Precipice of Positivity

Team Jefferies,

It is so easy to get pulled into the abyss.  We continue to be bombarded by large headlines: two major wars, $100+++ oil prices, AI displacing jobs and possibly opening the door to new cybersecurity issues, an upcoming U.S. midterm election, and violence as a daily reality in many parts of the world.  We are not denying or minimizing the seriousness of each of these issues.  The world always has its challenges and often when it rains, it pours.  The last few months have again felt like one of those times and the two of us are not immune from feeling more than slightly upside down during these times.  Here is how we turn our frowns upside down:

1. Priorities.  Family, friends, and health.  In the end, nothing else matters.
2. Perspective.  In the grand scheme of it all, we never lose track for a moment of how fortunate we are with the positive aspects of our lives.  We would not trade places with anyone else on this planet, and as we look around our firm, we know this emotion is fairly widespread among us.  Times like these are the ultimate reminders.
3. Purpose.  We all deserve meaning in our lives.  Jefferies has become the common link that both enables our ability to attain our purpose and is an important component of that purpose.  Providing for your family, creating value for your clients and stakeholders, helping to build a firm you are proud of, and being able to give back to the community and those in greater need are all fundamental to having purpose.  We are grateful that Jefferies allows us to check all these important boxes that together are critical components to establishing purpose.
4. Precedent.  It is hard to stay down for long when we have all been through so much together in the past, which in a number of cases felt much worse than the current environment.  If the sun comes out after a global financial crisis and after a pandemic, there is little doubt that we will see it shine again soon.
5. Persistent.  The Jefferies way is always about one day at a time, focusing on the task at hand, pounding away, and making progress.  We can’t get distracted or confused by noise and one of our secret sauces is consistency.  We know where we are going, and we know what we need to do to get there.  It is never easy or straightforward, but our path is clear.  This separates us from many in our industry and others.
6. Practical.  There are so many positives in the financial markets now that it is easy to miss the forest for the trees.  Businesses are generally healthy, growing, and, for the most part, thriving.  For every fear regarding technology, there are a multitude of positives, including efficiency, inflation reduction, and lifestyle improvement.  Unemployment is low.  Inflation, while potentially an issue, is today under control despite countless reasons not to be.  Interest rates are fine.  Default rates so far are modest.  Liquidity in the global financial system, the necessary lubrication for economic growth, is ample.  All capital markets are open and functioning fine.  M&A is healthy.  Stock indices are at or near all-time highs.  Medical innovation is occurring at a rapid pace (we should all be proud that Jefferies is a big factor in this).  In fact, if we just started the note with these facts, we would end it reminding everyone not to become complacent or arrogant given all these wonderful current realities!
7. Personal.  We are a month away from finishing our first half of this eventful 2026.  The fact is (and we are the first to admit it could change at any moment), all the factors we just mentioned are translating into real business opportunities for us and for our clients.  This time last year, we were buried in tariffs and global trade warfare.  This year, despite the global feeling of angst, we are delivering every day to the best of our abilities and our market position, and our ability to serve our clients well has never been stronger.  If the markets are allowing us to keep pounding through successfully despite all these challenging crosscurrents, one can only dream (and hope) to see what we can do together in the second half of this year if many of these storms subside and we have a modest wind at our backs.

Positively, Pensively, Purposely, and Proudly (because of all you) Yours,  

Rich and Brian