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#1 LATIN AMERICA Again Holds Short-Term Support:
ILF rose 0.6% this week, after losing 1.7% last week. That left it bullish and ranked 1 globally and more attractive than cash. The index is up 2.5% for the quarter (13 weeks), and up 54.5% for the year (52 weeks).
#2 GOLD Rebounds Off Prior Stop-Loss:
GLD rose 2.5% this week, after losing 2.3% last week. That left it neutral and ranked 2 globally and more attractive than cash. The index is down 4.4% for the quarter (13 weeks), but up 41.4% for the year (52 weeks).
#3 ASIA-PACIFIC Posts Another High:
AAXJ rose 6.7% 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 18.1% for the quarter (13 weeks), and up 60.4% for the year (52 weeks).
#4 JAPAN Gaps Toward Previous High:
EWJ rose 4.4% 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 5.4% for the quarter (13 weeks), and up 41.2% for the year (52 weeks).
#5 US SMALL-CAPS Post New High:
IWM rose 1.8% this week, after gaining 1.0% last week. That left it very bullish and ranked 5 globally and more attractive than cash. The index is up 9.3% for the quarter (13 weeks), and up 43.0% for the year (52 weeks).
#6 EUROPE’s Much Ado: IEV rose 1.0% this week, after gaining 0.1% last week. That left it bullish and ranked 6 globally and more attractive than cash. The index is up 0.2% for the quarter (13 weeks), and up 23.7% for the year (52 weeks).
#7 US LARGE-CAPS Post Another New High:
SPY rose 2.4% this week, after gaining 0.9% last week. That left it very bullish and ranked 7 globally and more attractive than cash. The index is up 7.8% for the quarter (13 weeks), and up 32.2% for the year (52 weeks).
#8 CASH and Interest Rates:
SGOV rose 0.1% this week, after gaining 0.1% last week. That left cash ranked 8 globally. The index is up 0.3% for the quarter (13 weeks), and up 3.4% for the year (52 weeks). The US ten-year yield dipped 2 bps to 4.36% and the three-month yield rose 2 ticks to 3.60%, steepening the yield curve to 76 bps.
#9 LONG US TREASURIES Get Death-Cross Bounce: EDV rose 0.7% this week, after losing 1.3% last week. That left it very bearish and ranked #9 globally and less attractive than cash. Long bonds are up 0.4% for the quarter (13 weeks) and up 1.7% for the year (52 weeks) as yields have risen.
COMMODITIES Fill The Gap:
A very bullish CRB fell 1.7% this week after gaining 3.2% last week. That left commodity prices up 24.0% for the quarter (13 weeks), and up 46.4% for the year (52 weeks).
Crude Oil Below $100:
Meanwhile, oil prices (USO) fell 6.4% this week, following last week's gain of 7.9%. Crude is currently very bullish. That leaves US oil prices up 68.0% for the quarter (13 weeks), and up 110.3% for the year (52 weeks).
US DOLLAR Weakens Further:
UUP fell 0.3% this week, after losing 0.3% last week. It is currently bullish—up 0.7% for the quarter (13 weeks), but down 0.6% in the last year (52 weeks).
SEE MOOSECALLS PDF FOR CHARTS AND DETAILS
ILF is #1 in confidence, but not ROC, TS, or PMO. ILF has begun to fade in the last 13 weeks as Asia-Pacific shows renewed signs of life. AAXJ is the best performing region YTD, and over 2, 13, 26, and 52 weeks. Emerging markets continue to outperform.
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 unchanged: positive; broad-- 70% of our sectors are buy or hold (L70%) with BUYS at 44% (L44%) and HOLDS steady at 26% (L26%). Avoids are 30%. Top candidates this week: Energy, Semiconductors, US Tech.
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 REMAIN POSITIVE FOR THE GLOBAL ECONOMY (4 OF 4)
An international shipping measure and proxy for current global trade, the Baltic Dry Index is at 3151 this week, up from last week and up 51% up after 13 weeks, a positive signal.
Meanwhile, another proxy for world activity, WTI oil price is up to $105.42 this week, and is up 68% in the latest quarter, a positive economic signal.
Our proxy for global construction, copper is at $6.30, down on the week but up 7% over 13 weeks and a positive.
Domestically, the 10Y US bond yield is up to 4.60% this week, and up 24 bps over the past 13 weeks, a positive bet on the largest world economy.
