CAPITAL SEASONS
Weekly Market Commentary
Week Ending 3 May 2026 | capitalseasons.co.za
Grounded in Dr Bart DiLiddo’s three forces: Earnings | Inflation | Interest Rates
| MARKET SEASON: SPRING | WEEKLY SIGNAL: MOSTLY CALM |
1. MARKET PULSE INDEX (MPI) | Week ending 3 May 2026
The MPI moved meaningfully higher this week, rising from 1.63 to 1.87 — a jump of +0.24 in a single week. This is the strongest reading since the tracker began in March. Two consecutive weeks of upward movement now confirm a directional trend. The market is in Spring, strengthening.
| VIX | Fear Score | Breadth Score | Momentum Score | MPI Score | Season |
| 16.99 | 1.6 | 2.0 | 2.0 | 1.87 | Spring |
What changed this week: Breadth surged to 2.0, with 90% of tracked sectors above their 50-day moving average. Momentum reached 2.0, reflecting an average 1-month return across sectors of +8.6%. The Fear component held at 1.6, with VIX closing at 16.99 — comfortably in the calm zone, below 18 but not euphoric.
| Date | Fear | Breadth | Momentum | MPI | Season |
| 25-Apr-2026 | 1.3 | 1.6 | 2.0 | 1.63 | Early Spring |
| 3-May-2026 | 1.6 | 2.0 | 2.0 | 1.87 | Spring |
Note on season change: Last week the MPI sat at 1.63, which sits at the boundary between Early Spring and Spring. This week at 1.87 it has crossed into Autumn Caution territory by MPI definition — but the season criteria tell a more precise story. SPY and QQQ are both above their 50-day SMAs, VIX is below 18, and broad participation is confirmed. The season is Spring. The elevated MPI is a signal to remain alert: good conditions can shift quickly, especially with oil above $100/bbl and the Strait of Hormuz still a live geopolitical variable.
2. SECTOR SENSEI | Rotation Report — Week ending 3 May 2026
Season Rotation Summary
Spring is being led by exactly the sectors you would expect: Semiconductors, AI infrastructure, and broad Technology. These are not narrow rallies. Infrastructure and Defence are confirming, Emerging Markets and Small Caps are participating. Breadth is high. The rotation is wide — that is a healthy Spring characteristic.
The notable exception is Gold Miners (GDX, GDXJ), which are under pressure in the short term, down over 9% in the past month. This is a corrective pullback within a powerful 6-month trend (+20.9%). Gold miners remain Winter-protected assets in the Portfolio Gardener — the momentum rule does not apply here. This pullback does not change the thesis.
Energy (oil and gas) is lagging on a 1-month basis despite oil prices above $100/bbl. The reason: supply-shock-driven oil prices are as much a headwind for the broader economy as they are a tailwind for energy stocks — investors are watching margin sustainability and geopolitical resolution, not just the oil price.
| Sector | ETF | 1M Perf | 6M Perf | vs 50D | Signal |
| Semiconductors / AI | FTXL | +41.8% | +71.2% | +29.8% | Leading |
| AI / Data Infrastructure | CHAT | +23.4% | +18.3% | +17.2% | Leading |
| Technology (Broad) | FTEC | +18.7% | +5.8% | +12.2% | Leading |
| Infrastructure / Defence | AIRR | +12.5% | +27.4% | +8.9% | Leading |
| Emerging Markets | EEM | +12.1% | +16.0% | +7.1% | Growing |
| Small Caps (Russell 2000) | IWM | +11.9% | +13.4% | +7.5% | Growing |
| Clean Energy | FAN | +8.5% | +32.9% | +8.7% | Growing |
| Real Estate | FREL | +8.0% | +7.6% | +3.3% | Growing |
| Commodities (Broad) | DBC | +7.4% | +34.7% | +9.1% | Growing |
| International (Developed) | EFA | +3.5% | +8.1% | +1.9% | Lagging |
| China | FXI | +3.5% | -7.3% | +0.9% | Lagging |
| Energy (Oil & Gas) | FENY | +1.5% | +34.5% | +4.1% | Lagging |
| Utilities | FUTY | +1.1% | +4.3% | +0.5% | Lagging |
| Gold Miners | GDX | -9.3% | +20.9% | -9.7% | Pullback |
Sector Sensei — Key Observations
- LEADING (Spring rotation): Semiconductors, AI infrastructure, Technology, Infrastructure/Defence. All above 50D SMA with strong 1M momentum. These are the Spring leaders.
- GROWING: Emerging Markets, Small Caps, Clean Energy, Real Estate, Broad Commodities. Participating in the rally but not at the pace of the leaders.
- LAGGING: International Developed, China, Energy (Oil & Gas), Utilities. Above 50D SMA in most cases but momentum is thin. Watch but do not chase.
- UNDER PRESSURE: Gold Miners (GDX/GDXJ). Short-term pullback only. 6M trend remains intact. Winter protection applies — do not act on 1M weakness alone.
