Investment Newsletter: Stock Market & Investment Strategies
HELPING YOU NAVIGATE A TOUGH INVESTMENT ENVIRONMENT
DECISION MOOSE-- Global Investment Markets
Executive Summary-- JUL.31.2026
GLOBAL MARKETS: WEEK’S ACTION—Risk-ON (1)
THIS WEEK: 1st Risk-ON week after two Risk-OFF weeks.
US Stocks MIXED Foreign Stocks UP, Bonds DOWN and Gold DOWN
GLOBAL RISK BACK ON AS OIL RETREATS
A temporary pause in US-Iran fighting (and related hopes for de-escalation-by-diplomacy) pushed oil (-5.5%), commodity prices (-2.2%), and gold (-0.1%) lower, buttressing the broadly held notion that the Fed would not raise rates on Wednesday, which it did not. As a result, we saw bifurcated markets in which the first half of the week was met by reversal in the second half. Bonds rose initially but finished (-2.3%) lower. Equities did the opposite. US Large-caps (+1.1%) led small-caps (+0.0%) fractionally higher, while a weaker Dollar (-1.4%) added to offshore equities’ returns even more. Europe (+2.4%), Latin America (+2.1%), Japan (+1.3%) and Asia Pacific (+0.8%) all rallied as oil prices dipped below $85. Cash yield dropped to 3.68% but the ten-year spiked to 4.74% steepening the yield curve to 106 bps. There were no changes to the models this week. (Stop-loss in US small caps that could lead to changes in all three models has not been confirmed.)
GLOBAL OUTLOOK POSITIVE (3 of 4). (unchanged this week). War has the Baltic Dry Index, copper prices and bond yields higher over the last 13 weeks, all positives. Only oil is down for the quarter.
INFLATION: June PCE Inflation and core cooler, but still above 2% Fed target. Oil prices fell 5% this week and are now back below $85 per barrel, but they are still down this quarter. Global inflation per the Fed Check (86) still warrants tightening, but it has improved assisted by rate hikes in Europe and Japan.
US ECONOMIC DATA: Confidence, Income and Spending weak. Q2 GDP data worsens.Recession chances a year out minimal. Financial system health per SOFR-T spread: sound. GDP Now estimate (Q3) UP as of 7/29: 5.0%.
FEDERAL RESERVE: The Fed's balance sheet stands at $6.74 trillion, with the Fed Funds Rate at 3.50-3.75%. Next Fed meeting is in late September (9/29). Fed Chairman Kevin Warsh replaced Jerome Powell May 22. Iran war has spiked inflation fears. Fed Check (86) is improving but remains hawkish since 1/30/2026 (market price of hard assets going up faster than the market price of paper promises.) The odds are 67% that rates will be hiked at the next meeting in September. By December, however, a Fed rate HIKE (88%) is the most likely outcome.
INVESTMENT STRATEGIES: There were no changes to the models this week. Confirmation of a stop-loss in US small caps leading to changes in all three did not occur.
THE GLOBAL INDEX MODEL-- SUMMARY 7/31/2026
INDEX MODEL: HOLD US Small-Caps (IWM)
The Global Index Model HOLDS US Small-caps (IWM) 7/13/2026.
IWM leads in overall confidence among global assets. It also leads in positive PMO. Technical strength is very bullish.
NOTE: IWM also a triggered a stop-loss as yet unconfirmed— (PMO still positive, 50-day still rising, closing price above 50-day in 5 of last 7 days and above initial stop-loss seven of seven days.
The best regional alternative this week is IEV which gave a buy-stop 7/6 and is rallying with lower oil prices this week. That however may be temporary. The best Index alternative is US large caps (SPY) or Developed Markets (EFA).
Volatility Alert: It is likely IWM will fill its latest downside gap (249-259) and retest its 200-day before the US/Iran war is put to bed.
The Global Index Model continues to outperform the S&P, all Buy-and-Hold allocations, and the USES and TSP models in a major way.
PERFORMANCE YTD 7/31/26:
INDEX MOOSE +18%
AOA (Aggressive Growth) +8%
AOM (Moderate Growth) +3%
SPY BENCHMARK +9%
2026: Strong gold kept the Index model in bullion to start 2026, supported by the notion of at least one more Fed rate cut in 2026. That support evaporated at the March FOMC meeting when chairman Powell admitted the bank's uncertainty. Meanwhile offshore equities did well with US tariffs ginning their product prices higher, especially emerging (commodity based) economies. Rate increases in June in Europe and Japan dampened interest in offshore equities.
THE GLOBAL INDEX MODEL has been around for 34-years in one iteration or another. It is a momentum-based market timing model the latest version of which compares the relative strength of ETFs representing US stocks (SPY, IWM) and international stocks (EFA, EEM)) along with US Treasuries (SHY, EDV) and Gold (GLD) in order to pick the single best asset class in which to invest your money. Rankings provide the basis for the Moosecalls global financial newsletter, and have in the past been a solid predictive tool. They provide a general direction (stocks, bonds, precious metals, cash) for allocating investment assets. A daily signal, it is provided here for free once a week as a guideline only.