Weekly Hotline: May 1, 2026
The stock market continued to experience headline-driven volatility this week as FOMO (fear of missing out) pushed stocks higher even as InvesTech proprietary technical indicators, including the critical mega-cap Gorilla and speculative AI Indexes, fell behind.
MACROECONOMIC UPDATE
- Consumer Confidence ticked up +0.6 points in April to 92.8, relatively in line with its level over the last year. The Present Situation component fell -0.3 points while Future Expectations rose +1.2 points. Overall, consumers became more concerned about business conditions, but views regarding the labor market improved.
- The Institute for Supply Management (ISM) Manufacturing Purchasing Managers Index (PMI) was unchanged in April at 52.7% as the sector remained in expansion (>50%). However, the Prices component jumped to 84.6% –the highest level since April 2022– indicating rapidly rising price pressures, and the Employment component fell deeper into contraction (<50%).
- Housing Starts jumped +10.8% in March, rebounding to near the highest level in the past few years. However, Building Permits, which tend to be more of a leading indicator, collapsed -10.8%, nearing the lowest level since 2020. This will make next month’s readings an important indicator for the housing market.
- The Personal Consumption Expenditures (PCE) Price Index jumped in March as the Overall PCE Price Index rose from 2.8% to 3.5% year-over-year. Core PCE, which excludes the volatile food and energy components, also rose from 3.0% to 3.2%, moving even further above the Fed’s 2% target (see Market Insight).
TECHNICAL UPDATE
- The InvesTech Gorilla Index and AI Index are on track to close flat for the week despite the S&P 500 climbing higher. The relative weakness in these mega-cap giants and speculative favorites is an important sign that the market remains on unsteady footing. If these indicators fall below their recent lows, we believe the broader market will follow.
- The InvesTech Housing [Bubble] Bellwether Barometer fell throughout the week as sustained high mortgage rates took their toll on the housing market. A break in this critical indicator below its recent lows would confirm trouble ahead for the housing sector.
INVESTECH MODEL FUND PORTFOLIO
There are no changes to the Model Fund Portfolio this week, which is comprised of 58% long positions, 5% in an inverse index ETF, 5% in an intermediate Treasury ETF, and 32% cash held in short-term Treasurys or a money market fund. This results in 53% net equity exposure.
