Independent Financial Research & Analysis
Daily briefings, 7,500+ real-time charts, and macro insights from Dr. Ed Yardeni and his research team.
Research
Latest Research
Recent insights from our research team
Fed Rate Hike Still On The Table
Neither the Fed’s dual mandate nor its official 2% inflation target have changed. But from what Kevin Warsh has said since assuming the role of Fed chief in May, his priority appears to be the inflation side of the dual mandate and his target may be underlying inflation rather the PCED inflation rate. Today, Ed and Elias look at the ramifications of such a potential shift in the Fed’s focus and discuss the best measure of underlying inflation. They also assess the latest economic data and explain why they think a rate hike this year is still likely. … Also: Dr Ed reviews “I Swear” (+ +).
US SECTORS: Rotations and Corrections
The S&P 500 is 2.0% below its June 2 all-time high. It has been hovering around 7,500 since May 14. Beneath that calm, momentum stocks have been hard hit. The semiconductor index (SOXX) is down 20.3% from its June 22 peak. The Roundhill Memory ETF (DRAM), which started trading on April 2 around $28 and soared 208% to $80.7 on June 22, is down 35% since then. These developments have all weighed on the S&P 500 Information Technology sector, which we downgraded to market weight on December 7, 2025. Meanwhile, Financials and Health Care, which we are overweight, have held up well. Investment banking is booming. Biotech is performing very well. Here's what has gotten our attention recently: (1) Technology: Semiconductors and Memory Correct. Margin calls on Samsung and SK Hynix in South Korea weighed on US semiconductor and memory chip stocks in recent days. Chinese AI lab Moonshot added to the pressure on Friday, launching Kimi K3, a 2.8-trillion-parameter open-weight model it says rivals the best from OpenAI and Anthropic, reviving DeepSeek-era fears and pushing the SOXX lower. The S&P 500 Semiconductors stock price index is likely to fall another 12% to its 200-day moving average (chart). Semiconductors' fundamentals are great. But investors are worried that they might not be sustainable. S&P 500 Semiconductor earnings are expected to grow 106.5% in 2026, up from 25% at the start of 2025, and now make up 51% of Information Technology sector earnings, more than double the share from three years ago (chart). We flagged the bullish outlook for memory stocks on March 23, when SK Hynix, Micron, and SanDisk traded at a fraction of today's levels. All three roughly tripled and hit records in June (chart). They have been overdue for a correction, which seems to be underway now. (2) Momentum is also hurting. Momentum stocks have had a strong run. The investment style is now more than 12% below its June 22 peak, according to the iShares MSCI USA Momentum Factor (MTUM) ETF (chart). The same unwind hitting memory has shown up harder in other corners of the AI trade. Neocloud operators renting out GPU capacity have been hit hardest. Nebius, CoreWeave, and IREN have all fallen 40%-50% from their 2026 peaks since Meta signaled in May plans to compete directly by selling its own excess computing capacity (chart). Oracle peaked at a record high of $328 on September 18 last year. It is down 61.5% since then, suggesting that investors are questioning whether its biggest customer, OpenAI, will be able to pay its bills (chart). (3) Financials: Great Earnings Beat Great Expectations. Last week's big bank earnings reports were solid, led by a blockbuster one from Goldman Sachs. The firm posted record Q2 revenues and EPS. Shares jumped to yet another record high (chart). JPMorgan, Citi, Bank of America, Wells Fargo, and Morgan Stanley all beat estimates too. The case goes beyond one quarter. Financials carry a 21.6% forward profit margin, second only to Technology, and a forward P/E of just 15.6, above only Energy (chart). The S&P 500/400/600 stock price indexes are all breaking out to new record highs (chart). (4) Health Care: Biotech & Pharma Out Of Their Commas. Health Care is finally performing better after years of lagging the market. Biotech ETFs are soaring. The IBB ETF is at a record high (chart). A wave of M&A is driving the biotech rally. Big pharma companies are racing to buy growth ahead of a looming patent cliff, alongside a steady run of FDA approvals and positive trial readouts. The broader sector confirms the same story. S&P 600 small-cap Health Care has surged to fresh highs, well ahead of both the S&P 400 and S&P 500 (chart).
