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#1 ASIA-PACIFIC Gaps Down From Latest High--
AAXJ fell 5.2% this week, after gaining 5.1% last week. That left it very bullish and ranked #1 globally and more attractive than cash. The index is up 21.4% for the quarter (13 weeks), and up 46.1% for the year (52 weeks).
#2 LATIN AMERICA Gives Ground--
ILF fell 0.3% this week, after losing 1.5% last week. That left it neutral and ranked #2 globally and more attractive than cash. The index is up 0.9% for the quarter (13 weeks), and up 40.6% for the year (52 weeks).
#3 JAPAN Gaps Lower—
EWJ fell 3.6% this week, after gaining 4.4% last week. That left it very bullish and ranked #3 globally and more attractive than cash. The index is up 12.1% for the quarter (13 weeks), and up 35.2% for the year (52 weeks).
#4 US SMALL-CAPS Edge Higher—
IWM rose 1.4% this week, after gaining 1.1% last week. That left it very bullish and ranked #4 globally and more attractive than cash. The index is up 20.9% for the quarter (13 weeks), and up 40.7% for the year (52 weeks).
#5 EUROPE’s Advance Slowing-- IEV fell 0.9% this week, after losing 0.2% last week. That left it very bullish and ranked #5 globally and more attractive than cash. The index is up 10.0% for the quarter (13 weeks), and up 18.9% for the year (52 weeks).
#6 US LARGE-CAPS Back Off MOU Bump--
SPY fell 2.4% this week, after gaining 0.9% last week. That left it very bullish and ranked #6 globally and more attractive than cash. The index is up 11.9% for the quarter (13 weeks), and up 19.9% for the year (52 weeks).
#7 GOLD Drops Into Oversold Bounce--
GLD fell 3.5% this week, after gaining 0.2% last week. That left it very bearish and ranked #7 globally and more attractive than cash. The index is down 7.5% for the quarter (13 weeks), but up 24.0% for the year (52 weeks).
#8 US Cash Yield Steady--
The three-month T-Bill yield is 3.66%, unchanged from last week. The cash yield is close to the Fed overnight rate (3.625%) following the 6/17 FOMC meeting at which no changes in rate policy were expected or made. Meanwhile, the two-year Treasury is yielding 4.18%, a 56 basis-point premium to cash
#9 LONG US TREASURIES Cool Their Jets--
EDV rose 0.7% this week, after gaining 2.1% last week. That left it bullish and ranked #9 globally and less attractive than cash. Long bonds are up 3.8% for the quarter (13 weeks) and up 4.7% for the year (52 weeks) as yields have risen.
COMMODITIES Continue Lower With Oil--
A neutral CRB fell 3.8% this week after losing 3.2% last week. That left commodity prices down 7.9% for the quarter (13 weeks), but up 21.7% for the year (52 weeks). Meanwhile, the broader oil complex (USO) fell 8.2% this week, following last week's loss of 8.4% and is currently neutral.
Fed US DOLLAR Rally Slows—
UUP rose 0.6% this week, after gaining 1.3% last week. It is currently very bullish—up 3.3% for the quarter (13 weeks), and up 5.1% in the last year (52 weeks). At $28.46, UUP is above its short-term (50-day) average and above its intermediate-term (200-day) average.
SEE MOOSECALLS PDF FOR CHARTS AND DETAILS
THIS WEEK the first Risk-ON week after 3 Risk-OFF:
US Stocks MIXED, Foreign Stocks DOWN, Bonds UP and Gold DOWN.
Asia-Pacific ex-Japan leads in regional global momentum since 6/3/2026, despite a 5%+ loss this week.
AAXJ leads in overall confidence and PMO. Technical strength is very bullish. Though AAXJ is the #1 regional choice, it is very volatile. The best alternative at the moment remains emerging markets (EEM), though Asia Pacific ex-Japan 5%+ this week and last.
AAXJ is the best performing region YTD, and over 13, 26, 39 and 52 weeks. It took a major hit this week but has previously recovered from a couple of 5% hits in the last month. ILF continued to fade. In spite of the volatility however, emerging market equities continue to outperform those of developed markets due to June rate hikes in Europe and Japan.
Below we rank 27 major US equity sectors according to their momentum and technicals. We also identify what sectors are working now and have been for awhile. There is no specific sector model to time the group as the ETFs involved may be thinly traded, extremely volatile, and require daily monitoring to avoid disasters. The rankings are more useful for longer term swing trade investors.
