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MOOSPEAK
Notes: January 18, 2026
This week started off with Federal Reserve Chair Jerome Powell revealing that the Justice Department is threatening to indict him for ignoring its requests for information regarding cost over-runs on renovations to two Fed headquarters buildings. Powell cited it as a pretext to fire him. After President Trump warned Iran not to murder protesters or face the consequences, an international human rights organization reported that 2000 had already been killed. Mid-week, a female protester was shot by immigration police officers when she allegedly tried to run one over in Minneapolis on Wednesday.
Although President Donald Trump subsequently said he was not planning to fire Powell and signaled that he is holding off on intervening in Iran, he did express his continued interest in buying Greenland and announced the seizure of another Venezuelan tanker. That and (possible) Ukrainian drone attacks on Russian oil tankers in the Black Sea put the energy markets front and center in the news until the President back-tracked on Iran on Wednesday. Today’s Sunday talk shows are all about the Minneapolis protests.
With such exciting new developments dominating the headlines one really can’t feel bad about losing track of the markets, The distractions have been way more titillating than the dismal science (economics), which isn’t hard to imagine if one is completely honest. Couple that with the fact that most media is inclined to focus on making Trump look bad and ignoring stories that don’t and it’s no wonder the past 15 days in the US stock market have been largely ignored.
That said, 2026 is shaping up as something you won’t want to miss. Markets can go in the tank at any point, of course, so I hope you’ll continue to pay attention whether the Moose is around or not. While it is, the executive summary will bring you up to speed, and I will occasionally throw in my two cents— things about the market that stand out to me.
This week, for example, I added a table in Moosecalls identifying the top ten US equity sectors according to their year-to-date performance. It has been a feeding frenzy. Two things about the list stand out. The first is the size of the gains, the second the speed. Six of the ten sectors posted gains in excess of 11% in 16 days. All ten sectors returned more than 8% over the same period. Moreover, of the ten seven are overbought per RSI, meaning a dip (and potential buying opportunity) is to be expected.
There is a lot of money sloshing around out there. US large caps are lagging both US small caps and foreign equities at the moment. Equity indices are lagging metals (GLD>SPY), but mining shares (GDX>GLD) are outperforming their product. Among foreign equities, emerging markets are more attractive than developed nations’ equities and US large caps (EEM>EFA>SPY). The US has higher interest rates than many foreign nations, and though we expect then to come down in 2026, foreign rates are likely to come down as well—if not before US rates, in lockstep with them.
Despite a new US tariff system that essentially cheapens the Dollar and taxes the American consumer, the Dollar has been improving for over six months. That bodes well for US investments long term, all else being equal.