GLOBAL MARKET CALL: Downgrading Emerging Markets To Market Weight
We are downgrading emerging markets to market weight, not because the Go Global thesis is broken but because four separate short-term headwinds are converging at once: (1) The price of oil is back above $80 a barrel as the IRGC keeps the Strait of Hormuz contested. (2) The FOMC is hawkish. With inflation still sticky and a solid labor market, financial markets are currently pricing in one rate hike before the end of this year. (3) That's boosting the dollar. (4) AI fatigue is showing up in South Korea and Taiwan. None of these reverse the multi-year case for international equities. Valuations abroad are cheaper than in the US, and the structural rotation away from decades of US stock market leadership is intact. Let's look further: (1) Stay Home vs Go Global. The price ratios between these two long-run investment styles representing the US stock market (Stay Home) and the rest of the world’s stock markets (Go Global) remain below their early 2025 peaks in both dollar and local currency terms (chart). They are also still below their long-term uptrends from 2010 through early 2025, and on short-term downtrends since then. Since early 2025, stock markets in the US and other developed economies have kept pace with each other (chart). From 2010 through early 2025, the US market outperformed. The ratios of the US versus emerging markets show the latter outperforming the former since early 2025 after underperforming since 2010 (chart). The downturn in the ratios since early 2025 was largely attributable to the AI-fueled booms in South Korea and Taiwan. There has been quite a bit of rotation in leadership so far in July. The countries that led the broader 2026 rally, South Korea and Taiwan, are the worst performers this month to date, down 19.5% and 10.4% respectively (chart). China and Indonesia are at the top of the leaderboard this month, with gains of 8.0% and 9.8%, respectively. The US is in the middle of the pack. (2) South Korea & Taiwan. South Korea's KOSPI is concentrated in two companies: Samsung Electronics and SK Hynix. Leveraged ETFs tied to each stock launched only in May and attracted a flood of retail money, sending the KOSPI soaring (chart). When these stocks turned down, margin calls cascaded, forcing brokerages to liquidate roughly 426 billion won in positions over the first 10 trading days of July alone. The minimum margin deposit was tripled, and purchases per trade were capped. The Bank of Korea hiked to 2.75%, its first move since January 2023, targeting a won near 17-year lows and inflation above 3% y/y. Taiwan has been a calmer version of the same AI trade. Its MSCI index is about 24% above its 200-day moving average, elevated but without the leveraged retail mania or the sharp reversal that hit South Korea (chart). The move remains orderly, a reminder that concentration risk and leverage, not AI exposure itself, drove South Korea's whipsaw. The South Korea and Taiwan ETFs are still up the most of any country ytd, at 67.2% and 53.2% in US dollar terms, respectively, significantly ahead of any other nation's ETF (chart). (3) ETFs. PBUS and ACWX, our US versus ex-US proxies, remain locked together near record highs, confirming that the broad Go Global trade is intact (chart). EMXC has been hit hard recently, unsurprisingly given its heavy exposure to South Korea and Taiwan. XC, which strips out those two markets entirely, trades at levels seen two years ago and continues to lag (chart). CQQQ has bounced off its 2026 low but remains a fraction of QQQ on any long horizon, a reminder that China tech hasn't joined the AI rally in the US or the ones in South Korea and Taiwan (chart).
Archive
Our Research Library
19 years of daily research, charts, and analysis
Topics
QuickTakes Topics
Timely commentary covering the most important market themes
Charts
Find Any Chart in Seconds
Search across 7,503+ real-time charts with instant visual previews
TARGET: FORWARD OPERATING EARNINGS PER SHARE
LOWE'S: STOCK PRICE (LOW)
LOWE'S: FORWARD PROFIT MARGIN
US HOUSE OF REPRESENTATIVE ODDS* IN 2026
Sample charts from our collection of 7,503+ visualizations
Tools
Research Tools
Interactive dashboards for tracking economic conditions and market trends
Beige Book Monitor
Fed economic conditions across 12 districts with traffic-light signals.
FOMC Policy Meter
Dovish-to-hawkish policy stance tracker across FOMC meetings.
FOMC Minutes Monitor
Hawk/dove signal extraction across 10 economic themes.
FOMC SEP Monitor
Fed projections and dot plot distributions across meetings.
FOMC Statements
Every FOMC policy statement since 1997 — full text, rates, and voting records.
Private Credit Monitor
Auto-updating chronology of the private credit liquidity crisis.
Release Calendar
Major publications from the Fed, ECB, IMF, and 12 global institutions.
Try Yardeni Research free for four weeks.
Full access to everything we publish. No credit card, no obligation.