Hi,

Welcome to the 4th edition of the Mulder Strategies newsletter. Every month I will highlight one specific macro topic that I believe is both important and actionable for investors in the current market environment. 

I want to thank you for being here and subscribing as I do not take it for granted!

As I mentioned in earlier reports, the market has now reached the mid-year target zone I laid out at the start of the year. We are sitting in an interesting range. I am actively watching for signs of a potential reversal that could mark a medium-term peak. I will be paying close attention to both price momentum and broader market sentiment to assess whether we are approaching a meaningful top. 

At the same time, there is still a realistic chance the current upward grind could extend a bit further. Some technical indications point to the possibility of additional upside before any sustained pause. The current momentum picture remains healthy. Most momentum indicators are elevated, which is normal this late in a move, but they are not yet showing negative divergences or clear signs of rolling over. While we are clearly in the later stages of this leg higher, I do not see a major long-term peak as the most probable outcome right now. 

The base case continues to favor constructive price action going into midyear consistent with the ongoing secular bull cycle. That said, I remain on watch for any shift in momentum that would warrant a more defensive stance. I will update you as soon as the technical or sentiment picture changes meaningfully. For now, the trend remains our friend, but as always, we stay alert and flexible.

When we zoom in on daily momentum, we are currently sitting in an active divergence zone. This setup is actually constructive. It suggests the index could pull back toward the 7063 level and still remain inside a healthy bullish impulse, even if we see a modest correction from current levels.

In a worst-case scenario, should geopolitical tensions escalate sharply, I could see the market testing the 6700 area. That level represents both a clear gap and a significant retracement zone where a base could eventually form. That said, I do not view this downside scenario as the most probable outcome right now. It would require a genuine market surprise.

My message would be, stay invested in profitable positions but maintain a defensive tilt. Keep some dry powder ready or take some profit if you haven’t and remain selective! The trend is still our friend for now but prudence and flexibility are essential heading into the second half of the year as this could be the annual peak area for equities. We do not have a solid signal so I tend to hold onto positions while we remain neutral.

President Trump completed his first visit to China since 2017 this week, leading a high-profile delegation that included Elon Musk of Tesla, Jensen Huang of NVIDIA, Tim Cook of Apple, and senior leadership from Boeing. The summit produced several immediate commercial outcomes. China committed to significantly higher purchases of U.S. soybeans, oil, and liquefied natural gas. Boeing secured firm orders for 200 jets, with the potential for additional deals to follow. 

Both sides also reaffirmed that the Strait of Hormuz must remain open and that Iran must not be allowed to develop nuclear weapons. Xi Jinping described the meetings as an effort to build “constructive, strategic, and stable” ties and to open a “wider door” for business cooperation. Trump, for his part, emphasized the strong personal rapport between the two leaders. This pragmatic tone marks a noticeable shift. Rather than focusing solely on confrontation, both governments appear to be using trade and investment as tools to reduce tensions and avoid broader conflict. U.S. companies are clearly positioning for greater access to the Chinese consumer market, while China is looking for more stable flows of energy and advanced technology.

For investors, the early signals are constructive. The agreements point to potential tailwinds for several U.S. sectors with meaningful China exposure aerospace (Boeing), agriculture (soybeans), energy (oil and LNG) and select technology and hardware names. Markets have already begun to price in the possibility with optimistic moves.

Relationships with China are improving and deals are being made. It's too early to make any calls about if this deal actually plays out but it's a great start for geopolitical tailwinds. Both Xi Jinping and Trump both want to keep Iran in check and the markets like that statement.

Proprietary ETF only portfolio (passive)

I launched this Passive Model Portfolio on January 1st, 2026. It is up over 8,5% as of May 2026.

I will not add any new capital to it. Instead, I’m running it as a transparent, real-world example of a well-balanced portfolio across sectors and regions. Starting capital: €10,000.

I will report any changes here so you can track performance over time. Because this is a passive portfolio, I plan to keep adjustments to a minimum and only make significant changes when I believe the secular (long-term) cycle is shifting.

