Momentum
Our momentum barometer remains in neutral territory.
Featured news
1️⃣ Significant increase in the defense budget (Pentagon)
According to Tucker, the Pentagon raised its projected 2027 budget from $1 trillion to $1.5 trillion, an extraordinary jump in a very short time. This increase reflects a structurally more tense geopolitical environment and confirms that defense spending is no longer cyclical, but rather strategic and long-term. For the markets, this reinforces the idea of persistently higher public spending, large deficits, and structural pressure on long-term interest rates, as well as favoring sectors linked to defense, heavy industry, and energy.
2️⃣ Labor Market: Fewer Job Openings, But Lower Unemployment
Job openings (JOLTS) fell more than expected, a sign that employer demand is cooling. However, the unemployment rate dropped to 4.4%, which at first glance seems contradictory. The correct interpretation is that the labor market is adjusting gradually: fewer new job openings, but without a sharp decline in employment. This points to an orderly slowdown, not an immediate recession, and reinforces the late-cycle scenario we have been observing.
3️⃣ The corporate earnings season begins
January marks the start of earnings season, and this time it’s especially relevant. Banks often act as the first barometer of the economic cycle. If we observe pressure on margins, slower credit growth, or declines in profits, our model will interpret this as confirmation of a shift into a late-cycle phase.
Key data from last week
- ISM Manufacturing (Dec.) 🔴 47.9 vs 48.3 expected
The manufacturing sector continues to contract and the data was worse than expected, confirming persistent weakness in the industry. - ISM Services (Dec.) 🟢 54.4 vs 52.3 expected
The services sector clearly surprised on the upside, showing resilience of domestic growth and partially offsetting manufacturing weakness. - JOLTS – Job Vacancies (Nov.) 🔴 7.146M vs. 7.60M expected
A larger-than-expected drop in job vacancies. This signals a gradual cooling of the labor market, consistent with a late phase of the cycle.
Employment report (Non-Farm Payrolls, Dec.) 👉 Key data point of the week
- Job creation: 🔴 50K vs 60K expected
Job creation below expectations, confirming a slowdown. - Unemployment rate: 🟢 4.4% vs 4.5% expected
Slight improvement compared to expectations. - Preliminary Building Permits (Oct.) 🟡 1,412M vs 1,415M previous
Slight marginal drop compared to the previous month, but the level remains stable and high, with no clear sign of deterioration. - Michigan Consumer Confidence (Preliminary January) 🟢 54.0 vs. 53.5 expected
Moderate improvement in confidence, supported by more stable expectations and less perception of immediate deterioration.
Key facts from this week
Martes
• Inflation Rate (CPI, dic.): Previous 2.7% | Consensus 2.7%
• Core Inflation Rate (dic.): Previous 2.6% | Consensus 2.6%
Miércoles
• Retail Sales (nov.): Previous 0.0% | Consensus +0.4%
• PPI (nov.): Previous 2.7% | Consensus 2.7%
Jueves
• Jobless Claims: Previous 208K | Consensus 212K
Viernes
• Industrial Production (dic.): Previous +0.2% | Consensus +0.2%
#SP500 | 6’944 | +1.76% YTD (momentum: neutral)
The S&P 500 maintains a clear upward trend, trading above the 50-day and 200-day moving averages, confirming that the underlying structure remains positive. The slope of both moving averages continues to rise, with no signs of significant technical deterioration. The RSI (14) is around 61, in constructive territory, indicating positive but not extreme momentum, still far from overbought levels. After several weeks of sideways consolidation near highs, the index is once again pushing higher, suggesting a continuation of the trend within an expanding market, although with likely short-term tactical pauses rather than deep corrections.
Nasdaq100 | 25’763 | +2.05% YTD (momentum: neutral)
The Nasdaq-100 maintains a clear upward trend, trading above both the 50-day and 200-day moving averages, confirming that the structural bias remains positive. The 50-day moving average continues to rise and act as dynamic support following the corrections in November and December, while the 200-day moving average continues its steady upward climb, reinforcing the expanding market scenario. The RSI (approximately 58) is in neutral-positive territory, with no signs of overbought conditions, suggesting healthy momentum and room for further gains. Overall, the chart points to consolidation within an upward trend, rather than a market top.
