The Dollar Bull

Issue 64;

• The dollar surge rattles the market.
• Tech hardware pulls back from the skies.
• Korea has been super strong, but the breadth is weak.

The World Index drops to a ByteTrend Score of 4 in USD after a brutal Friday, which saw the SOX fall by 10.3% on the day and 4.7% over the week. The price is just below the 30-day moving average, hence a downgrade to a 4.

World Index – Developed Markets – Daily

Global Equity Breadth – Local Currency

The global breadth has slipped but only marginally. Breadth, in local currency terms, remains strong overall. The “alpha breadth” remains narrow, i.e. the number of companies beating the index remains unusually low.

South Korea Equity Breadth – Local Currency

Korea’s KOSPI Index has been exceptionally strong, yet the breadth is remarkably weak. This divergence between performance and breath means the KOSPI’s best days are done.

Technology Hardware – Local Currency

Tech hardware has been leading the market. Membership used to be exclusive, but in recent weeks, the entire industry has joined the rally. Perhaps this has peaked following the recent setback, but it’s too early to tell.

Strong Dollar

The US dollar now has a ByteTrend Score of 5. These can be short-term, erratic signals, but the risk is that the dollar keeps going. Nothing stalls a bull market quite like a strong dollar.

Net Winners - Stay Long Energy, Financials, Utilities

The winners-less-losers metric guides asset allocators. Energy is the elephant in the room, as despite two soft months, the number of stocks consolidating within uptrends remains high, especially in the Americas.  Some financials are looking forward to fees resulting from the IPO boom. Tech remains mixed between hardware and software and has endured a tough week. Utilities remain well supported.

Trend Type Performance

Following a surge in the leadership, we have seen the first correction, which is mild compared to the ascent, and overdue. The bear and weakening groups did not rise last week, which demonstrates this was a broad market selloff. That said, their pullback was slight.

Regions and Industries Average Relative Score

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

There was little change this week, despite the market shake-up. Many sectors were flat or slightly up in relative terms, as the World Index fell late in the week. Banking & Lending stocks bounced after a difficult few months, while Tech Hardware stocks continued to lead, despite Friday’s decline. Energy remains strong, but Mining continues to weaken, as the gold price struggles to find support. Utilities surged in Q1 but have given back all their relative performance so far in Q2.

European Media stocks are on the rise again, but Property and REITs are especially weak there. In Asia, Tech Hardware’s lead is even more extreme because of Taiwan and South Korea, while their Food, Leisure, and Luxury stocks are the weakest. In the Americas, Telecoms are notably weak, and Chemicals are weakening sharply, but the Property sector is holding up well.

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.

Fortinet

Fortinet was caught up in the software sell-off (“SaaSpocalypse”) of early 2026, but has turned things around in dramatic fashion. It is a cybersecurity company best known for firewalls, but it now sells a broader suite of network, cloud, application, and other security products. The heightened threat of cyberattacks, driven by the proliferation of AI-enabled tools, shifted investors’ mindset from disruption fears to a belief in greater necessity and faster growth. This pivot was aided by a knockout earnings report on May 6, which showed billings rose 31% YoY, driving record free cash flow and margins.

Morgan Stanley

The financials segment is bifurcating – many of its stocks are weakening or bearish, but Morgan Stanley is part of the elite group staying in the Leading Trend category. The burst of IPOs (SpaceX, Anthropic, OpenAI) and capital raising (Google) underway this year certainly helps the large global investment banks. Its strength of late has been in trading and wealth management, reflecting the resilience that diversification can bring. Smaller, more pure-play financial firms like CME, PayPal, or Coinbase are the ones struggling. 

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.

Monster Beverage

Monster is famously one of the world’s best-performing stocks over the long term. This surprises people initially, as it’s just energy drinks. Yet it has compounded free cash flow per share at 20% for the last 20 years. It is a simple business model, executed brilliantly. Its disciplined brand-building allows it to generate high margins on an energy drink, which they reinvest to generate further growth, without distraction, for decades. Most of its outperformance came before 2016, but a drinks company keeping up with this stockmarket is an impressive feat.

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.

Elevance Health

There is a group move in healthcare, as seven of the 20 largest Emerging Trends are from the sector. It is a large US health insurer and care services company, offering health plans plus pharmacy, behavioural health, and care management services. After a tough period, it is improving as it shifts toward the “payvider” (insure patients and provide the care) model exemplified by peer company, United Healthcare. This deepens customer relationships and can improve margins.

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.

Symbotic

Symbotic is a warehouse automation company using robotics and software to help retailers and distributors automate pallet and case movement. It has announced reporting/control issues and softer guidance in a delayed annual report that reported lower-than-expected earnings, within a broader framework of high but slowing growth. As a steady compounder priced heavily on its future earnings, this introduced a much higher degree of uncertainty, which is being reflected in the price.

Nu Holdings

NuBank is one of Latin America’s foremost fintech companies, challenging the likes of Mercado Libre’s MPago for the fast-growing consumer banking and lending market. Unencumbered by costly legacy physical stores and staff, these upstarts can undercut their traditional competitors and, being digitally native, have significantly better data to improve their pricing and loan selection. Consumer spending is not as strong as it was, leading some to worry about the credit growth at Nu.  

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.

Korea Electric Power Corp

Founded in 1898, KEPCO is South Korea’s state-controlled electric utility, with generation dominated by nuclear and coal. Its stock tripled in the last year, as utilities joined in the AI trade and Korea became its epicentre. However, since January 21, it is already down 49%, following another 5.5% overnight drop along with the tech stocks. Its balance sheet is stretched, and its latest results showed zero power demand growth, leaving it reliant on (and therefore vulnerable to) policymaking, which may soon have other fires to put out.

EQT

Last week, multiple private equity firms, led by the Swiss firm Partners Group, introduced withdrawal limits (“lockups”) on some of their largest flagship funds. They told investors in the $8.6 billion Global Value fund that it had to limit withdrawals to 5% in the second quarter. This followed the news that Cliffwater’s flagship private credit fund redemption requests hit 17%. EQT recently sold its stake in Galderma, formerly of L’Oreal and Nestlé, generating $20bn to strengthen its balance sheet, but the sector woes are pulling it down nonetheless.

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 dollar has the power to stifle rallies when it raises its head. Last week’s selloff was broad, and coincided with weakness in bonds, gold, Bitcoin, and oil, not just tech. Is the dollar the only portfolio hedge left?

Thanks for reading GTI.