Changes made since last issue:

None

Emerging markets have a long history of moving in distinct multi-year cycles relative to U.S. stocks. Since the late 1980s, we have seen two clear patterns: periods when EM stocks strongly outperform the S&P 500, and periods when U.S. equities dominate. These swings have typically moved in the opposite direction of dollar strength: a stronger USD tends to weigh on EM returns. 

Right now, the debate is sharply divided:

The bearish camp argues we are in a structural shift. U.S. tech dominance is seen as permanent, and global capital is likely to keep flowing toward American markets, making broad emerging-market exposure structurally unattractive for the foreseeable future.

The bullish camp, by contrast, sees a classic cyclical reversal taking shape. Investor sentiment toward EM is at extreme lows, valuations are historically cheap, and several potential catalysts are lining up: fresh stimulus from China, the start of a Federal Reserve rate-cutting cycle, and extreme concentration of global capital in U.S. markets, a setup that echoes the year 2001.

My positioning and opinion.

I believe U.S. stocks are overpriced. Valuations sit at historically elevated levels, and the kind of extended trend we are seeing now often carries a certain audacity, the sense that it can continue forever. In my experience, that feeling tends to appear precisely when a move is getting long in the tooth. A key piece of the puzzle is the relationship between the U.S. Dollar and emerging markets. 

The two are inversely correlated: when the dollar strengthens, it typically weighs on EM returns, and when the dollar weakens, emerging markets tend to benefit. That dynamic is playing out clearly right now.Given the current valuations in the United States, I see forward returns for U.S. equities as limited and in many cases, unattractive over the next several years. 

At the same time, we are witnessing a secular shift in global economic power. China continues to rise while the relative dominance of the United States gradually moderates. Because of this combination, I view meaningful exposure to foreign and emerging markets as essential rather than optional. That is exactly why I allocate a significant portion of my proprietary passive portfolio to international developed and emerging-market equities. 

It is not a short-term tactical call; it is a structural positioning designed to capture the next leg of the global cycle. Looking ahead, the dollar appears primed to weaken. The U.S. fiscal deficit remains a structural feature of the economic landscape and the longer-term path for the dollar points lower. A weaker dollar would act as a tailwind for foreign assets and help rebalance returns away from the extreme concentration we have seen in U.S. markets. In short, while U.S. stocks have delivered exceptional performance in recent years, the setup today favors a more balanced global approach. The combination of stretched domestic valuations and a secular pivot toward greater international opportunities makes foreign exposure an important part of staying diversified in the years ahead.

One additional factor that reinforces my view on relative U.S. equity performance is the S&P 500’s loss of ground against gold since its 2021 highs. In nominal terms the current rally looks impressive, but the picture changes dramatically when measured in real terms. Gold has risen sharply over the same period, which means the actual purchasing power delivered by U.S. stocks has been far more modest than headline price gains suggest.

Post-COVID, real inflation has hovered in the 4–5% range for an extended period. This steady erosion of purchasing power has made it much harder for the S&P 500 to generate attractive real returns, especially at today’s elevated valuations. These dynamics do not support the kind of sustained real gains investors have grown accustomed to in recent years. Instead, they point to the possibility of further relative weakness or even outright downside pressure for the index in the period ahead. 

This environment is particularly constructive for emerging markets. As capital seeks better real returns and chases relative performance, EM equities stand to benefit from the rotation. The combination of cheap valuations, improving global liquidity conditions, and this shift away from extreme U.S. concentration creates a favorable setup for foreign and emerging-market exposure. In short, when viewed through a real-return lens, the case for diversification beyond U.S. equities becomes even more compelling.

The message is clear: stay invested, but stay balanced and selective. The secular bull cycle is still intact, yet the environment favors a more measured approach than in previous years. Maintain exposure to high-quality U.S. names, but keep a meaningful allocation to international developed and emerging markets where valuations are far more attractive and the potential for catch-up performance is compelling.Keep some dry powder ready. The setup rewards patience and flexibility, especially if geopolitical or inflation surprises create the kind of short-term dips that have historically offered excellent entry points inside a bull market.