USA & CANADA DAILY PULSE REPORT, JANUARY 2, 2026
INSTAT Signal: The Great Rotation is On – Dow & TSX Lead, NASDAQ Lags as Capital Flows to Quality and Commodities. However, the INSTAT scores are not as strong as Asia and Europe’s.
Executive Summary: North American Equities at Year-Start 2026 – A Rotation Toward Quality and Resources.
Key Takeaways:
Broad Sentiment: Neutral-to-Bullish with clear rotational dynamics. Leadership is concentrated in high-quality, cyclical large-cap stocks, particularly in the Dow Jones Industrials (Strongly Bullish) and S&P/TSX Composite (Strongly Bullish), while growth-heavy segments like the NASDAQ Composite (Neutral, negative bias) are consolidating.
U.S. Market (Group 2): Characterized by strong bifurcation. High-quality financials (e.g., JPM) and industrials (e.g., CAT) exhibit Strongly Bullish INSTAT profiles, favoring an overweight stance. Mega-cap tech (e.g., AAPL, AMZN) is in a corrective, neutral phase, warranting caution. Stock selection is paramount amid heightened dispersion.
Canadian Market (Group 3): Presents a stronger overall technical backdrop, led by resources and income. Energy, pipelines, and metals/uranium names (e.g., ENB.TO, NXE.TO, HBM.TO) show powerful Bullish to Strongly Bullish INSTAT signals. Defensive growth (e.g., L.TO) provides stability but not primary leadership.
Anomalies & Risk: Quantitative price anomalies are present but concentrated in high-beta themes (AI infrastructure, crypto, junior resources), signaling aggressive speculative flows rather than systemic errors. These areas require strict risk controls and limited allocation sizes.
Macro Alignment: The technical picture is broadly corroborated by the macroeconomic and policy context. Anticipated gradual Fed easing supports financials and cyclicals, while geopolitical and policy uncertainty underlines the need for technical discipline, especially in growth and tech allocations.
Core Recommendation: The environment favors overweighting exposure to quality large-cap cyclicals in the U.S. and resource/income leaders in Canada, while maintaining a more selective, risk-managed approach to growth and small-cap stocks. No broad defensive repositioning is indicated, but vigilance on macro data is warranted.
FULL REPORT:
PROCESSING NOTE:
Because I changed the prompts and the AI service, readers might notice that the quality of the INSTAT report has improved, and the number of instruments has increased.
Starting on Monday January 5, this report will be available exclusively at INSTAT.substat.com to paid subscribers. Earlier today, a second INSTAT report was done for Asian and European stocks trading on those exchanges.
On Sunday evening, I will move a copy of the email addresses of the paid subscribers to that Substack account, and also to another new Substack account for The Navigator Brief, so that you will automatically receive these publications for the duration of 2026.
Free subscribers who wish to upgrade to these two premium reports can do so this weekend at the $149.95 price. Starting on Monday, the INSTAT reports will include the full INSTAT data CSV for all instruments (almost 1,200) daily plus an audio report from the Gemini team that I believe explains the reports in simple language. The price will be $170.00/year ($17.00/month).
The price to new subscribers to The Navigator Brief Report, which also starts on Monday January 5, will be $150.00/year ($15.00/month).
So, if you are interested, this will be a good weekend to upgrade!