US ECONOMY: DATA
MAY 15.2026
CLAIMS UP. RETAIL SALES SOLID, INDUSTRIALS PICK UP
THIS WEEK: Mixed
THE GOOD: WEEKLY EIA Crude Oil Inventories (-4.31M) draw deepens as oil prices rise. MAY Empire State Manufacturing (+19.6) beat consensus and prior. APR Existing Home Sales (4.02M) beat previous, but below consensus. APR NFIB Small Business Optimism (95.9) beat previous, but below consensus. APR Industrial Production (+0.7%) beat prior and targets. APR Capacity Utilization (76.1) expanding better than anticipated.
THE BAD: WEEKLY Initial Claims: (211K) up from prior and consensus. WEEKLY Continuing Claims (1782K) up from prior. APR Retail Sales (+0.5%) in line, below previous. APR Treasury Budget ($215.0B) higher than previous and consensus. MAR Business Inventories (+0.9%) heavy build.
THE UGLY: Nothing.
US ECONOMY: INFLATION DATA
MAY.15.2026
CONSUMER, PRODUCER & EX-IM PRICES SURGE
APR CPI (+0.6%) in line less hot than previous. (+3.8% y-o-y)
APR Core CPI (+0.4%) warmer in line (+2.8% y-o-y)
APR PPI:(+1.4%) hotter than prior and consensus. (+6.0% y-o-y)
APR Core PPI (+1.0%) hotter than prior and consensus. (+5.2% y-o-y)
APR Import Prices (+1.9%) hotter than previous. (+4.2% y-o-y)
APR Export Prices (+3.3%) hotter than previous. (+8.8% y-o-y)
MAR PCE Prices (+0.7%) hotter than forecast and prior. (1yr 3.5% up.)
MAR PCE Prices – Core (+0.3%) warm but down from previous. (1yr 3.2% up.)
Q1 GDP-Adv. (+2.0%) below consensus, above prior.
Q1 Chain Deflator-Adv. (+3.6%) hotter than prior and target.
Q1 Employment Cost Index (0.9%) hotter than expected and previous.
Q1 Productivity – Prelim (+0.8%) weaker than prior and consensus
Q1 Unit Labor Costs – Warm but cooler (+2.3%) than previous and consensus.
Q4 Current Account Balance (-$190.7B) deficit an improvement over previous quarter and forecasts.
FED BALANCE SHEET ($6.72T); FFR @ (3.50-3.75%)
Currently, the Fed’s balance sheet is 6.72T, (up +.01T) in the latest week (5/13/2026). The Fed Funds Rate was lowered 25 BPS to 3.50-3.75% at the DEC10 FOMC meeting. No change at the January, March or April FOMC meeting.
The next FOMC meeting is June 17. Jerome Powell is Interim chair (as of May 15) until Kevin Warsh is sworn in as his replacement. Warsh is reputedly inclined to reduce the Fed balance sheet and be more hawkish. Meanwhile, futures make a 2026 rate cut highly unlikely (1%), while odds of a December Fed rate hike (51%) are now greater than 50-50.
The Fed Check at 77% turned hawkish as of 1/30/2026 (tighter monetary policy needed to combat global inflation pressures.) The US 2-Year yield at 4.08%, however, is now 46 bps HIGHER 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 steepened to a slope of 101 bps this week, as the 10-year US Treasury yield rose to 4.60%, and the 3-month cash yield dipped to 3.59%. Intermediate term, the curve was inverted from 11/22 through 12/24 but has been positive since. The 30d-10y median yield (4.10%) is just above its 200-day (3.96%). A rising median yield and a steepening yield curve are both bullish for stocks.
3-month SOFR yield at 3.56% is down this week, while the 3-month T-bill at 3.59% is also down. That puts the SOFR/T-Bill (SOF-T) spread at -3 basis points, below its 200-day average of 19 bps. A falling SOF-T spread signals a safer, more confident financial system.
FED OVERALL THIS WEEK: NEUTRAL (0) LW: NEUTRAL (0)
LATEST Rate Posture: (No Change) NEUTRAL (0)
LATEST Balance Sheet (down .01T) NEUTRAL, (0),
Fed Speak NEUTRAL (0),
Fed Check HAWKISH (-1)
US ECONOMY: RECESSION & GDP INDICATORS
NY FED: MINIMAL RECESSION THREAT DOWN SLIGHTLY
US recession chances one year out: 17.62% (APR 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 remains there. 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 4.0%
Atlanta Fed Current GDP Model (5/14/2026): Q2 Annualized 4.0% (Last week: Q2 Annualized +3.7%)
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