Look video of this post here.
Tomorrow (6/9) at 2pm ET, I’ll be joining YCharts for a Mid-Year Market Prospects.
We’ll take a data-based look at where the market currently stands, what’s changed over the past six months, and what investors should pay attention to as we head into the second half of 2026.
Topics will include:
- Why equity markets remain resilient
- Is this time different?
- Where does the Fed go next?
- The most important charts and signals today
Register HERE, open to all.
The most important charts and themes in markets and investing…
1) Welcome to the Mania Phase
Markets do not move linearly. Nor does investor psychology.
The rapid recovery from the correction lows in March (+19% over 9 weeks) was accompanied by a dramatic change in sentiment.
Back in March, there were widespread fears of a recession.
Today, investors are once again accepting risk.
The most aggressive segments of the market – high beta stocks, leveraged ETFs, meme stocks, and companies tied to AI narratives – have performed significantly better during the rally:
- The Technology Sector ETF ($XLK)’s recent 47% 9-week gain is its largest 9-week gain ever, surpassing its parabolic move higher in late 1999.
- Semiconductor stocks ($SOXX ETF) have more than doubled on the year, far outpacing the broad market ($SPY +11%).
- Money continues to flow into the Memory ETF ($DRAM) which became the fastest in history to reach $15 billion in AUM.
- The 3x Semiconductor ETF ($SOXL) is up 1,550% over the last year. That’s a 16x return.
- Meme stocks ($MEME ETF) and High Beta names ($SPHB ETF), which were in line with the market in late March, are now crushing the major indexes.
- On the other hand, the ratio of the defensive Consumer Staples ETF ($XLP) to the S&P 500 ETF ($SPY) has fallen to a record low, below the peak of the dot-com bubble in March 2000.
None of these signs mean that a big top is imminent. Bull markets can last a lot longer than most people think – and the mania phase can get even crazier from here.
But times of extreme optimism often coincide with high and unrealistic expectations. And the higher expectations rise, the more difficult they are to meet.
Investors should remember that enthusiasm and fundamentals are not always the same.
2) Revival of Developing Country Income
One of the biggest surprises in global markets this year was the dramatic increase in income expectations for developing countries.
After years of disappointing earnings growth (see 2015-2025), analysts have sharply increased their estimates for 2026, with earnings expectations for the MSCI Emerging Markets Index rising nearly 50% to a record high.
Much of the increase was driven by the technology sector, which is projected to account for more than 58% of all revenue growth in the index this year. Even more remarkable: three companies alone (Taiwan Semiconductor, Samsung Electronics, and SK Hynix) are expected to generate more than half of the total revenue growth for all emerging markets.
The surge in earnings expectations occurred at a time when emerging market valuations were historically still cheaper than developed markets. While U.S. stocks continue to trade at about 21 times earnings, well above their long-term average, emerging markets post earnings at just 11 times, below their decade-long earnings average and nearly half the valuation of U.S. markets.
The question investors must answer is whether the current pace of earnings growth is sustainable – or whether expectations have become too optimistic.
3) Crypto Winter
One of the most interesting developments in 2026 will be the difference between crypto and other risk assets.
Although the S&P 500 has now hit 24 all-time highs this year, Bitcoin experienced its longest (242 days) and deepest (-53%) decline since 2022.
After the presidential election in November 2024, Bitcoin went vertical with the narrative that the new administration would support crypto. All those profits have now been returned.
4) Golden Sleep
In January, Silver was up 64% on the year and Gold was up 25%.
Last week, both turned negative for the year.
Why the reversal?
A combination of mean reversion, a stronger dollar, and higher nominal/real interest rates.
Additionally, the Fed’s unnecessary and unwarranted easing has now ended with markets pricing in one rate hike by the end of 2026. This is a big change from the two rate cuts expected at the start of the year.
5) Chasing Hot IPOs
The average US IPO generates an annual gain of 6% in the 3 years following its listing.
That’s nearly half of the broader stock market’s gain.
Investors chase attractive IPOs in the belief that they will outperform.
But the reality is that most stocks perform poorly after going public.
IPO ETF ($IPO) is one illustration…
Another thing is what happened with Facebook shares after its IPO in May 2012…
6) Job Market Returns
There has been a dramatic turnaround in the US labor market with 92K jobs added per month over the last 6 months. That’s the strongest 6-month growth rate since February 2025 and a 180-degree reversal from conditions at the start of the year.
Where do new jobs come from?
60% of the increase in employment in the US over the last 3 months came from just two sectors:
1/ Health Care & Social Assistance: +198K jobs
2/ Leisure & Hospitality: +144k jobs
7) Some Interesting Statistics…
a) On a 5-year consecutive basis, US stocks have outperformed International stocks for more than 15 years. This is the longest US performance in history.
b) What are the cheapest tickets to watch Knicks vs. Spurs at MSG? Over $10k…
This is the view from that chair:
c) Miami, Florida is America’s strongest buyers’ market with home sellers outnumbering home buyers by 148%.
d) With $1 trillion, Elon Musk could buy all…
32 NFL Teams ($227 billion)
30 NBA Teams ($165 billion)
30 MLB Teams ($95 billion)
32 NHL Teams ($67 billion)
30 MLS Teams ($23 billion)
And it still has more than $400 billion left.
And that’s all for this week. Thanks for reading!
Every week I create a video detailing the most important charts and themes in markets and investing. Subscribe to our YouTube channel HERE for the latest content.
Disclaimer: All information provided is for educational purposes only and does not constitute investment, legal or tax advice, or an offer to buy or sell any security. Read our full disclosure here.
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