRM Group to obtain a Compliant Presentation and/or MRM's list of Composite descriptions.

        MRM Portfolio

        The Macro Backdrop
        Oftentimes, investors look towards the labor markets for signs of not just where current economic activity stands, but also where things could be going in the months ahead. Interestingly, the monthly employment report’s nonfarm payrolls and unemployment rate are certainly not leading economic indicators; rather, they are coincidental, at best. Nevertheless, the markets did receive a potential scare a couple of months ago. Indeed, new hiring came in on the negative side of the ledger in July, accompanied by downward revisions to the prior two months.

        Inflation: Can the 2% Target Ever be Attained?
        Can the Fed’s 2% inflation target ever be attained? Following the news of the Memorandum of Understanding (MOU) a few months ago, energy prices fell back to almost pre-war levels and inflation readings, such as core CPI, were revealing a modest disinflation trend. Well, we all know what has recently occurred on the energy front with crude oil back above the $100 per barrel threshold while the recent readings for both CPI and PPI revealed that the moderation in price pressures stopped. That brings us to the Fed’s preferred inflation gauge, the core PCE deflator. Unlike core CPI, this measure had actually not revealed any disinflationary tendencies during the summer. Indeed, the year-over-year reading has consistently stood at +3.0%, or above, as of this writing. This figure is a full percentage point above the Fed’s target.

        Fed Policy: Finally, 'Walkin'' the Walk
        The Federal Open Market Committee (FOMC) decided to raise rates by a quarter-point, bringing the new fed funds trading range to 3.75%-4.00%. The money and bond markets had been pricing in a potential rate hike at this gathering, and Warsh & Co. ultimately realized that such a move was warranted. That being said, the ‘rate hike’ story does not end here. In fact, you can make the case that this is not over by any means whatsoever and the bond market will continue to challenge the Fed to stay the course, of course data permitting.

        Searching for GeoAlpha
        Over the course of the third quarter, the issues facing the market remained broadly the same as the second quarter. The U.S.-Iran conflict dragged on following the collapse of the Memorandum of Understanding. Though it evolved from kinetic to a predominately stalemate “wait-and-see” phase, the Strait of Hormuz issues and the involvement of the Houthis in Yemen continued to elevate energy prices globally. This was compounded by the continuation of the Ukraine War.

        MRM’s View
        The other risks are far more “headline and fade” risks and opportunities. The U.S.-Canada trade relationship can be solved rapidly if and when the two sides agree to a resolution. The U.S.-China trade relationship remains in a détente. Following the state visit by Xi to the U.S., the agreement to continue to talk was the primary takeaway. The midterms are the most “known of the known” risks with the outcome polled to oblivion with a substantial lead time.

        Source: WisdomTree

        MRM model holdings as of September 30, 2026

        Allocations

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        MRM Group, Inc. (“MRM”) is a state-registered investment advisor and an independent management firm that is not affiliated with any parent organization. Using quantitative selection methods, each MRM strategy searches within a well-defined universe of securities, using consistent investment criteria to identify attractive investments and create diversified portfolios. MRM seeks to provide long-term capital growth.

        Allocations

        The portfolios do NOT use inverse or leveraged ETFs. Universe vehicles may change, from time to time, when approved by the principal of MRM Asset Allocation Group at its sole discretion.

        BENCHMARK NOTES

        Effective January 1, 2026, the Dynamic Overlay benchmark was changed to the Vanguard Balanced Index Fund (VBIAX). This benchmark has been applied retroactively to the beginning of the performance period, January 1, 2008. We believe VBIAX provides a reasonable and transparent proxy for a diversified, balanced allocation strategy and serves as a consistent point of comparison, given the discontinued publication of the Morningstar Tactical Allocation Category, which was previously used as the Dynamic Overlay benchmark. The S&P 500 Index with dividends is an unmanaged composite of 500 large-capitalization companies whose data is obtained from the Standard & Poor’s website. S&P 500 is a registered trademark of McGraw-Hill, Inc. The Dow Jones US Select Dividend Index comprises 100 stocks and aims to represent the U.S.’s leading stocks by dividend yield. An investment cannot be made directly into an index.

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        MRM Group claims compliance with the Global Investment Performance Standards (GIPS®). MRM has been independently verified for the periods January 1, 2008 through March 31, 2026. The verification report is available upon request. Verification assesses whether (1) MRM has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) MRM’s policies and procedures are designed to calculate the present performance in compliance with the GIPS standards. Verification does not ensure the accuracy of any specific composite presentation.

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