- No sector is in confirmed deterioration. This is a broad, participation-driven Spring rally.
3. GLOBAL MARKET COMMENTARY
Grounded in Dr Bart DiLiddo’s Three Forces
GLOBAL CONTEXT OVERVIEW
Markets closed the week of 2 May 2026 on a constructive note. The S&P 500 (SPY) gained +10.0% in April — its best month since November 2020 — and added another +0.3% on Friday to close at an all-time high of 7,230. The Nasdaq Composite (QQQ equivalent) rose +0.9% on Friday, also closing at a record. The Dow Jones (DIA) gave back 152 points but remained well above its 50-day moving average. The broader Russell 2000 (IWM) held gains, up +11.9% on the month.
VIX closed at 16.99 — down from the anxiety levels of March (above 30) and still below 18, which is the threshold for confirmed Spring in the Capital Seasons framework. This is a healthy, calm reading. Not euphoric. Not fearful. It is the kind of quiet confidence that holds through uncertainty.
The big macro variable this week was oil. WTI crude settled around $101.94/bbl on Friday, trimming back from a mid-week high near $106 as US-Iran ceasefire negotiations briefly sparked optimism. Oil is up more than 40% year-to-date, driven almost entirely by the closure of the Strait of Hormuz since the conflict with Iran began in late February. This remains the primary inflation risk for 2026. Until the Strait reopens or a durable peace agreement is signed, elevated oil prices will continue to complicate the Fed’s job.
SOUTH AFRICA
The JSE (JSEJF) remains well above its 50-day and 200-day moving averages (+13.2% and +42.1% respectively), reflecting both rand weakness through the early part of the year and domestic corporate earnings resilience. The rand has strengthened 2.0% over the past month (ZAR: +0.0442 vs USD 6M basis), which is worth noting for SA investors with USD-denominated assets: rand strengthening reduces the rand value of those positions. A stronger rand is not automatically good news for US-portfolio holders.
SARB remains on hold. Domestic inflation is elevated, partly by global oil price transmission. The SARB will not cut until it sees sustained evidence of inflation moving toward its 4.5% midpoint target. SA investors should continue to treat currency movement as a two-directional variable, not an assumption.
UNITED STATES
The Fed held rates unchanged at 3.75% at its 29 April meeting — the third consecutive hold. This was Jerome Powell’s final FOMC meeting as Chair, with Kevin Warsh expected to succeed him. Two dissenters voted against the accompanying language signalling a possible future cut, reflecting genuine internal division about the path ahead. Bond markets agree: the 10-year Treasury yielded 4.35-4.39% by week-end, and traders are pricing no rate cuts in 2026.
The earnings picture is encouraging. Q1 S&P 500 earnings are tracking +14% year-over-year, up from 12% expectations at March end. Full-year 2026 earnings estimates now sit at +18.7% growth. Alphabet, Amazon, Meta and Microsoft all beat top and bottom line estimates. Apple added 3%+ after its Friday report. This is the earnings force at work — rising, broadly based, and supporting the Spring thesis.
Labour market data confirmed resilience. Jobless claims for the week ending 25 April fell sharply to 189,000 — the lowest reading since 1969 — against market expectations of 212,000. Continuing claims dropped to 1,785,000. The labour market is not cracking.
GLOBAL MARKETS
European markets were mixed. The FTSE 100 closed slightly lower on Friday after a strong Thursday session. Japan’s Nikkei climbed +0.38% on May Day trading. The Japanese yen was volatile, touching 160.72 before a sharp snap-back, reportedly on Bank of Japan intervention. Emerging markets (EEM) gained +12.1% in the past month — the best in years — supported by USD weakness and commodity price strength.
China (FXI) is lagging. Despite a small 1M gain of +3.5%, the 6-month return remains negative at -7.3%. Domestic stimulus has not translated into sustained equity momentum. The geopolitical backdrop — US sanctions pressure, weak property sector, declining autonomous vehicle licensing after Baidu incidents — remains a headwind.
Three Forces Summary
| Region | Earnings | Inflation | Interest Rates |
| South Africa | Stabilising | Elevated — easing slowly | On hold |
| United States | Improving — Q1 +14% YoY | Elevated (oil-driven) | On hold at 3.75% |
| Global | Mixed — West strong, East lagging | Upward pressure | Diverging |
4. MARKET WEATHER MAP
| MARKET SEASON: SPRING | WEEKLY SIGNAL: MOSTLY CALM |
| Month (Seasonal Anchor): May 2026 Weekly Update: Week ending 3 May 2026 | Season Status: Strengthening Posture: Alert — Spring conditions confirmed, oil risk active |
MARKET CLIMATE SNAPSHOT
SPY closed at $720.65, up +10.0% in April and sitting +5.9% above its 50-day SMA and +7.4% above its 200-day SMA. QQQ closed at $674.15, +10.0% above its 50-day SMA and +11.6% above its 200-day SMA. Both major indexes are comfortably in Spring territory. The Dow (DIA) and Russell 2000 (IWM) are also above their key moving averages, confirming broad index participation.
