Daily Commentary
Commentary prepared by Alloya Investment Services, a division of the wholly owned CUSO of Alloya Corporate Federal Credit Union. Alloya Investment Services is a leading broker/dealer consultant to credit unions.
Friday, May 15, 2026 at 8:00 am CT
Commentary prepared by Tom Slefinger, Market Strategist
Market Indications
Other Market Indicators
| Market Indicators | ||
|---|---|---|
| 2s/5s Tsy Spread | 0.15 | +0.02 |
| 2s/10s Tsy Spread | 0.49 | +0.03 |
| 2s/30s Tsy Spread | 1.04 | +0.04 |
| DJIA-30 | 50,063.46 | +370.26 |
| S&P-500 | 7,501.24 | +56.99 |
| NASDAQ | 26,635.22 | +232.88 |
| Dollar Idx | 99.08 | +0.26 |
| CRB Idx | 400.28 | -4.11 |
| Gold | 4,558.46 | -90.20 |
Daily Commentary
Recap — The China-U.S. summit concluded. Despite many choreographed ceremonies and goodwill discourses, a lot of scarce jet fuel has been burned to produce nothing of real substance. China’s President Xi declared an agreement to keep trade ties “stable.” That’s it! Let’s face it; the two sides were unlikely to agree to anything different. (No one would announce “unstable” trade ties.)
The wee hours of the final trading day of the week point to dark clouds over government bond markets. The U.S. 30-year yield has reached 5.08%, a 17-year high!
The 10-year is above the 4.50% mark.
To finish with the bond market discussion: While inflation risks have risen at the margin compared with pre-war projections, and rate-hike probabilities are rising globally, the question the bond market must answer is how monetary policy can realistically address a supply-shock-driven inflation problem.
Also, as yields rise, I suggest a read of “Ferguson’s Law: Debt Service, Military Spending, and the Fiscal Limits of Power.”
It is not a news article but a research piece on the history of debt by Niall Ferguson of the Hoover Institution at Stanford University. The article identifies the “Ferguson limit,” or the point at which interest payments exceed defense spending, as the tipping point after which the forces of the debt burden tend to pull apart the geopolitical grip of a great power. I recommend it for a historical perspective on government debt and geopolitics. It is quite relevant for today’s issues.
Higher yields are weighing on stocks. S&P 500 futures are trading down about -0.8%, and Nasdaq futures are sliding by more than -1.0% in the early hours of Friday.
The DXY Dollar Index has regained a bid and is back above 99. Oil prices are rising at the same time. WTI is hovering around $103, and Brent is above $107 per barrel, while gold is slipping below $4,560 per ounce.
On the macro side, retail sales for April came in exactly as expected at +0.5% month over month, slower than last month’s gas shock, driven +1.6% month over month. What matters most for an accurate picture is the adjustment in real terms, and with the Consumer Price Index up +0.6%, real retail sales fell -0.2% month over month. This shows the weakness of the consumer sector and the narrowness of U.S. economic growth — a final send-off for Jerome Powell on his last day as Fed Chair.
Along with the retail sales release, we received the import price data, which showed a headline surge of +1.9% month over month in April (beating a consensus of a +1.0% increase), the fastest monthly pace in four years. The year-over-year trend mounted to +4.2% in April, from +2.3% in March, and +1.0% in February, the quickest since October 2022.
The more important number is the import price change (excluding petroleum), which also exceeded expectations, coming in at +0.7% (the consensus was +0.5%).
This morning, we will receive more data points on the U.S. manufacturing sector. The Empire Manufacturing Survey, industrial production and capacity utilization numbers will add more information on the state of industries facing high energy and material costs. Keep an eye on the numbers that could feed into industrial growth projections and profit-growth forecasts for manufacturing industries.
Stay tuned and have a great day!
Economic Calendar
May 11 - 15, 2026
Future Fed Expectations
Source: Bloomberg
| Select Probabilities based on the Futures | |
|---|---|
| Probability of Fed Funds rate CUT on June 17, 2026 | -5.0% |
| Probability of Fed Funds rate CUT on July 29, 2026 | -3.5% |
**All quoted rates are indications and are subject to change without notice.
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