Jim Barrineau (@jwb12.bsky.social)

FCM Weekly Market Notes May Was a Blah Market, With an AI-Bubble Attached The divergence between tech and the rest of the market was even more extreme in May. If we account for a tech weighting of about 31% of the S&P, returns ex-tech were roughly 0.2% for the month. What makes it seem like more of a middling result is that we spent the latter part of the month rushing to price in an end to the Iran conflict. That has led to oil falling, with a raft of positive associated effects. One of these has been in the bond market: Coupled with the rally in bonds, the market has substantially lowered the odds of a rate hike. For the September meeting, odds of a hike declined by 15% over the past week, with 75% odds that the Fed would stay put. A Fed on hold means that market liquidity dodges the bullet of a significant tightening factor being fully priced in. How do we know this? Because high yield spreads to treasury bonds, which were threatening to breach their 30- day moving average going up, suddenly turned and now remain at very low historical levels. Lower hiking odds equals more willingness to take on credit risk. All of that represents an additional positive background for risk assets. But it seems hard to imagine how much farther those conditions can go. Having priced in most of the positive effects that would have been expected with a formal announcement of an end leaves the market vulnerable to either a further prolonged delay in talks. Otherwise, the dominant feature of the markets would remain the rise in inflation, as this week’s PCE numbers showed: Though rate hike odds have fallen, core inflation rising beyond 3% leaves little room for them to go further. It also suggests the bond market’s rally in response is likely to run into a wall shortly. Ten-year yields of 4.4% give investors a scant real return after inflation. At that level, bonds that rally should be sold instead of bought. James Barrineau, Chief Investment Officer Fiduciary Capital Management LLC 1621 Central Ave Cheyenne, WY 82001 Website: www.FiduciaryCM.com Direct: (914) 588-1978 https://calendly.com/jbarrineau-fiduciarycm/30min Fiduciary CM Firm Brochures https://fiduciarycm.com/wp-content/uploads/2026/03/James-Barrineau-ADV2b-3- 212026.pdf Fiduciary CM Form CRS (ADV3) Privacy Policy Email Disclaimer Advisory and Consulting Services offered through FIDUCIARY CM® (Fiduciary Capital Management LLC). FIDUCIARY CM® is an SEC Registered Investment Adviser. Information presented is for educational purposes only for a broad audience. The information does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and are not guaranteed. FIDUCIARY CM® has reasonable belief that this marketing does not include any false or material misleading statements or omissions of facts regarding services, investment, or client experience. Please refer to our Firm Brochure (ADV2) for material risks disclosures. The opinions referenced are as of the date of publication and are subject to change due to changes in the market or economic conditions and may not necessarily come to pass. FIDUCIARY CM® may discuss and display, charts, graphs, formulas, and stock picks which are not intended to be used by themselves to determine which securities to buy or sell, or when to buy or sell them. Consultation with a licensed financial professional is strongly suggested. Please remember that securities cannot be purchased, sold, or traded via e-mail or voice message system. For more information, please visit www.Fiduciary CM.com. http://dlvr.it/TSpQ0k