DEFCON 4

Issue 83;

• Fourth consecutive week of decline in breadth
• Market rotation has faded
• Rate-sensitive sectors at risk

The World Index has fallen back to a ByteTrend Score of 2 in USD. This could be nothing, but when it’s accompanied by falling breadth, it should not be ignored.

World Index – Developed Markets – Daily

CAPR Winners

The winners are dominated by tech, energy and finance. The region with the lowest representation is the Americas.

CAPR Losers

Rate-sensitive sectors, such as consumer, real estate, comms and utilities, dominate. Weak stocks in CAPR make up 37% of the global total. Asian real estate and US utilities fare worst.

Trend Type Performance

The number of bullish trends remains weak, while the number of weak trends remains strong, but not roaring yet. That said, emerging trends were up a notch.

All trend type performance has been weakening since 29 May 2026.

Trend Type Performance – Since the Momentum Peak

In the following chart, look what happens when we start the clock then. The bear and weakening stocks enjoyed the rotation while the leaders and emerging stocks eased back. Now the bear trends are falling the fastest.

If that continues, it means we have a weak group, which happens to be rate-sensitive. Rising bond yields could tip the market. This phase of the rotation is complete.

Regions and Industries Average Relative Score

This table (below) shows the average CAPR score for each global industry, by region and in total.

Tech Hardware continues to lose strength but remains in the top spot. Many other industries have also weakened in the last few weeks, including Software, Investment, Metals & Mining, Transport, Advanced Industrials, Automotive, Leisure, Home & Lifestyle, Construction, Food & Beverages, and Property. High oil prices are either an input cost to the processes in these industries, or they suffer when interest rates rise.

The few resilient areas in September have been Banking & Lending, Energy, Healthcare, and Diversified Holdings, while Telecoms and Utilities have also picked up following a bad summer. European Banking remains the standout, while Asia leads tech, and Mining is strongest in the Americas.

User Guide

Refer to our GTI: User Guide for an overview of the key concepts and terminology used in this report. These concepts may take a little bit of getting used to, but they are very powerful once you do.

Leading Trends with New Highs

These stocks are trading at the 30-week CAPR highs with a ByteTrend Score of 5. All charts shown are CAPR rebased to 100.

Arista Networks

This is an example of a continuing strong trend in Tech Hardware. Arista makes high-performance networking equipment and software for large data centres, which enable the processors to talk to each other quickly. Microsoft and Meta are among its largest customers. Revenue growth of 37% is high, rising, and beating guidance, while margins are improving. It is reinvesting heavily into R&D, with a focus on its AI capabilities.

Repsol

Spanish oil company Repsol is benefiting from the same refining boom as the US refiners. It produces oil and gas around the world, but it also runs five refineries in Spain. With Hormuz disrupted and Ukrainian drones hitting Russian refineries, refined fuels like diesel and jet fuel are scarce. Second-quarter profit tripled to €1.8bn, net debt fell to €3.7bn, and buybacks have been increased. It also has a new field, Pikka in Alaska, which is ramping up this autumn.

New Leading Trends

These stocks are trading at the 30-week CAPR highs with a ByteTrend Score of 5, except they are new trends this week, having previously had a score below 5. All charts shown are CAPR rebased to 100.

Teva Pharmaceuticals

Israel's Teva is one of the world's largest generic drug makers, and for a decade it was a cautionary tale. It borrowed heavily to buy Allergan's generics business for $40bn in 2016, just as US generic prices collapsed, and the shares fell more than 90%. Now it is rebuilding around its own branded drugs for movement disorders, migraine and schizophrenia. Those grew 43% last quarter to over $1bn, a fifth of sales, which offset falling generics. The shares jumped 12% on the results.

Emerging Trends

These stocks are trading at the 30-week CAPR highs with a ByteTrend Score of less than 5. They don’t have to be in an uptrend, just emerging. All charts shown are CAPR rebased to 100.

Deere and Co (John Deere)

Deere is the world's largest maker of farm machinery, the green tractors, and combines found across rural America and worldwide. Farmers have had a tough few years, with low crop prices and high borrowing costs, and sales of big machines have fallen. This has hurt Deere’s sales growth and margins, but the stock remained resilient, and the CEO has now said that 2026 marks the bottom of the cycle. In Q3 results, profits rose 7% to $1.4bn, construction equipment sales jumped 18%, and full-year guidance was raised.

Weakening

These stocks are trading at the 30-week CAPR lows with a ByteTrend Score above 0. They are weakening trends but not yet downtrends. All charts shown are CAPR rebased to 100.

American Express

American Express is both a card issuer and a payment network. Unlike rival networks, Visa and Mastercard, it lends to its own customers and charges them fees. They are mostly wealthier Americans who pay hundreds of dollars a year for premium cards (and the travel perks that come with them). Business is solid, with card spending growing at its fastest pace in three years, but the valuation is high, and management kept its profit forecast unchanged so it could put the extra money into marketing and technology. Meanwhile, rising interest rates increase credit risk.

Cummins

Cummins is the world's largest independent maker of diesel engines, mostly for trucks, but it also builds the backup generators that keep data centres running. This briefly turned it into an AI stock, and the shares rose over 40% in a year, even though power systems are less than a fifth of sales. Second-quarter revenue hit a record $9.5bn, but the stock fell as earnings missed expectations, costs rose, and investors grew wary of truck demand amid new emissions rules in 2027.

Bear Trends

These stocks are trading at the 30-week CAPR lows with a ByteTrend Score of 0. They are in a downtrend. All charts shown are CAPR rebased to 100.

Tencent

Tencent owns WeChat, the app that more than a billion Chinese people use to message, pay, and shop. It is the world's largest video game company. Revenue grew 11% last quarter, but profit barely moved as it poured money into AI to keep up with Alibaba and ByteDance. Investors fear the spending won't pay off, and this year, money has ignored Chinese internet companies in favour of AI hardware stocks.

Commonwealth Bank of Australia

Banks are strong, but not in Australia. Its commodity-heavy economy likes cheap oil and strong Chinese demand, but it has neither right now. A 30-year bull market has left the housing market particularly expensive, just as mortgage rates rise to a fresh high of 6.2%. CommBank is Australia’s largest, and local pension and index funds provide regular inflows regardless of valuation, leading it to trade at a premium to local and global peers.

GTI 200 Spreadsheet

We are pleased to share the GTI 200 spreadsheet. Download the spreadsheet below to view the CAPR and local currency scores, and more, for the world’s largest 200 stocks. Have a look at the different groups and the main list “All stocks”. The Insights tab is interesting, and don’t forget to expand the columns by clicking on the “+” at the top of the page if you want to see more trend data.

Outlook

This week, the story is beta, not alpha. Safe havens are thin, and there are no new surprises. More stocks are weakening in the face of a rates crisis that seems to have no end in sight.

Thanks for reading GTI.