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#1 Latin America 40. ILF plunged 5.2% this week, after being unchanged last week. That left it neutral but still ranked 1 globally and more attractive than cash. The index is down 5.8% for the quarter (13 weeks), but up 39.6% for the year (52 weeks).
#2 Gold Bullion. GLD fell 5.0% this week, after gaining 0.8% last week. That left it bearish and ranked 2 globally and more attractive than cash. The index is down 16.0% for the quarter (13 weeks), but up 29.8% for the year (52 weeks).
#3 Asia-Pacific ex-Japan. AAXJ fell 5.9% 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 11.3% for the quarter (13 weeks), and up 44.8% for the year (52 weeks).
#4 Japanese Stocks. EWJ fell 2.4% this week, after gaining 1.5% last week. That left it very bullish and ranked 4 globally and more attractive than cash. The index is up 2.4% for the quarter (13 weeks), and up 35.2% for the year (52 weeks).
#5 US Small-Cap Stocks. IWM fell 3.0% this week, after gaining 1.9% last week. That left it very bullish and ranked 5 globally and more attractive than cash. The index is up 7.8% for the quarter (13 weeks), and up 34.3% for the year (52 weeks).
#6 European Large-Cap Stocks. IEV fell 2.1% this week, after gaining 0.5% last week. That left it very bullish and ranked 6 globally and more attractive than cash. The index is up 0.8% for the quarter (13 weeks), and up 16.7% for the year (52 weeks).
#7 US Large-Cap Stocks. SPY fell 2.5% this week, after gaining 1.5% last week. That left it very bullish and ranked 7 globally and more attractive than cash. The index is up 7.9% for the quarter (13 weeks), and up 24.5% for the year (52 weeks).
#8 Cash Yields and Interest Rates— Cash yield rose to 3.63% this week, 91 bpts below the 10-year yield (4.54%). The yield curve is steepening, a bullish development for equities and negative for bonds. Cash yield underperforms six-month total return estimates for most of the nine assets we track, leaving cash ranked #8.
#9 US Long Treasury Bonds. EDV fell 0.1% this week, after gaining 1.8% last week. That left it bearish and ranked 9 globally and less attractive than cash. Long bonds are down 4.9% for the quarter (13 weeks) and up 3.7% for the year (52 weeks) as yields have risen.
Commodities. A very bullish CRB fell 0.8% this week after losing 3.5% last week. That left commodity prices up 16.5% for the quarter (13 weeks), and up 36.7% for the year (52 weeks). At $29.23 the CRB is below its short-term (50-day) average and above its intermediate-term (200-day) average.
Crude Oil. The broader oil complex (USO) rose 3.0% this week, following last week's loss of 8.4% and currently very bullish. That leaves US oil prices up 62.3% for the quarter (13 weeks), and up 91.8% for the year (52 weeks). At $133.02, USO is below its short-term (50-day) average and above its intermediate-term (200-day) average.
US Dollar. UUP rose 1.3% this week, after losing 0.4% last week. It is currently very bullish—up 3.3% for the quarter (13 weeks), and up 2.6% in the last year (52 weeks). At $28.02, 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 a Risk-OFF week after 2 Risk-ON:
US Stocks DOWN, Foreign Stocks DOWN, Bonds DOWN and Gold DOWN.
Latin America still leads in regional global momentum since 4/9/2026, despite taking a 5%+ hit this week (6/5).
ILF leads in overall confidence, but not technical strength or PMO.
Though Latin equities (ILF) are the #1 regional choice, ILF is very volatile and triggered a stop loss (5/13). The best alternative at the moment remains emerging markets (EEM), though both Asia Pacific ex-Japan and Latin America took 5%+ hits this week, and next week’s tech performance could portend whether EEM recovers or continues lower.
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 37% (L44%) and HOLDS steady at 33% (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 2981 this week, down from last week but up 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 up to $90.54 this week, and up in the latest quarter, a positive economic signal. (Oil remains below its 2022 peak ($130), but well above the 2020 Covid low ($10).)
Our proxy for global construction, copper is 6.29, up this week, and up this quarter, a positive signal.
Domestically, the 10Y US bond yield is up to 4.54 this week, and up over the past 13 weeks, a positive bet on the largest world economy.
US ECONOMY: THIS WEEK’S DATA
JUN.05.2026: SOLID JOBS REPORT, CONSTRUCTION, SERVICES AND MANUFACTURING.
