US stocks tend to rally following Midterm elections: The S&P 500 has returned +17.2% on average in the year following Midterm elections since 1950, the strongest return of any year in the Presidential cycle. The index has finished higher in 17 of the 19 post-Midterm years during this period. This is also nearly quadruple the +4.6% average return recorded during midterm years, when the index finished higher in 11 of 19 years. By comparison, the S&P 500 has returned +8.1% on average in Year 4 of the Presidential cycle, or during Presidential election years, ending higher in 16 of 19 years. In Q4 of Midterm years, the S&P 500 has delivered an average return of +6.6% since 1950, the strongest quarterly return of the Presidential cycle. History suggests US equities will extend their rally after Midterm elections.

Investor appetite for leverage is through the roof: 10 largest US leveraged equity ETFs have attracted +$12 billion in inflows over the last month. This is despite the market cap of these funds falling -$20 billion over the same period. Recent inflow growth has been led by the 3x leveraged long Semiconductor ETF, $SOXL, which attracted +$9 billion over the last 2 weeks, its largest 2-week inflow on record. The 3x leveraged long Nasdaq 100 ETF, $TQQQ, posted +$1.3 billion in inflows, its 2nd-largest 2-week intake of 2026. Over the last 5 months, the 10 largest US leveraged equity ETFs have attracted +$19 billion in inflows. Investors are piling into leveraged ETFs at a record pace.

Brazil's 10Y Government Bond Yield is now pushing 16%! That's a +300 basis point gain in a single day. That would be like US mortgage rates going from 7% to 10% in a single day.