Weekly Commentary: Rapscallions Crowding Out

2026-05-09 12:45:54 ET

Folks in the future will undoubtedly find this period confounding. It's a fundamental Credit Bubble principle that things get crazy at the end of cycles. Super cycles ensure Super Crazy. And there's the theme for 2026 in play: "Expect the Unbelievable."

Maybe the war is ending soon. And, then again, maybe it's not. Either way, it is a reasonable assumption that normality returning to the Gulf will be a begrudgingly rocky process. December 2027 crude futures closed the week at $72.40, up 25% from the start of the year. While retreating 1.3% this week, the Goldman Sachs Commodity Index has gained 26.2% y-t-d.

The S&P 500 has now rallied 17% from March 30th lows, a relatively feeble rally compared to melt-up dynamics that have taken hold in key indices and markets. That Nasdaq 100 has surged almost 28% from March lows, while the MAG7 has jumped 27%. The Semiconductors' 66% melt-up rally places 2026 gains at a blistering 65%. While lagging tech, the small cap Russell 2000's 20% rally pushed y-t-d gains to 15.2%. The Goldman Sachs most short index rallied as much as 31%, with 2026 gains ending the week at 26.3%....

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