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I'm currently holed up down on the Texas Gulf Coast. The weather’s gorgeous, seafood is abundant, and we are officially in the “my wife decides how long we stay” phase of this adventure, and we’re embracing the digital nomad life for now.

Frankly, I’m not exactly itching to house-hunt in North Carolina with the way things are going out there.

While we’re soaking up the sun, a few cracks are starting to show up in the economy—nothing catastrophic just yet, but worth watching. Interest rate jitters and housing price fatigue are stirring again, and meanwhile, I'm just following the golden rule: happy wife, happy life.

Now, onto the markets.

Tariffpalooza, Doge Speak, and Economic Confusion

It’s been another wild week. We’ve got tariffs. We’ve got Doge-level communication from the folks in charge. And we’ve got markets responding exactly as you’d expect when uncertainty piles up like this. At the time I’m recording this, the market is down almost 700 points. That’s a gut punch.

Liberation Day is right around the corner—set to usher in a wave of reciprocal tariffs. Autos, copper, and who knows what else. The smell of tariffs in the morning? Apparently, it makes the president giddy. But remember, these tariffs haven’t even kicked in yet, so don’t blame them for what we’re seeing in the data just yet.

Speaking of data, the Personal Consumption Expenditure Index, the Fed’s favorite inflation measure, came in hotter than expected. No, we’re not in full-blown 1970s mode, but this idea that inflation is quietly fading into the night?

 Nope.

It’s sticking around. And that same report? Consumer spending was lower than expected. People and businesses are sitting tight, unsure of what’s coming.

The National Federation of Independent Businesses—the trade association for small businesses—put out some sobering stats: uncertainty levels among business owners are at their highest ever.

Higher than 1975. Higher than during the Carter years.

 Higher than through the S&L crisis, dot-com bubble, the GFC, COVID—you name it. Small business owners don’t like uncertainty. They don’t hire, they don’t invest, and they sure as hell don’t expand when they can’t see what’s around the corner.

Consumers aren’t faring much better. They’re confused. They’ve never dealt with this scale of tariffs before. It’s been nearly a century—think Smoot-Hawley level stuff. And historically, that has never ended well.

Trade War’s Bell Curve: From Disaster to Renaissance

This whole mess sits on a bell curve of possible outcomes.

On the far left? Full-blown stagflation.

We’re talking sluggish growth and persistent inflation.

That’s not a guess. That’s baked in at this point.

The question is how bad it gets. Mild to moderate 1970s-lite? Or the full disco inferno with geopolitical instability, corporate paralysis, and pain across the board?

Worst case? The EU and Asia retaliate, immigration dries up, and all these government layoffs spill over into contractors, vendors, the hotels they stay in, and the grocery stores they shop at. Unemployment spirals, trade partners shut the door, and we wind up with stagflation plus a trade war.

Best case? Every multinational wakes up, relocates to the U.S. to dodge tariffs, and hires all those recently laid-off government workers. A made-in-America renaissance. Boomtown, USA.

What’s likely? Somewhere in the middle. Painful stagflation that eventually forces global and corporate capitulation, setting the stage for a major U.S. manufacturing revival and small-to-mid-cap boom. That’s a long game, but one with a solid payoff at the end.

AI: Slower Than Hoped, Still a Bonus for Nat Gas

Now let’s talk tech. A lot of market gains in the past year have ridden the AI hype train. And don’t get me wrong, AI is going to be massive. But… it’s not moving as fast as the market priced in. Productivity gains are coming, just not at warp speed.

Microsoft’s pulling back on data center buildouts—scrapping projects both here and in Europe. That throws a wrench into the bullish thesis for infrastructure, energy, and data demand.

There’s also the question of China. DeepSeek and other Chinese firms are making big AI claims. Are they real? I’m skeptical. But if they are, and if AI suddenly requires less infrastructure and less energy, then the entire AI-linked rally in certain sectors starts looking a bit overcooked.

But don’t worry about natural gas. AI or no AI, demand for nat gas is still going to surge. AI is the gravy on top of an already solid story. Stay long the nat gas names.

Technical Picture: Ugly, But Not Washed Out Yet

We are in no man’s land, technically speaking.

We're below the 200-day moving average on the S&P 500 and teetering on long-term trendline support on the weekly chart. The QQQs? Already broke trend. The Russell 2000? It's blown through every illusion of support like a wrecking ball.

Here’s the breath check:

• 63% of all stocks are below the 200-day moving average.

• 72% are below the 50-day.

That’s ugly. But true washout comes when 90% of stocks are below the 50-day. That’s when you tell the kids to get a second job, sell the dog, hold a yard sale, and scrape up every dollar to plow into the market.

Valuations still haven’t bottomed:

• S&P 500 still at 28x earnings

• CAPE ratio over 38

• Market cap to GDP? Still flirting with all-time highs

There’s still too much equity exposure across the board. Institutions, pensions, endowments, retail—everyone is still overweight stocks.

Now, credit spreads are picking up—but not quite at panic levels:

• High yield OAS is at 327 bps

• Off the 262 bps lows

• But still below Verdad’s “new normal” range of 400–600 bps

Once we’re in that 400–600 bps zone, it’ll be “everybody in the pool” time. That’s when you get the magic combo—high fundamental momentum and dirt-cheap valuations. It’s rare. But it’s coming.