This week’s US equity sector momentum is up; positive; broad-- 82% of our sectors are buy or hold (L74%) with BUYS at 41% (L33%) up and HOLDS flat at 41% (L41%). Avoids are down to 18% (L26%). Top performers in the past two weeks: Semiconductors, Bitcoin, and US Technology.
Below we show the top 10 US stock sectors by year-to-date return. We also identify what sectors are working in the last 2, 13, 26,, 39 and 52 weeks, and over 3 years. Ranking is based on momentum over about six months (26 weeks). It is necessary to monitor more recent returns to make sure a high momentum reading does not mask a sudden weakness in price.
Indications fell into neutral (2 of 4) for the global economy.
An international shipping measure and proxy for current global trade, the Baltic Dry Index is at 2574 this week, down from 2722 last week but up 24% after 13 weeks, a positive signal.(After opening 2026 at 1882, BDI is still well below its 2010 peak @4640.)
Meanwhile, another proxy for world activity, WTI oil price is down to $69.23 this week, and down (-31%) in the latest quarter, a negative economic signal. (Oil remains below its 2022 peak ($130), but well above the 2020 Covid low ($10).)
Our proxy for global construction, copper is $6.21, down this week, but up 13% this quarter, a positive signal.
Domestically, the 10Y US bond yield is down to 4.37% this week, a -7 basis point decline over the past 13 weeks, a negative bet on the largest world economy.
US ECONOMY: WEEK ENDING JUN.26.2026:
DATA: MIXED-TO-WEAK
PRODUCTION: GLOBAL ACTIVITY IMPROVES
(-) WEEKLY EIA Crude Oil Inventories (-6.09) draw lessens as oil prices fall.
MAY Industrial Production (+0.1%) lagged prior and targets.
MAY Capacity Utilization (76.2) improved by less than anticipated.
(+) MAY S&P Global U.S. Manufacturing PMI – (55.7) expanding, up from previous.
(+) MAY S&P Global U.S. Services PMI – (51.3) expanding, up from previous.
APR ISM Manufacturing Index (54.0) beat prior and consensus.
APR ISM Services Index (54.5) beat prior and consensus.
CONSTRUCTION: MAY HOUSING WEAKENS
MAY Housing Starts (1177K) below previous and well below expectations.
MAY Building Permits (1413K) below consensus and prior.
MAY Existing Home Sales (4.17M) beat previous and consensus.
(-) MAY New Home Sales (580K) down from prior more than expected.
APR Construction Spending (+0.4%) beat prior and consensus.
INFLATION: PCE PRICES RISING
MAY CPI (+0.5%) in line less hot than previous. (+4.2% y-o-y)
MAY Core CPI (+0.2%) cooler than previous (+2.9% y-o-y)
MAY PPI:(+1.1%) hot as prior and above consensus. (+6.5% y-o-y)
MAY Core PPI (+0.4%) hotter than prior and consensus. (+4.9% y-o-y)
MAY Import Prices (+1.9%) in line with previous. (+6.7% y-o-y)
MAY Export Prices (+1.3%) hotter from previous. (+11.2% y-o-y)
(-) MAY PCE Prices (+0.4%) as expected. (1yr 4.1% up.)
(-) MAY PCE Prices – Core (+0.3%) as expected. (1yr 3.4% up.)
JOBS: CLAIMS IN LINE
(+) Weekly initial Claims (216K) below previous and forecasts.
(-) Weekly Continuing Claims (1821K) slightly higher this week.
MAY ADP Private Payrolls (122K) up from previous more than expected.
MAY Nonfarm Payrolls (172K) current better than expected, prior revised much higher.
MAY Unemployment rate (+4.3%) low, unchanged.
MAY Average Hourly Earnings (+0.3%) in line.
MAY Average workweek (34.3) unchanged.
APR JOLTS Job openings (7.618) up from prior.
JOLTS Separations
CONSUMPTION: INCOME, SPENDING UP; SENTIMENT BETTER
MAY Retail Sales (+0.9%) beat consensus and previous.
MAY Consumer Confidence (93.1) less than prior, but better than expected.
(-) MAY Durable Orders (-4.5%) correcting after 8.5% surge in April..
(+) MAY Personal Income up strong (+0.7%), better than expected and prior.
(+) MAY Personal Spending (+0.7%) better than expected and prior.
(+) MAY Michigan Consumer Sentiment (49.5) still contracting but improving and better than anticipated.
