MooseCalls
Global Markets: Week's Action — MIXED Risk (1)
1st MIXED-Risk week after 1 Risk-OFF week. US Stocks MIXED, Foreign Stocks MIXED, Bonds UP and Gold UP
Long Rates Slip
The 30-year T-bond dipped to 5.60% and the 10-year to 5.24%. The cash yield rose to 4.06%, and the 3m-10y yield curve flattened to 119 bpts. Oversold, US long Treasury prices rose 1.1%, as expectations of at least one (and possibly two) additional 2026 Fed rate hikes waned ever so slightly. Lower US yields did not dampen the Dollar (+0.4%) but they did boost commodities (+1.3%), including oil (+0.6%) and gold (+1.2%). US large-caps (+1.2%) enjoyed the break in rising yields, but US small-caps (-0.9%) were not convinced. Offshore equities were mixed to down against the stronger Dollar. Only Latin America (+9.1%) was up, and that was an anomaly. Europe (-0.4%), Japan (-1.1%), and Asia Pacific (-2.3%) were all down. One change in the models this week.
Global Outlook
POSITIVE (4 of 4 and unchanged week)
The Baltic Dry Index, oil and copper prices and bond yields are all higher, making the outlook very positive.
Inflation
No data releases. WTI oil prices up a few cents to $92. Global inflation per the Fed Check (84) still warrants tightening despite the latest rate hike but seems to be cooling.
US Economic Data
Jobless Claims Low, Services Expansion Slows, Consumer Sentiment Weakens. Yield curve positive and steepening. Recession chances a year out shrinking and minimal. Money market system healthy per SOFR. Above average US growth prospects. GDP Now estimate (Q3) at 3.6% as of 10/09.
Federal Reserve
1st rate hike since 12/25 rate cut three weeks ago. Fed Check (84) remains hawkish. The Fed's balance sheet currently stands at $6.75 trillion, with the Fed Funds Rate at 3.75-4.00%. By December, at least one more Fed rate HIKE (81%) is likely and possibly two.
Investment Strategies
There is one model switch this week.
Regional Momentum Ranking: Asia Has the Lead
Assets are ranked by CI, the "confidence index". It combines the relative strength (rank), and technical strength (TS). The Trend is based on the TS reading.
| Rank | CI% | Fund | TS | Trend | RSI | PMO | Condition |
|---|---|---|---|---|---|---|---|
| 1 | 100% | Asia Pacific ex-Japan (AAXJ) | 71% | bullish | 46.1 | 0.46 | deteriorating |
| 2 | 89% | US Large-caps (SPY)** | 104% | very bullish | 60.5 | 0.58 | improving |
| 3 | 46% | US Small-caps (IWM)* | 27% | bearish | 38.8 | -1.38 | deteriorating |
| 4 | 45% | Japan (EWJ)** | 89% | very bullish | 52.1 | 0.85 | deteriorating |
| 5 | 20% | Short US Income (SGOV) | 82% | very bullish | 66.8 | 0.15 | deteriorating |
| 6 | -20% | Europe (IEV)* | 25% | bearish | 37.1 | -1.35 | deteriorating |
| 7 | -32% | Latin America (ILF)** | 102% | very bullish | 67.7 | 1.73 | improving |
| 8 | -125% | Very Long US Bonds (EDV)* | 2% | very bearish | 37.8 | -2.30 | deteriorating |
| 9 | -155% | Gold Bullion (GLD)* | 13% | very bearish | 45.8 | -1.13 | deteriorating |
Year-to-Date Regional Performance
| YTD | Fund | 10/09/26 | 10/02/26 | 13wk | 26wk | 39wk | 52wk | 3yr |
|---|---|---|---|---|---|---|---|---|
| 25% | Latin America (ILF) | 9.1% | 0.7% | 12.8% | 1.7% | 22.2% | 49.6% | 69.7% |
| 24% | Asia Pacific ex-Japan (AAXJ) | -2.3% | -0.2% | -0.6% | 9.3% | 19.4% | 33.8% | 52.6% |
| 21% | Japan (EWJ) | -1.1% | 1.0% | 4.6% | 10.1% | 18.8% | 36.4% | 55.5% |