Euro Stoxx 50 | 5’997 | +3.66% YTD (momentum: overbought)
The Euro Stoxx 50 maintains a solid upward trend, marking new highs and confirming a higher high-low pattern. Momentum is strong, and the price is clearly in breakout mode. The RSI (~74.7) is in overbought territory, indicating high momentum but not an immediate reversal signal; in strong markets, the RSI can remain overbought for some time. The most likely scenario in the short term is consolidation or minor technical corrections, rather than a trend reversal. As long as key support levels hold, the primary trend remains clearly bullish.
#BTC | $90’728 | +3.67% YTD (momentum: neutral)
IBIT (Bitcoin ETF) is currently in a corrective phase within a still-constructive primary trend. The price has broken below the 50-day moving average (SMA) and is trading below it, while approaching the 200-day SMA, which acts as key support. Furthermore, the 50-day SMA is below the 200-day SMA, confirming a corrective phase and suggesting that this process may be prolonged. As long as the price remains below the 50-day moving average, the short-term bias will remain weak, and the probability of the correction continuing is high. The RSI (≈49)
#Oro | $4’518 | +3.02% YTD (momentum: neutral)
Gold maintains a clear and well-defined upward trend. The price is trading well above the 50-day and 200-day moving averages, both of which have a positive slope, confirming structural strength and buyer control. After the strong rally in the second half of 2025, gold entered a phase of orderly consolidation, and has recently resumed its upward momentum with new highs.
The RSI (~64) is in positive but not extreme territory, indicating healthy momentum with no signs of severe overbought conditions. This suggests that the move still has room to extend without the need for an immediate deep correction.
Conclusion: Clearly bullish bias. As long as GLD remains above the 50-day moving average, the base case scenario remains trend continuation. Occasional corrections are normal and, for now, more likely represent consolidation opportunities within a bull market for gold.
Treasury fees
1 year: 3.52%
2 years: 3.54%
5 years: 3.75%
10 years: 4.18%
30 years: 4.82%
When interest rates fall, bond prices should fall and yields should rise, but we’re seeing the opposite. Why? Because investors are anticipating slower growth, lower inflation, and future rate cuts by the Fed. To protect themselves against a potential economic downturn, they’re buying Treasury bonds. By buying bonds today to hedge against that scenario, bond prices rise and yields fall.
In summary, the market is signaling that the economic cycle is entering a late phase and that the next relevant move will be towards lower rates and weaker growth, not towards renewed overheating.
US Treasury Yield Spreads
The yield curve has normalized: the 10Y–3M spread is approximately +0.56% and the 10Y–2Y spread is approximately +0.64%, clearly emerging from the previous inversion. Historically, this steepening does not mark the beginning of the cycle, but rather usually occurs in the later phase, when the market anticipates a slowdown and rate cuts. The message is consistent: after normalization, the risk of recession increases, and in many cases, the contraction arrives between 3 and 12 months later. Tactically, this favors duration and defensive positions against cyclical beta.
Investment Styles
En los primeros días del año se observa una clara rotación hacia estilos más defensivos y de calidad dentro de un mercado aún en expansión. Value (VTV) lidera el rendimiento (+3.05%), seguido de Quality (QUAL) y Momentum (MTUM), ambos por encima del S&P 500 (SPY). En contraste, Low Volatility (SPLV) queda rezagado, aunque ya en terreno positivo.
In the first few days of the year, a clear rotation towards more defensive and quality-focused styles is observed within a still-expanding market. Value (VTV) leads the performance (+3.05%), followed by Quality (QUAL) and Momentum (MTUM), both outperforming the S&P 500 (SPY). In contrast, Low Volatility (SPLV) lags behind, although it is already in positive territory.
Sectors
A clear rotation towards cyclical sectors is evident. Materials (XLB) leads strongly (+6.4%), followed by Industrials (XLI), Energy (XLE), and Consumer Discretionary (XLY), pointing to expectations of growth and recovery. Technology (QQQ) and Financials (XLF) are advancing more moderately, keeping pace but not leading the way. On the defensive side, Consumer Staples (XLP) and Healthcare (XLV) are lagging, while Utilities (XLU) is the only sector in negative territory, signaling less appetite for safe havens. Overall, the market favors cyclical risk over defensive stocks, consistent with a more constructive macroeconomic outlook in the short term.
