HOTLINE
Hotline Archive
May 22, 2026
This is John Bonnanzio with a Fidelity Monitor & Insight Hotline update for Friday evening, May 22.
On Tuesday May 26, we will make the following Model Portfolio trades:
In our Unique Opportunities portfolio, we will sell our entire position in Equity-Income [FEQIX]. With one-third of the proceeds from the sale, we will increase our stake in Mega-Cap Stock [FGRTX] to about 34%, up from the current 25%. With the remaining two-thirds, we will establish a new 16% position in OTC [FOCPX].
These trades restore a bias toward growth-leaning stocks that we think is more likely to outperform over the long run (during the first quarter we adopted a somewhat defensive value-leaning stance).
There are no other model portfolio trades advised.
Turning to this week’s financial markets, Wall Street’s mood remains upbeat heading into the unofficial start of summer (though market jitters on Monday and Tuesday weighed on weekly performance). Notably, the Dow Jones Industrial Average ended Friday in record territory while the S&P 500 scored its eighth consecutive week of gains.
While consumer sentiment continues to sink in the face of rising inflation, higher gas prices and considerable nervousness over the perceived threat of AI deployment in the workplace, Wall Street has been giddy over AI-related growth, and the promise that the SpaceX IPO is a harbinger of more good things to come for the U.S. economy. It was also helpful that geopolitical concerns seemed to ease with respect to Iran and the Strait of Hormuz.
For the week through Friday’s close, the Dow Industrials jumped 2.1% versus a more modest 0.9% for the S&P 500. The tech-rich Nasdaq Composite ended the five-day period up 0.5%. Small and mid-cap stocks faced the headwinds of higher interest rates and inflation, but their cheaper valuations relative to large-cap stocks (and their smaller dependence on exports) were tailwinds this week: the small-cap Russell 2000 jumped 2.7% and the Russell Midcap gained 2.1%.
Overseas markets were the usual mixed bag, with some developed economies enjoying bigger gains compared with their U.S. counterparts.
For example, while the Stoxx Europe 600 jumped 3.0%, London’s FTSE gained 2.7% and Japan’s Nikkei gained 3.1%. Emerging markets slumped in dollar terms (MSCI’s gauge lost 2.4%), with Brazil off 0.4% partly due to retreating oil prices. Elsewhere, China’s Shanghai Composite slipped 0.5%.
On that score, a barrel of West Texas Intermediate plunged 9.2% this week to $97.00 a barrel. About half of that decline occurred on Wednesday when President Trump said that peace negotiations with Iran were in their “final stages.” Still, oil prices remain up nearly 70% since the start of the year.
Treasury bond volatility remained elevated for several reasons including the record level of U.S. indebtedness, little political interest in addressing the matter, and inflation creeping higher. Reflecting this problem, mortgage interest rates moved up this week: the average rate on a 30-year mortgage came in at a nine-month high of 6.51%. The upward move occurred even as the yield on the 30-year Treasury Bond slipped 5 basis points to 5.07%, with the benchmark 10-year Note declining 3 basis points to 4.56%.
| Our model performance as of Friday's close is listed below: | ||
|---|---|---|
| Week | YTD | |
| S&P 500 | + 0.9% | + 9.7% |
| Barclays US Aggregate Bond | + 0.4% | - 0.3% |
| Income Model | + 0.4% | + 3.6% |
| G&I Model | + 0.9% | + 7.0% |
| Growth Model | + 0.8% | + 11.5% |
| Select System | + 1.6% | + 13.4% |
| Unique Opportunities Model | + 0.8% | + 10.4% |
Finally, U.S. financial markets will be closed on Monday, May 25 for Memorial Day, while our next regularly scheduled Hotline update is Friday evening May 29.
Fidelity Monitor & Insight's Hotline is updated on Friday evenings or whenever the Dow moves 1,000 points or more in either direction.