MAY NFIB Small Business Optimism (95.3) strong but below prior (95.6).
(-) MAY Trade Deficit (-105.8B) greater than previous.
GDP & RECESSION INDICATORS: IMPROVE
(+) Q1 GDP - Third Estimate (+2.1%) up from previous and consensus.
(-) Q1 GDP Deflator - Third Estimate (+3.6 %) up a tick from previous and still hot.
Q1 Employment Cost Index (0.9%) hotter than expected and previous.
Q1 Productivity – (+0.3%) revised weaker than prior and consensus
Q1 Unit Labor Costs – Warm but revised cooler (+1.8%) than previous and consensus.
(-) Q1 Current Account Balance (-$226.8) deficit greater than previous quarter and consensus forecast.
US ECONOMY: FEDERAL RESERVE
NY FED: RECESSION THREAT: MINIMAL, FALLING
US recession chances one year out: 14.98% (MAY 2027) per NY Fed. (Recession expected if chance > 30%.) As of May 2025, the Fed model’s chance of recession fell below 30%, the threshold signaling a recession one year out. It has been going lower since. The risk of recession was the highest in 40 years in May 2024, but it was avoided amid three years of massive Federal deficit spending and historic data falsification at the Bureau of Labor Statistics.
ATLANTA FED: US Q2 GDP NOW at 2.5%
Atlanta Fed Current GDP Model (6/25/2026): Q2 Annualized 2.5% (Last week: Q2 Annualized +3.0%)
US ECONOMY: FEDERAL RESERVE
FED BALANCE SHEET ($6.74T); FFR @ (3.50-3.75%)
FEDERAL RESERVE
JUN.26.2026
Currently, the Fed’s balance sheet is 6.74T, (up +.00T) in the latest week (6/24/2026). The Fed Funds Rate was lowered 25 BPS to 3.50-3.75% at the DEC10 FOMC meeting. No change since at the January, March, April or June FOMC meetings.
The next FOMC meeting is July 29. Trump replaced Jerome Powell with Kevin Warsh in the chair on May 22 and he chaired his first FOMC meeting June 17. No near term rate hikes are expected, but a more hawkish tone suggests supply-side inflation pressures brought on by the war with Iran may eventually force rate hikes by year-end. The odds are 70% that rates will remain unchanged at the next meeting in July. Chances of no change in December however are down to 41%-- with a Fed rate HIKE (36%) more likely than a rate cut (23%).
The Fed Check at 88% turned hawkish as of 1/30/2026 (tighter monetary policy needed to combat global inflation pressures.) The US 2-Year yield at 4.10%, however, is now 48 bps HIGHER (and rising) than the Fed overnight rate (3.625%), implying near-term US domestic conditions make a Fed rate hike increasingly likely.
The 3m-10y yield curve flattened to a slope of 71 bps this week, as the 10-year US Treasury yield fell to 437%, and the 3-month cash yield held at 3.66%. Intermediate term, the curve was inverted from 11/22 through 12/24 but has been positive since. The 30d-10y median yield (4.02%) is just above its 200-day (3.94%). A rising median yield and a steepening yield curve are both bullish for stocks.
3-month SOFR yield at 3.64% is up this week, while the 3-month T-bill at 3.66% is steady. That puts the SOFR/T-Bill (SOF-T) spread at -2 basis points, below its 200-day average of 13 bps. A falling SOF-T spread signals a safer, more confident financial system.
FED OVERALL THIS WEEK: NEUTRAL
FED CHECK: TIGHTENING INDICATED
RATE POSTURE: STEADY
BALANCE SHEET: STEADY
FED SPEAK: AWAITING NEW CHAIR
Latest FOMC Assessment (2026.6.17)
The Federal Open Market Committee approved the following statement for release by a 12 – 0 vote:
The Committee decided to maintain the target range for the federal funds rate at 3-1/2 to 3-3/4 percent, in support of the Federal Reserve's dual mandate. The Committee reaffirmed its policy of maintaining ample reserves in the banking system. Economic activity is expanding at a solid pace despite elevated uncertainty that owes, in part, to the conflict in the Middle East. Productivity growth and capital investment are strong. Job gains have kept pace with the workforce, and the unemployment rate has changed little.Inflation remains elevated relative to the Committee's 2 percent goal, in part reflecting supply shocks that have driven price increases in certain sectors, including energy. The Committee will deliver price stability. (Next Meeting: 7/29/2026)
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