Investment Newsletter: Stock Market & Investment Strategies
HELPING YOU NAVIGATE A TOUGH INVESTMENT ENVIRONMENT
DECISION MOOSE-- Global Investment Markets
Executive Summary-- AUG.07.2026
GLOBAL MARKETS: WEEK’S ACTION—Risk-ON (2)
THIS WEEK: 2nd Risk-ON week after two Risk-OFF weeks.
US Stocks UP Foreign Stocks MIXED, Bonds UP and Gold UP
GLOBAL RISK ON CONTINUES
Weaker than expected US payroll data, reinforced less hawkish messaging from the Fed, and improved risk appetite abroad due to lower oil prices and reduced demand for the greenback due to last week’s US-Japan joint foreign exchange intervention to smooth out a “disorderly Yen”. At the same time, the euro has strengthened after Eurozone inflation surprised to the upside, increasing expectations that the ECB may need to tighten monetary policy further. The latest pause in US-Iran fighting (and related hopes for de-escalation-by-diplomacy) cratered oil (-8.7%) and weighed on commodity (-1.8%) prices this week. Meanwhile, Gold (+7.2%) rallied on the weaker Dollar (-0.4%) anticipating possible rate cuts due to the currency intervention. US Long Bonds also rallied (+1.5%) alongside US equities with US small caps (+3.6%) leading large caps (+3.5%) higher. Offshore equities were mixed. Latin America (-2.3%), gave some back while Japan (+4.9%), Asia Pacific (+2.5%) and Europe (+2.0%) rallied as oil prices dipped below $80. Cash yield rose to 3.71% and the ten-year dipped to 4.66% flattening the yield curve to 95 bps. There were no changes to the models this week. (Stop-loss in US small caps never confirmed.)
GLOBAL OUTLOOK POSITIVE (3 of 4). (unchanged this week). War has the Baltic Dry Index, copper prices and bond yields higher over the last 13 weeks, all positives. Only oil is down for the quarter.
INFLATION: Q2 productivity weaker than expected and unit labor costs cooler than inflation rate, WTI oil prices fell 8.7% this week and are now back below $80 per barrel, still down this quarter. Global inflation per the Fed Check (87) still warrants tightening, but it has improved assisted by rate hikes in Europe and Japan.
US ECONOMIC DATA: Job Growth Contracted in July, Manufacturing & Services Still Expanding, Construction disappoints. Q2 Productivity weak and unit labor costs cool. Recession chances a year out shrinking and minimal. Financial system health per SOFR-T spread: sound. GDP Now estimate (Q3) UP as of 7/29: 5.8%.
FEDERAL RESERVE: The Fed's balance sheet stands at $6.75 trillion, with the Fed Funds Rate at 3.50-3.75%. Next Fed meeting is in late September (9/29). Iran war adds to inflation fears. Fed Check (87) is improving but remains hawkish since 1/30/2026 (market price of hard assets going up faster than the market price of paper promises.) After the weak jobs report, odds are now better than 50-50 (56%) that rates will be unchanged at the next Fed meeting in September. By December, however, a Fed rate HIKE (77%) is the most likely outcome.
INVESTMENT STRATEGIES: There were no changes to the models this week. Confirmation of a 20-day stop-loss in US small caps didn’t occur.
THE GLOBAL INDEX MODEL-- SUMMARY 8/07/2026
INDEX MODEL: HOLD US Small-Caps (IWM)
The Global Index Model HOLDS US Small-caps (IWM) 7/13/2026.
IWM leads in overall confidence among assets not on a buy-stop. It also leads in positive PMO. Technical strength is very bullish. IWM also a triggered a stop-loss that was reversed before it could be confirmed— (PMO still positive, 50-day still rising, closing price above 50-day in 5 of last 7 days and above initial stop-loss seven of seven days.)
The best regional alternative this week is IEV which gave a buy-stop 7/6 and is rallying with lower oil prices this week. That however may be temporary. The best Index alternative this week is Developed Markets (EFA) followed by US large caps (SPY).
Volatility Alert: It is likely IWM will fill its latest downside gap (249-259) and retest its 200-day before the US/Iran war is put to bed.
The Global Index Model continues to outperform the S&P, all Buy-and-Hold allocations, and the USES and TSP models in a major way. *stop-loss active **buy-stop active ***note
PERFORMANCE YTD 8/07/26:
INDEX MOOSE +22%
AOA (Aggressive Growth) +11%
AOM (Moderate Growth) +5%
SPY BENCHMARK +13%
2026: Strong gold kept the Index model in bullion to start 2026, supported by the notion of at least one more Fed rate cut in 2026. That support evaporated at the March FOMC meeting when chairman Powell admitted the bank's uncertainty. Meanwhile offshore equities did well with US tariffs ginning their product prices higher, especially emerging (commodity based) economies. Rate increases in June in Europe and Japan dampened interest in offshore equities.
THE GLOBAL INDEX MODEL has been around for 34-years in one iteration or another. It is a momentum-based market timing model the latest version of which compares the relative strength of ETFs representing US stocks (SPY, IWM) and international stocks (EFA, EEM)) along with US Treasuries (SHY, EDV) and Gold (GLD) in order to pick the single best asset class in which to invest your money. Rankings provide the basis for the Moosecalls global financial newsletter, and have in the past been a solid predictive tool. They provide a general direction (stocks, bonds, precious metals, cash) for allocating investment assets. A daily signal, it is provided here for free once a week as a guideline only.