Weekly Hotline: September 18, 2026
Markets were volatile this week as the Federal Reserve hiked interest rates for the first time in more than 3 years and the 10-year Treasury yield surpassed 5% for the first time since 2007.
MACROECONOMIC UPDATE
- The National Association of Home Builders (NAHB) Builder Optimism Index dropped from 35 to 32 in September as sales expectations plummeted. The market continued to struggle as 38% of builders cut prices an average of -6% and two-thirds of builders used sales incentives.
- The cracks also showed in the new construction housing report from the Census Bureau as Housing Starts fell -2.6% and Building Permits dropped -2.7%.
- Pending Home Sales remained near all-time lows as they ticked up 0.3% in August. The market remains muted as high mortgage rates continue to dissuade buyers.
- The Leading Economic Index (LEI) declined -0.1% in August as consumer expectations and building permits pulled the Index lower.
TECHNICAL UPDATE
- Bearish Distribution in the InvesTech Negative Leadership Composite (NLC) dropped to -80 as downside leadership increased rapidly. Now that Distribution has fallen through the critical threshold of -50, it is time to be on high alert. A fall through -100 would trigger a bear market warning.
INVESTECH MODEL FUND PORTFOLIO
There are no changes to the Model Fund Portfolio this week, which is comprised of 62.5% long positions, 5% in an inverse index ETF, 5% in an intermediate Treasury ETF, and 27.5% cash held in short-term Treasurys or a money market fund. This results in 57.5% net equity exposure.