Investment Clock
The market is beginning to show clear signs that the economic cycle is approaching its late-stage phase. Although official interest rates have started to fall, yields are no longer declining sharply, indicating that the market expects slower growth, not an immediate recession.
The leading styles are Value and Quality, reflecting a greater preference for solid companies and reasonable valuations. At the sector level, Materials, Industrials, and Energy are among the best performers, a typical pattern for a later stage of the cycle.
Now, the January earnings season will be key. If companies confirm a slowdown in growth and margins, the market will definitively validate the shift to the late phase of the economic cycle.
Sector valuation
Price/Earnings (P/E)
10–20× reasonable | 21–25× demanding | 26–30× expensive | >30× very expensive
1️⃣ Technology: ≈40.2× 🟥 (muy caro)
2️⃣ Real Estate: ≈34.0× 🟥 (muy caro)
3️⃣ Consumer Cyclical: ≈29.5× 🟥 (caro)
4️⃣ Industrials: ≈27.2× 🟨 (exigente)
5️⃣ Health Care: ≈26.8× 🟨 (exigente)
6️⃣ Basic Materials: ≈24.1× 🟨 (exigente)
7️⃣ Utilities: ≈22.9× 🟨 (exigente)
8️⃣ Consumer Defensive: ≈22.4× 🟨 (exigente)
9️⃣ Communication Services: ≈18.9× 🟩 (razonable)
🔟 Financials: ≈18.6× 🟩 (razonable)
1️⃣1️⃣ Energy: ≈18.1× 🟩 (razonable)
📌 S&P 500 (SPX): ≈28.0× 🟥 (caro)
Valuation of key markets
Current P/E ratio vs. historical average
1️⃣ Nikkei 225 (Japón): 25.2× vs 14.8× → 🟥 Sobrevaluado (+70%)
2️⃣ S&P 500 (EE. UU.): 28.1× vs 18.0× → 🟥 Sobrevaluado (+56%)
3️⃣ Nasdaq-100: 34.2× vs 24.8× → 🟥 Sobrevaluado (+38%)
4️⃣ Swiss Market Index (Suiza): 24.0× vs 17.7× → 🟥 Sobrevaluado (+36%)
5️⃣ Europa (Euro Stoxx): 24.7× vs 19.5× → 🟥 Sobrevaluado (+27%)
6️⃣ DAX (Alemania): 18.6× vs 15.3× → 🟥 Sobrevaluado (+22%)
7️⃣ CSI 300 (China): 14.6× vs 14.0× → 🟨 Online (+4%)
Top world stock markets
1️⃣ AEX (Netherlands): +2.40%
2️⃣ Nikkei 225 (Japan): +1.61%
3️⃣ Euro Stoxx 50 (Europe): +1.58%
4️⃣ CAC 40 (France): +1.44%
5️⃣ Tadawul All Share (Saudi Arabia): +1.30%
6️⃣ WIG20 (Poland): +1.30%
7️⃣ OMXS30 (Sweden): +1.25%
8️⃣ SZSE Component (China): +1.15%
9️⃣ Dow Jones Shanghai (China): +1.01%
10 BIST 100 (Turkey): +0.93%
1️⃣1️⃣ Shanghai Composite (China): +0.92%
1️⃣2️⃣ S&P/BMV IPC (Mexico): +0.83%
1️⃣3️⃣ Nasdaq Composite (USA): +0.81%
1️⃣4️⃣ FTSE 100 (UK): +0.80%
1️⃣5️⃣ Russell 2000 (USA): +0.78%
Top 15 S&P 500 Stocks YTD
1️⃣ SanDisk Corporation (SNDK): +58.99%
2️⃣ Lam Research (LRCX): +27.56%
3️⃣ Intel (INTC): +23.44%
4️⃣ Builders FirstSource (BLDR): +21.16%
5️⃣ Micron Technology (MU): +20.91%
6️⃣ Microchip Technology (MCHP): +18.05%
7️⃣ Schlumberger (SLB): +17.77%
8️⃣ Applied Materials (AMAT): +17.20%
9️⃣ Aptiv (APTV): +16.53%
🔟 Western Digital (WDC): +16.36%
1️⃣1️⃣ Moderna (MRNA): +16.31%
1️⃣2️⃣ Lennar (LEN): +16.00%
1️⃣3️⃣ United Rentals (URI): +16.00%
1️⃣4️⃣ Halliburton (HAL): +15.46%
1️⃣5️⃣ KLA Corporation (KLAC): +15.22%
Flop 15 S&P 500 stocks YTD
1️⃣ CoStar Group (CSGP): −13.01%
2️⃣ American International Group (AIG): −11.83%
