Weekly Hotline: March 13, 2026
Markets continued to fall this week as oil prices rose, and investors grew more concerned about sustained impacts from the war in the Middle East (see the Market Insight on Key Lessons from Past Military Conflicts from last week). The Model Fund Portfolio, however, remains well positioned for resilience through this period of uncertainty.
MACROECONOMIC UPDATE
- The National Federation of Independent Business (NFIB) Small Business Optimism Index ticked down from 99.3 to 98.8 as owners continue to grapple with high and rising costs.
- Existing Home Sales rose 1.7% in February as housing affordability improved slightly with lower mortgage rates. However, sales remain near their lowest rate on record and mortgage rates have already moved back upward in March which could unwind this temporary reprieve.
- Building Permits and Housing Starts came out for January in a delayed release. Permits fell -5.4% while Starts increased +7.2%. Both figures remain broadly in line with their levels over the past few years as the housing market remains relatively stagnant.
- The year-over-year rate of the Consumer Price Index (CPI) was unchanged in February with overall inflation staying at 2.4% and Core, which excludes the volatile food and energy components, remaining at 2.5%.
- In a delayed release for January, the Personal Consumption Expenditures (PCE) Price Index continues to highlight higher inflation with overall PCE rising 2.8% year-over-year while Core PCE, the Fed’s preferred inflation measure, increased from 3.0% year-over-year to 3.1%.
- Consumer Sentiment declined slightly from 56.6 to 55.5. However, Surveys conducted prior to the military action in Iran showed an improvement in consumer attitudes while more recent responses depicted a decline. Consumers are showing additional signs of weakness as expectations for personal finances fell -7.5%.
TECHNICAL UPDATE
- The InvesTech Housing [Bubble] Bellwether Barometer dropped to its lowest level since June of last year. If the Housing [Bubble] Bellwether Barometer continues to fall it would be an important sign of further weakness in housing, and this instability could spread to the economy and impact broader financial markets.
- Our Artificial Intelligence Index fell throughout the week and now sits -30% off its peak in November. A decline below recent lows would confirm that speculation is unwinding, and the broader market is at risk of further losses.
- Bearish Distribution appeared in the InvesTech Negative Leadership Composite. This is an important confirmation that the market is on unsteady footing and internal deterioration is occurring. An accelerated decline from here would confirm that further losses lie ahead.
INVESTECH MODEL FUND PORTFOLIO
There are no changes to the Model Fund Portfolio this week, which remains resilient year-to-date as our inverse index (bear fund) ETF and energy sector ETF continue to exhibit strength. The Portfolio is comprised of 58% long positions, 7% in an inverse index ETF, 5% in an intermediate Treasury ETF, and 30% cash held in short-term Treasurys or a money market fund. This results in 51% net equity exposure.