US ECONOMY: PRODUCTION DATA
WEEKLY EIA Crude Oil Inventories (-7.97) draw deepens as oil prices rise.
APR Industrial Production (+0.7%) beat prior and targets.
APR Capacity Utilization (76.1) expanding better than anticipated.
MAY S&P Global U.S. Manufacturing PMI – (55.1) down from previous.
MAY S&P Global U.S. Services PMI – (50.7) down 2 ticks from prior.
APR ISM Manufacturing Index (54.0) beat prior and consensus.
APR ISM Services Index (54.5) beat prior and consensus.
US ECONOMY: CONSTRUCTION DATA
APR Housing Starts (1465K) below previous but beat expectations
APR Building Permits (1442K) above consensus and prior.
APR Existing Home Sales (4.02M) beat previous, but below consensus.
APR New Home Sales (622K) down from prior.
APR Construction Spending (+0.4%) beat prior and consensus.
US ECONOMY: INFLATION DATA
APR CPI (+0.6%) in line less hot than previous. (+3.8% y-o-y)
APR Core CPI (+0.4%) warmer and 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)
APR PCE Prices (+0.4%) cooler than previous and expected. (1yr 3.5% up.)
APR PCE Prices – Core (+0.2%) cooler than previous and consensus. (1yr 3.2% up.)
US ECONOMY: JOBS DATA
Weekly initial Claims (225K) above prior and forecasts.
Weekly Continuing Claims (1777K) slightly lower.
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
US ECONOMY: CONSUMPTION DATA
APR Retail Sales (+0.5%) in line, below previous.
MAY Consumer Confidence (93.1) less than prior, but better than expected.
APR Durable Orders (+7.9%) way above previous and expectations.
APR Personal Income flat (0.0%), less than previous and expected.
APR Personal Spending (+0.5%) less than prior but better than expected.
MAY Michigan Consumer Sentiment (44.2) record low
US ECONOMY: GDP & RECESSION INDICATORS
Q1 GDP - Second Estimate (+1.6%) down from previous and consensus.
Q1 GDP Deflator - Second Estimate (+3.5%) cooler than previous but 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.
Q4 Current Account Balance (-$190.7B) deficit an improvement over previous quarter and forecasts.
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 3.0%
Atlanta Fed Current GDP Model (6/1/2026): Q2 Annualized 3.0% (Last week: Q2 Annualized +3.8%)
US ECONOMY: FEDERAL RESERVE
FED BALANCE SHEET ($6.71T); FFR @ (3.50-3.75%)
JUN.05.2026
Currently, the Fed’s balance sheet is 6.71T, (up +.01T) in the latest week (6/3/2026). 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. Trump replaced Jerome Powell with Kevin Warsh in the chair on May 22. The President hopes Warsh will be inclined to err on the side of economic growth, but futures consider that unlikely due to supply-side inflation pressures brought on by the war with Iran. A June rate cut is highly unlikely (5%), while odds of a December Fed rate hike (51%) or no change are about 50-50.
The Fed Check at 79% turned hawkish as of 1/30/2026 (tighter monetary policy needed to combat global inflation pressures.) The US 2-Year yield at 4.16%, however, is now 54 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 steepened to a slope of 92 bps this week, as the 10-year US Treasury yield rose to 4.54%, and the 3-month cash yield rose to 3.63%. Intermediate term, the curve was inverted from 11/22 through 12/24 but has been positive since. The 30d-10y median yield (4.08%) is just above its 200-day (3.95%). A rising median yield and a steepening yield curve are both bullish for stocks.
3-month SOFR yield at 3.62% is steady this week, while the 3-month T-bill at 3.63% is up. That puts the SOFR/T-Bill (SOF-T) spread at 1 basis point, below its 200-day average of 17 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 (2026.4.29) Recent indicators suggest that economic activity has been expanding at a solid pace. Job gains have remained low, on average, and the unemployment rate has been little changed in recent months. Inflation is elevated, in part reflecting the recent increase in global energy prices. The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. Developments in the Middle East are contributing to a high level of uncertainty about the economic outlook. The Committee is attentive to the risks to both sides of its dual mandate. In support of its goals, the Committee decided to maintain the target range for the federal funds rate at 3‑1/2 to 3‑3/4 percent. In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. (Next FOMC meeting: 2026.6.17)
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