Investment Newsletter: Stock Market & Investment Strategies
HELPING YOU NAVIGATE A TOUGH INVESTMENT ENVIRONMENT
DECISION MOOSE-- Global Investment Markets
Executive Summary-- AUG.28.2026
GLOBAL MARKETS: WEEK’S ACTION— MIXED-Risk (1)
THIS WEEK: 1st MIXED-Risk week after 1 Risk-OFF week.
US Stocks MIXED, Foreign Stocks MIXED, Bonds UP and Gold DOWN
FED MIXES THINGS UP
This week, hawkish Fed-speak out of Jackson Hole raised the odds of a rate hike at the 9/16 FOMC meeting and strengthened the Dollar (+1.0%) for the first week in five. Bonds rose 1.9% on the news, but commodities (-1.5%) including oil (-3.7%) and gold (-3.4%) lost ground. US stocks were mixed. Large caps (+0.5%) tolerated the idea of higher US rates, but small-caps (-1.4%) which are more sensitive to higher capital costs did not. Cash yield added 2 ticks to 3.73% and the ten-year fell to 4.72% flattening the yield curve to 99 bps. Offshore equities were also mixed with Europe (-0.8%) and Latin America (-0.1%) down and Japan (+0.7%) and Asia-Pacific (+0.5%) up. (Note: Asian markets had closed for the week by the time the Jackson Hole speech came out on Friday in the US.) Next week’s payroll report will provide more clarity as to the Fed’s next move. There were no changes to the models this week.
GLOBAL OUTLOOK NEUTRAL (2 of 4 and down this week). War has the Baltic Dry Index and oil down over the last quarter, while copper prices and bond yields are higher, leaving the outlook neutral.
INFLATION: PCE inflation a bit warmer in July and still above target. WTI oil prices fell almost 4% this week and are now back below $85 per barrel, and still down this quarter. Global inflation per the Fed Check (85) still warrants tightening. It improved assisted by rate hikes in Europe and Japan in June but has since begun to fade again.
US ECONOMIC DATA: July PCE Warmed, Personal Incomes Up, but Personal Spending Not So Much. Recession chances a year out shrinking and minimal. Money market system healthy per SOFR-T spread. GDP Now estimate (Q3) up to 4.6% as of 8/26.
FEDERAL RESERVE: This week, hawkish Fed-speak out of Jackson Hole raised the odds of a rate hike at the 9/16 FOMC meeting to 60% and strengthened the Dollar (+1.0%) for the first week in five. By December, at least one Fed rate HIKE (88%) and possibly two are likely. The Fed's balance sheet currently stands at $6.75 trillion, with the Fed Funds Rate at 3.50-3.75%. Fed Check (85) remains hawkish since 1/30/2026 (market price of hard assets going up faster than the market price of paper promises.
INVESTMENT STRATEGIES: There were no changes to the models this week pending next week’s jobs report.
THE GLOBAL INDEX MODEL-- SUMMARY 8/28/2026
INDEX MODEL: HOLD US Small-Caps (IWM)
The Global Index Model HOLDS US Small-caps (IWM) 7/13/2026.
US Small-caps (IWM) lead in overall 6-month Momentum (CI) among Global assets. but it lags in its very bullish technical strength and positive price momentum (PMO). Equities are still the best place to be, but there has been a 4-week rotation from US (dollar-based) assets into foreign assets and gold. The recent US-Japan joint foreign exchange intervention to smooth out “disorderly Yen movements” and this week’s Treasury action to double bond buy-backs both fostered the rotation by weakening the Dollar, but this week’s hawkish tone to FedSpeak at Jackson Hole reversed that. The Dollar jumped as a 9/16 Fed rate hike became more probable-- good for US assets, but not necessarily for small-cap US equities. Higher rates could make a switch out of small caps imminent unless next week’s August payroll report is another stinker.
Best Alternative: Emerging Markets (EEM), Developed Markets (EFA) and gold (GLD) are benefitting from US government currency interventions these days. It remains to be seen how permanent their impact may be.
Volatility Alert: IWM has an unfilled downside gap (249-259) from April 8 that it could revisit.
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. *stop-loss, **buy-stop, ***note
PERFORMANCE YTD 8/28/26:
INDEX MOOSE +24%
AOA (Aggressive Growth) +11%
AOM (Moderate Growth) +4%
SPY BENCHMARK +13%
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 in favor of US small caps.
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.