The ETF Portfolio Strategist: 15 FEB 2026

Trend Watch: Global Markets & Portfolio Strategy Benchmarks

Markets wobbled last week, but by Friday’s close it became clear that resilience won again for global asset allocation strategies. Two upbeat US economic reports — payrolls and inflation — helped with the heavy lifting and renewed the crowd’s confidence for expecting that the risk appetite will endure.

Before we dig into some of the details, let’s review the big-picture performances for our four ETF proxies that track various facets of risk exposure for global asset allocation. In line with recent history, our trend indicators continue to highlight an upside bias, marking an unbroken chain of green so far this year.

The bull run for global strategies is summarized via the Global Trend Indicator, which aggregates and analyzes all four ETFs listed above. GTI ended the week slightly below a new record high set on Wednesday, but the persistance and strength of the bull run remains pronounced.

GTI continues to climb, but its valuation has yet to rise to worrisome levels, based on our econometric Overbought-Oversold Indicator. Markets aren’t cheap, but this measure suggests GTI is still below previous peaks that raised warning flags for the near-term outlook.

When a clear warning sign returns for GTI, as it inevitably will, the initial red flag is likely to show up for the aggressive strategy (AOA) via our short-term trend risk signal. But with markets extending the rally for much of this year, warning flags remain out of sight and, for now, out of mind.

A closer look at world markets on a case-by-case basis highlights a perfect score of positive trends. We are up to our eyeballs in positive risk-sentiment readings. That may inspire some anxious investors to wade into a contrarian hedging posture, but the current climate suggests any defensive positioning should be measured until there the trend analytics reveal clear signs of deteriorating. On that point, the pickings are slim at the moment.

One of the chief concerns of late for monitoring market risk has been the gradual but persistent rise in Treasury yields. Our thesis has been that if the yields continued to increase, the trend would soon threaten to slow if not derail the bull run. But after last week’s upbeat news on payrolls and inflation, this concern looks substantially less worrisome.

The benchmark US 10-year yield had been trending higher over the past several months, but last week this rate fell sharply, breaking below its upward-sloping trendline of late. The slide voids the threat of higher yields, at least for the near term. There are other risk factors lurking, but for now the outlook looks somewhat less dangerous for the bull trend.

The main catalyst for the yield pivot: last week’s update on consumer inflation for January highlights a fresh whiff of disinflation. The consumer price index rose 2.4% last month vs. the year-ago level, the lowest since May 2025. Core CPI also edged down, dipping to 2.5%. Both measures are still above the Federal Reserve’s 2% target, but it’s fair to say that inflation worries, and the implications for Treasury yields, are still fading, if only on the margins.

Add in the substantially better-than-expected increase in hiring last month and the case for optimism looks firmer after last week’s releases. Granted, drilling down into the CPI and payrolls details dull some of the optismistic spin, but for now the macro skew turned upbeat.

How long this lasts is debatable. Suffice to say, there are lots of moving parts to the macro profile these days and the shelflife can be short for whatever assumptions look plausible on any given day. But ignoring what might happen, or not, the near-term US economic outlook is showing signs of improvement following a soft patch in late-2025. Smoothing the Dallas Fed’s Weekly Economic Index over a 10-period moving average reflects a firming trend that aligns with moderate year-over-year GDP growth that’s ticked up lately.

Markets have been pricing in a Goldilocks economy lately — not too hot, not too cold — and the latest payrolls and CPI data don’t offer an immediate reason to rewrite the script. A case for skepticsm is still robust, but until the trend analytics tell us to run for cover I remain an increasingly anxious bull. ■