The Stipelis NAV Report From the Trading Desk at Stipelis
Capital Markets experiencing crosswinds
Markets head into the weekend navigating a complex crosscurrent of geopolitical uncertainty, weakening consumer confidence, and diverging signals across asset classes. Peace talks between Washington and Iran continue, with Pakistan acting as an intermediary, providing a fragile backdrop of diplomatic hope even as energy markets remain sensitive to headline risk. At the same time, economic data and positioning trends suggest investors are becoming more defensive beneath the surface.
Equity markets are pressing higher. The NASDAQ and S&P 500 futures (NDQ and ES) are sitting at four‑week highs, reflecting continued appetite for risk and momentum‑based strategies. The resilience in equities comes even as U.S. consumer sentiment slumps to a record low and inflation expectations rise—an important divergence that historically has not persisted indefinitely. Markets are choosing to look past consumers for now, favoring liquidity, positioning, and trend persistence.
Agricultural markets are showing a similarly bifurcated picture. Soybean oil (ZL) futures are also at four‑week highs, benefitting from tight supply dynamics and continued energy‑adjacent demand, while other parts of the ag complex remain more mixed. This is a reminder that commodity markets rarely move in unison—dispersion is opportunity for systematic futures strategies that can adapt across sectors.
Energy markets carry a more cautious tone. Natural gas futures are at four‑week lows, pressured by weather forecasts and storage expectations, while crude oil is lower on the day but holding around the $94 level. That price behavior matters. Crude’s ability to hold structural support despite macro uncertainty and ongoing geopolitical discussions suggests that downside momentum is slowing, even if upside conviction remains limited for now.
In rates, the signal is becoming harder to ignore. The Stipelis Bond Market Index remains bearish, pointing toward renewed upward pressure on interest rates. Combined with rising inflation expectations, this reinforces the idea that markets may be underpricing duration risk. Bonds continue to struggle to regain leadership, and that has implications well beyond fixed income, particularly for equity valuations built on lower‑rate assumptions.
Adding another layer to the narrative, the Department of Justice has dropped its investigation into Federal Reserve Chair Jerome Powell. While not a direct market catalyst, it removes a lingering source of institutional uncertainty at a time when confidence in monetary policy is already strained. Even so, consumer perception tells a different story. The sharp decline in sentiment underscores how disconnected financial markets have become from the lived economic experience of households.
From a risk‑management perspective, the most important takeaway today may be what isn’t happening. Despite rising inflation expectations, geopolitical uncertainty, and pressure in rate‑sensitive assets, the stress indicators tracked by the Stipelis Trading Desk have not yet begun flashing red. Volatility remains contained, correlations have not spiked meaningfully, and liquidity conditions—while thinning—are still functional. That matters.
This combination creates a familiar late‑cycle environment: trends persist longer than fundamentals alone would suggest, while risk builds quietly beneath the surface. For managed futures strategies, this is precisely where discipline matters most. The objective is not to predict when conditions will change, but to remain systematically aligned with prevailing trends while remaining prepared for regime shifts when stress indicators confirm them.
Diversification continues to do the heavy lifting. Equity strength, rate pressure, mixed commodities, and selective energy weakness highlight why single‑asset portfolios struggle in environments like this. Managed futures, by design, are built to operate across these dynamics—long where momentum persists, defensive where trends break, and flexible as conditions evolve.
As we close the week, hope remains—but it is a measured hope. Markets are not yet signaling distress, but they are demanding vigilance. The Trading Desk will continue to monitor stress indicators closely, particularly in rates and energy, where early signals often emerge first. For now, patience, diversification, and adherence to process remain the edge.
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Stephen Coleman founder
Stipelis Global Trading LLC is registered with the Commodity Futures Trading Commission and is a member of the National Futures Association. Member ID 0474441
The opinions expressed are those of Stipelis Global Trading LLC and are considered market commentary. They are not intended to act as investment recommendations. Individuals should make investment decisions based on their own analysis and with direct consultation with a financial advisor.
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