| 14% | US Large-caps (SPY) | 1.2% | -0.2% | 3.8% | 11.5% | 13.8% | 20.5% | 40.3% |
| 13% | US Small-caps (IWM) | -0.9% | -0.2% | -5.9% | 3.8% | 8.7% | 18.5% | 31.8% |
| 3% | Europe (IEV) | -0.4% | -2.6% | -3.0% | -0.5% | 3.0% | 13.3% | 33.9% |
| 0% | Short US Income (SGOV) | 0.1% | 0.1% | 0.9% | 1.8% | 2.8% | 3.7% | 8.4% |
| -3% | Gold Bullion (GLD) | 1.2% | -3.4% | 1.7% | -12.6% | -6.5% | 4.2% | 56.7% |
| -15% | Very Long US Bonds (EDV) | 1.1% | -3.4% | -9.9% | -11.2% | -11.8% | -16.3% | -21.6% |
Weekly Regional Summary
THIS WEEK: 1st MIXED-Risk week after 1 Risk-OFF week. US Stocks MIXED, Foreign Stocks MIXED, Bonds UP and Gold UP
ASIA-PACIFIC — Slips Below 50-day
AAXJ fell 2.3% this week, after losing 0.2% last week. That left it bullish and ranked 1 globally and more attractive than cash. The index is down 0.6% for the quarter, but up 33.8% for the year.
US LARGE-CAPS — Inch Higher
SPY rose 1.2% this week, after losing 0.2% last week. That left it very bullish and ranked 2 globally and more attractive than cash. The index is up 3.8% for the quarter and up 20.5% for the year.
JAPAN — Triggers Buy-Stops, Backs Off
EWJ fell 1.1% this week, after gaining 1.0% last week. That left it very bullish and ranked 3 globally and more attractive than cash. The index is up 4.6% for the quarter and up 36.4% for the year.
US SMALL-CAPS — Still Testing 200-day
IWM fell 0.9% this week, after losing 0.2% last week. That left it bearish and ranked 4 globally and more attractive than cash. The index is down 5.9% for the quarter, but up 18.5% for the year.
CASH YIELD — Rises--
The 3-month yield rose 7 basis points to 4.06%. The 10-year dipped to 5.24% flattening the yield curve to 118 basis points. Cash is currently ranked #5 globally. The 3-month T-bill is up 0.95% for the quarter and up 3.74% for the year.
EUROPE — Continues to Break Down
IEV fell 0.4% this week, after losing 2.6% last week. That left it bearish and ranked 6 globally and less attractive than cash. The index is down 3.0% for the quarter, but up 13.3% for the year.
LATIN AMERICA — Gets Brazilian Bounce
ILF rose 9.1% this week, after gaining 0.7% last week. That left it very bullish and ranked 7 globally and less attractive than cash. The index is up 12.8% for the quarter and up 49.6% for the year.
US LONG T-BONDS — Bounce At Oversold Low
EDV rose 1.1% this week, after losing 3.4% last week. That left it very bearish and ranked #8 globally and less attractive than cash. Long bonds are down 9.9% for the quarter and down 16.3% for the year as yields have risen.
GOLD — Hits New Low, Bounces
GLD rose 1.2% this week, after losing 3.4% last week. That left it very bearish and ranked 9 globally and less attractive than cash. The index is up 1.7% for the quarter and up 4.2% for the year.
Commodities & Dollar
COMMODITIES Edge Upward
A very bullish CRB rose 1.3% this week, after losing 0.2% last week. Commodity prices are up 22.1% for the quarter and up 44.8% for the year.
Crude Oil Up Fractionally
The broader oil complex (USO) rose 0.6% this week, following last week's loss of 0.6%, and is currently very bullish. US oil prices are up 42.0% for the quarter and up 101.6% for the year.
US DOLLAR Posts New Overbought High
UUP rose 0.4% this week, after gaining 0.9% last week. It is currently very bullish, up 1.9% for the quarter and up 4.2% over the past year. At $29.02, UUP is above its short-term (50-day) average and its intermediate-term (200-day) average.