In the midst of all this political and economic madness, we've seen the markets, well, the stock market anyway, selling off rather sharply over the last couple of days. As I'm recording this on Friday, March 28th, we're staring at a bloodbath on the screens. The S&P 500 is down a full 2%. The QQQ is getting crushed, down 2.67%.

And somehow, someone resurrected the corpse of the Russell 2000 just long enough to drag it out and shoot it again.

We’re back to the 5055-5079 level on the S&P 500. That’s well off where everyone thought we’d be by now. The biggest disappointment for many investors has been the expectation of Trump 1.0, the businessman-president coming back with a vengeance—pro-business, pro-market.

But that’s not what we got.

Instead, Donald Trump seems fully committed to reshaping global trade policy using tariffs as his primary weapon. That’s rattled the markets.

Tech stocks, naturally, are leading the move lower. They led the way up, so it only makes sense they lead the way down.

But there's a new wrinkle in the AI trade. So much of the tech rally was pinned to the massive capex spend for artificial intelligence infrastructure. But now we're seeing signs of pullback. Microsoft, for instance, is canceling data center contracts across Europe and the U.S.

That’s a flashing yellow light—everyone’s rethinking what level of investment AI truly justifies.

But here at the Real Income Report, we don’t spend our time sweating the S&P 500’s daily moves. We’re not index chasers. Our focus has been on REITs and fixed income—and I’ve got to say, they’ve been holding up extremely well.

The core REIT ETF is actually up on the week, which is quite something considering the broader market’s slide.

Our Big Five REITs? Off a touch today, but flat to up on the week.

That’s a strong showing.

These aren’t fly-by-night outfits. We're talking about a collection of super blue-chip real estate assets. The very best apartments. The very best shopping malls. The largest logistics and warehouse infrastructure provider in the country.

And, yes, one of the two best office REITs in America. You hold these, and you basically own a significant swath of the U.S. commercial real estate market.

And it’s yielding 5%.

Now, if you’re in the premium version of our product, you’ve got access to the deeply discounted core holdings REITs that yield over 6.16% with substantial long-term dividend growth potential. And they’re trading at fat discounts to net asset value. You can take it for a test drive right now for 14 days, completely free-of-charge - just click here!

Look, when you step back and take a long-term view of the stock market using tools like the CAPE ratio, the excess CAPE yield, the market cap to GDP ratio, and aggregate investor allocation to equities it’s all flashing one message: a lost decade could be ahead.

That doesn’t mean we crash tomorrow.

Could we melt up from here and then fall back?

Sure.

Could we just meander sideways for years?

Also possible.

Maybe even likely. But the odds are increasingly tilted toward a prolonged period of low or no returns from the broad market indexes.

This isn’t unprecedented.

Look at 1968. Nixon gets elected, optimism abounds, but then reality hits. It took 14 years, until 1982,for the market to break even. The Nifty Fifty? Those darlings lost 70-80% over the next several years. Same story in 2000.

Buy Microsoft at the highs?

You waited until 2017 to break even. Buy Cisco? Still waiting.

The academics will tell you to just buy the index.

Great.

But even the index didn’t break even for over a decade.

What worked in those lost decades?

Fixed income. Especially the stuff we love—BB-rated bonds and discounted debt from creditworthy companies. Huge margin of safety in the credit profile. That’s where you found real returns.

REITs have also delivered solid returns.

We’ve also got some specialized resources—like closed-end funds from Brookfield. They’re one of the biggest private equity and infrastructure investors on the planet. And their CEFs are trading at big discounts to NAV, with a 10.75% yield.

That fund’s backed by real assets—real estate, oil & gas infrastructure, global infrastructure projects.

That’s serious income with real backing.

So what you’ve got in our portfolio is this: a total return portfolio of deeply discounted REITs with excellent credit and long-term dividend growth throwing off 6% yields. Then a high-yield income portfolio made up of credit-secure preferreds, bonds, and funds throwing off 9%+. These are best-in-class income investments. Period.

Now here’s the kicker. A lot of you have been asking us about deep value strategies. And yes, we’ve had some conversations—on Substack and elsewhere. Some interest, but not quite enough to launch a new paid service. So here’s what we’re going to do.

We’re adding a little something to the Real Income Report. Occasionally, not part of the main portfolio, we’re going to send out bonus picks. These will be deeply discounted, special situation, non-bank takeover targets. When something lands on my desk that I think has triple-digit return potential, you’re going to hear about it. We’ve done this before—at Money Map Press, and again with the circus act at our last shop. And we’ll do it again right here.

These picks won’t throw off much income. They’re not for that. But if you’re in an aggressive stage of wealth building, they’re valuable. We’ll spin this off into its own service down the road if the interest grows.

For now, Real Income Report subscribers will get these picks at no extra cost.

If you want more on banks and financials—including bank takeover targets and real estate lenders—we’ve got a Substack for that: Off Wall Street Wanderings of a Curious Mind.

That’s where we’ll publish the bank special situations portfolio. We're keeping that separate to test platforms and gauge interest. But if that’s your wheelhouse, head there.

If you’re not a member yet, now’s the time. You get high-yield REITs with growth. You get preferreds and bonds with fat, safe yields. And you’re about to start receiving deep value special situations for big upside. All in one package. No added cost.

Let’s get to work.

Sign up for a 14-day free trial right here.

I’ll see you next week.