Jaws

Issue 73;

• Korean bubble bursting.
• Leading trends stall as the “Jaws” close.
• Energy poised to bounce.

The World Index returns to a bullish ByteTrend Score of 5 in USD. The price is yet to make a new high. The ByteTrend models are showing the jaws closing, which means fewer new CAPR lows and far fewer CAPR highs. The market is consolidating, which could be the start of a major rotation.

World Index – Developed Markets – Daily

Global Equity Breadth – Korea Local Currency

People talk about concentration in the US stock market, but Korea’s KOSPI index has over 50% in two stocks: Samsung and SK Hynix. Yet below the surface, Korean market breadth had been declining since May.

Korean Foreign Investment

Koreans are loaded up on leverage, buying 2x and 3x ETFs on margin, to get a slice of the action in these domestic AI champions. Foreign investors joined the party for a while, but in recent weeks have pulled out at unprecedented speed, as valuations reached nosebleed territory and trend strength began to wobble. Capital outflows of this magnitude, when coupled with high leverage, can cause serious damage. The risk is contagion to global tech stocks and beyond.

Oil

The oil price is still just a 1 on the daily price chart, but a move to $81 would see that change radically. With inventories drawn down for 4.5 months and no chance of peace in the Strait of Hormuz, stay long.

Energy Stocks

There are still several energy stocks marked as leaders despite the oil price correction in May and June. New highs seem imminent.

Net Winners

The winners-less-losers metric guides asset allocators. More sectors host the leaders, but it is notable how weak Asia is. Financials, energy and tech are dominant. Consumer defensives are still weak.

Trend Type Classification - CAPR

This shows what we mean by the Jaws. The number of leading trends is the lowest reading since we began measuring in May last year. Emerging trends are also weak, yet the bear side is normal. It means the leadership, which has been thin, is peaking in several areas. This market is tired.

Trend Type Performance

The Jaws are closing, meaning market performance is being driven by the weakest stocks. The leaders and emerging trends are giving ground back.

Regions and Industries Average Relative Score

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

Few industries did well last week, as tensions in Iran were revived. Only Energy and Software rose notably, with Software continuing its multi-month fightback and Energy bouncing after a slump in the last few weeks.

Tech Hardware remains at the top, but is weakening slightly, and Advanced Industrials are fading too. Metals & Mining and Telecoms are two industries that continue to weaken, and Chemicals, Construction, and Diversified Holding companies are following suit.

In Europe, Banking & Lending remains strong, while Luxury (Home & Lifestyle) remains very weak. In the Americas, Healthcare and Insurance (defensive sectors) have bounced.

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.

Apple

Apple did not follow its Magnificent 7 peers by spending huge sums on data centre construction. While AI capex was popular in markets, it lagged. However, now that those hyperscalers are seeing their spending and returns questioned, Apple is back on the up, after a multi-year consolidation (no alpha since 2022).

Mitsubishi UFJ Financial

MUFG is one of Japan’s largest financial conglomerates. It delivered strong 2025 results, with significant profit growth driven by higher interest rates in Japan, lending expansion, and fee income, while credit costs and asset quality were managed prudently. Its 2026 outlook targets record profits and a 12% ROE, supported by ongoing digital innovation and AI adoption.

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.

United Overseas Bank

United Overseas Bank (UOB) is one of Singapore’s largest banks, offering a wide range of services to retail/wholesale customers across APAC, Europe, and America, with a focus on Singapore and Southeast Asia (ASEAN). Although interest income has declined recently, fee income has held up well, growing 10% to reach a record high in the most recent quarter. Its diversified business model, deepening ASEAN footprint, and digital wealth platform underpin its growth strategy, and it is making conservative credit provisions and is disciplined on cost.

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.

Union Pacific Corp

Union Pacific Corp (UNP) is a North American railroad, alongside Canadian National and Berkshire’s BNSF. As a group, they have started to outperform. They have irreplaceable assets (who needs two railroad networks) but are still linked to consumer demand, which is showing early signs of recovery. UNP is delivering strong operational performance with volume growth, high service levels, and pricing above inflation. However, as with its peers, it trades at high valuations relative to its past.  

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.

Oracle Corp

ORCL is the flag-bearer for spending heavily on data centre construction. Its annual capex rose from 4% of sales to over 100% in early 2026. This has taken free cash flow from healthy to negative in a flash. It is the canary in the hyperscaler coal mine.

Netflix

Terry Smith made headlines last week when he announced that market conditions had driven him to trade more actively than in the past and pay more attention to momentum. Netflix was one of the stocks he added in the first half of 2026. However, in CAPR terms, the momentum is not promising. It’s a brilliant company, and while cheaper than at its peak, it is hardly in deep value territory. The distraction of a major bidding war for Warner Bros Discovery hasn’t helped either.

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.

Costco

Costco is one of the world’s great businesses, one of Charlie Munger’s absolute favourites. He was even on the board. It collects annual fees from its customers, creating incredible loyalty, and offers great products at the best prices, along with a fun shopping experience. It has constantly reinvested and fed any savings back to the customer through lower prices, a flywheel that has been spinning for decades. However, its quality is well known, and its valuation has reached extreme levels. In price terms, it’s down 16% over the past year. In CAPR, it’s much worse than that.

Disney

Another great American business, but this time, the decline is much greater and much older. Disney has unrivalled IP but, strategically, has failed to capitalise on changes in the industry (e.g. the decline of cable TV). Its valuations peaked in 2021, but imperfect acquisitions, an ill-fated streaming pivot, theme park weakness, and a mixed record on the movie front have left it lurching from crisis to crisis. This is reflected in the ongoing board-level dramas, with Bob Iger now finally stepping back again, having been replaced by Josh D’Amaro.

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

The Jaws are closing. On the one hand, Korea is signalling that tech hardware is tired; on the other, weaker stocks are not falling in price. The market is therefore stable, but rotation could show up more dramatically in the coming weeks. Energy is the one to watch out for.

Thanks for reading GTI.