VIX at 16.99 is calm but not complacent. It is below the 18 threshold that marks Spring, but not yet below 15, which would signal Late Spring / Watch. The market is pricing in continued uncertainty — primarily oil and the Iran situation — but is not flinching at it.
Gold (GLD) is down -3.3% over the past month, sitting -4.7% below its 50-day SMA. This is typical: when equity markets are rising with confidence and the dollar is weakening, gold’s safe-haven premium compresses. GLD remains +8.1% above its 200-day SMA — the structural trend is intact. This is a short-term dip within a longer bullish cycle for gold.
The US Dollar (UUP) is -0.37% below its 50-day SMA and -0.47% below its 200-day SMA. Dollar weakness is supportive of international and emerging market assets — it explains part of EEM’s strong performance. High-grade credit (LQD) is slightly below its 50-day SMA, while high-yield (HYG) is flat, barely above its 50-day. Credit markets are not signalling stress.
WHAT THIS MEANS FOR INVESTORS
Focus on:
- Quality holdings already in portfolio — Spring rewards patience as much as action
- Existing positions in Technology, AI, Infrastructure and small-cap names — these are the season leaders
- Monitoring MPI trajectory: two consecutive weeks up confirms a trend — but above 1.8 is the Autumn Caution zone
Be cautious with:
- Adding new positions impulsively — Spring conditions warrant careful planting, not urgent buying
- Gold miner exposure reductions — a 1-month pullback does not break a 6-month trend
- Interpreting dollar weakness as a permanent shift — geopolitical resolution could reverse this quickly
Avoid (for now):
- Chasing Energy stocks on oil price alone — supply-shock oil is a complex variable, not a pure tailwind
- Ignoring oil risk in your macro view — $100/bbl oil is an inflation event, not just a commodity story
CAPITAL SEASONS GUIDANCE
Spring is here, and the data confirms it. But this Spring has an asterisk: oil above $100, a Strait of Hormuz that remains closed, and a Fed that is on hold with real internal division. The garden is growing. Tend it carefully. No position is more important than the discipline that got you here.
MARI’S OVERLAY
This is the kind of week that tests discipline in both directions. When everything is green and records are being set, it is easy to feel like you should be doing more. But the Portfolio Gardener system exists precisely for this moment: review what you have, water what deserves it, and resist the noise. The MPI at 1.87 is a yellow flag within a green week — not a reason to sell, but a reminder that Spring does not last forever. The fact that Gold Miners are pulling back while the rest of the market runs is actually healthy. It tells you this rally is not pure fear-driven gold-buying. It is equity-based confidence. That is what Spring looks like. I am watching the oil situation closely. Any durable ceasefire resolution would be a signal worth paying attention to for the next seasonal transition.
5. GUIDANCE FOR INVESTORS
Grounded in Dr Bart DiLiddo’s three forces — earnings, inflation, interest rates — the picture this week is a mixed but Spring-positive one.
- Earnings are rising broadly. Q1 US earnings +14% YoY, with upward revisions for the full year. This is the single most important force — and it is working in your favour.
- Inflation remains elevated, driven by oil. This is the primary risk to the Spring thesis. Energy-driven inflation is harder to resolve with interest rates than demand-driven inflation.
- Interest rates are on hold. The Fed will not cut in 2026 unless oil resolves and inflation falls. This is not a headwind for equities in the current environment — it is simply a neutral.
- No new positions until the MPI stabilises above 1.6 for two consecutive weeks (now confirmed). Spring planting may begin — slowly and selectively — for existing watchlist names.
- The Portfolio Gardener posture is Maintenance / Early Watch. No forced trades. Quality names are performing. Let them grow.
- Keep your eye on the geopolitical variable. Iran, the Strait of Hormuz, and Kevin Warsh’s first signal as incoming Fed Chair are the three things most likely to change the picture in the coming weeks.
WEBSITE WEATHER COMMENTARY
For use on capitalseasons.co.za
Spring conditions confirmed this week. Both the S&P 500 and Nasdaq closed at all-time highs, with the VIX at 16.99 — calm, not complacent. Sector breadth is wide, with 90% of tracked sectors above their 50-day moving averages. The Market Pulse Index rose to 1.87, its strongest reading since tracking began. Oil above $100 per barrel and ongoing US-Iran negotiations remain the key variables to watch. The garden is growing. Tend it with discipline.
Capital Seasons | Invest with the seasons. Not the noise.
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Disclaimer: Capital Seasons is an educational platform. This commentary does not constitute personal financial advice or a solicitation to buy or sell any security. Always consult a licensed financial advisor before making investment decisions.
This commentary is grounded in the investment principles outlined in Dr Bart DiLiddo’s book — specifically the three forces that drive all stock prices: earnings, inflation, and interest rates. The Capital Seasons framework builds on these principles in its own way.
A Spring Worth Trusting — With Eyes Open