3️⃣ Paramount Skydance Corp (PSKY): −10.00%
4️⃣ Las Vegas Sands (LVS): −9.43%
5️⃣ First Solar (FSLR): −8.64%
6️⃣ GoDaddy (GDDY): −8.49%
7️⃣ Expand Energy (EXE): −7.91%
8️⃣ Datadog (DDOG): −7.72%
9️⃣ Hewlett Packard Enterprise (HPE): −7.70%
🔟 ServiceNow (NOW): −7.44%
1️⃣1️⃣ Johnson Controls (JCI): −7.43%
1️⃣2️⃣ Autodesk (ADSK): −6.75%
1️⃣3️⃣ SBA Communications (SBAC): −6.32%
1️⃣4️⃣ NRG Energy (NRG): −6.26%
1️⃣5️⃣ Arista Networks (ANET): −6.21%
Featured tweets
🤖 AI Portfolio Update – Week 3 (2026)
Allocations – Week 3
(Δ vs. Week 2)
🔹 GLD (physical gold): 26% (↑ from 25%)
🔹 TLT (long-term U.S. Treasury bonds): 22% (↑ from 21%)
🔹 XLV (U.S. healthcare sector): 11% (↑ from 10%) ⚕️
🔹 VTC (U.S. investment-grade corporate bonds): 10% (=)
🔹 QQQ (Nasdaq-100): 8% (=) 🤖
🔹 SPY (S&P 500, U.S. large-cap equities): 7% (↓ from 8%)
🔹 ACWX (global equities ex-U.S.): 7% (↓ from 8%)
🔹 SMH (semiconductors): 4% (=) ⚡
🔹 SHV (short-term U.S. Treasuries / cash): 3% (↓ from 4%) 💵
🔹 IWO (U.S. small-cap growth): 2% (=)
Tactical Adjustments – Week 3 (2026)
1️⃣ Increase late-cycle hedges (GLD +1%, TLT +1%)
We continue to lean into assets that historically perform best as growth slows:
Yields are stabilizing after their recent rise
Real rates remain capped
Macro uncertainty is increasing, not decreasing
Gold and duration are now core strategic exposures, not tactical trades.
2️⃣ Strengthen defensive equity tilt (XLV +1%)
Healthcare continues to confirm leadership:
Relative strength vs. SPY
Earnings visibility remains high
Less sensitivity to slowing growth and higher financing costs
This is classic late-cycle sector rotation, not a recession call.
3️⃣ Reduce global and U.S. equity beta (SPY –1%, ACWX –1%)
Broad equity exposure is trimmed further because:
Valuations remain stretched
Market breadth is weak
Factor leadership favors Value and Quality, not broad indices
We prefer precision over exposure at this stage.
4️⃣ Maintain selective growth exposure (QQQ, SMH unchanged)
AI and semis remain long-term winners, but:
Valuations are full
Momentum is slowing
Earnings season is the next key catalyst
We stay invested, but we do not add risk here.
5️⃣ Gradually redeploy cash (SHV –1%)
Cash is being rotated into assets with:
Better convexity
Defensive characteristics
Positive carry
SHV remains a buffer, but no longer the primary shock absorber.
🌐 Macro Backdrop – Week 3 (2026)
Evidence is increasingly consistent with a transition toward late cycle:
Yield curve normalization driven by slower growth expectations
Rising dispersion across sectors and factors
Leadership from Value, Quality, Industrials, Materials, Energy
Growth still positive, but decelerating
Earnings season will be the confirmation point.
🎯 Strategy for Week 3 (2026)
Protect capital without exiting markets
Favor defense with optional upside
Avoid chasing returns
Let macro confirmation drive the next major move
We are positioned to survive volatility first, and to exploit it later.
Patience remains the highest-return asset.
