Andrew Hill Investment Advisors has released its third-quarter 2026 investor letter, reviewing a market pulled in competing directions. Rising oil prices, higher interest rates, and persistent inflation weighed on stocks and bonds, while resilient corporate earnings and continued investment in artificial intelligence supported the broader equity market.
The letter does not report an aggregate third-quarter return for client portfolios. For context, the S&P 500 gained 3.54% through September 22, while the Bloomberg U.S. Aggregate Bond Index declined 2.8%. Oil prices climbed sharply, and the Federal Reserve raised its benchmark rate to 3.75%–4.00%, which the letter describes as its first increase in more than three years.
Exposure to software, AI hardware, and selected strategic investments supported client account performance, although losses elsewhere and rising bond yields offset some gains. The letter highlights a pronounced divide between investment themes: an equal-weight basket of AI stocks returned an average of 13.0% during the quarter, compared with an 8.3% decline for a basket of traditional-economy stocks.
Looking ahead, the firm expects the AI investment cycle to continue but remains cautious about the broader stock market. Its concerns include higher rates, inflation, geopolitical tensions, constrained consumer spending, election uncertainty, and a potential slowdown in AI capital spending as additional computing capacity becomes available. Against that backdrop, Andrew Hill favors companies with solid earnings, higher cash balances, and a gradual increase in fixed-income exposure, noting that high-grade corporate bonds offer yields above 6%.
Eli Lilly and Company (NYSE:LLY) is a pharmaceutical company that researches, develops, manufactures, and markets prescription medicines worldwide. Its treatments address diabetes, obesity, cancer, immune disorders, and neurological conditions, with prominent products including Mounjaro and Zepbound. On October 29, 2026, its shares closed at $1,373.70, an increase of 6.63% from the previous session, with a market capitalization of approximately $1.22 trillion.
Here’s what Andrew Hill Investment Advisors has to say about Eli Lilly and Company (NYSE:LLY):
“Eli Lilly continues to benefit from strong demand for its diabetes and weight-loss therapies, which have transformed the company’s growth profile and generated substantial cash flow. Lilly is uniquely positioned to reinvest these proceeds into a powerful cycle of research, development, and strategic acquisitions that can fuel its next generation of medicines. This flywheel of commercial success funding future innovation has helped Lilly build one of the most promising pipelines in the pharmaceutical industry, with investments spanning oncology, neuroscience, immunology, and emerging mental health treatments. In our view, the company’s ability to convert today’s GLP-1 leadership into tomorrow’s medical breakthroughs makes it a compelling long-term investment.”
On October 29, 2026, Eli Lilly and Company (NYSE: LLY) reported third-quarter revenue of $24.4 billion, an increase of 39% year over year, driven primarily by Mounjaro and Zepbound. Reported earnings increased 16% to $7.22 per share, while adjusted earnings rose 7% to $7.48 per share. Management raised its full-year revenue outlook to $91 billion–$92 billion. The company noted that quarterly revenue included approximately $900 million in benefits, primarily from milestone payments and favorable rebate and discount adjustments.
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Disclosure: No material interests to disclose. This article was originally published on Global Market Bulletin.
