The Week in Charts (2/11/26)
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The most important charts and themes in markets and investing…
1) Dow 50,000
The Dow crossed above 50,000 last week for the first time, its 22nd 1,000-point milestone of the roaring 20s decade.
2) The Software Sell-Off
While the Dow was hitting an all-time high, the same could not be said for the Software Sector ($IGV ETF). Its drawdown hit -32% last Thursday, the biggest since the 2022 bear market.
Here’s a look at drawdowns in some of the largest software companies…
While the sector has been lagging for some time now, the sell-off accelerated last week after privately-held AI company Anthropic released new functions in its Claude application.
What spooked software investors? Its ability to review contracts and create legal briefings. The fear is that AI will one day allow a company to create internal applications to handle human resources, sales, customer tracking and other back-office functions.
Would a company still pay a software vendor millions of dollars a year for those services if they could be done much cheaper internally? No.
But are we at a point where this is being done en mass? No.
Replacing complex software with an AI chatbot is easier said than done and won’t happen overnight. And all of these software companies are utilizing AI to become much more efficient themselves.
Which begs the question – is this an overaction and an opportunity to buy the biggest software companies when they’re on sale? Only time will tell.
3) The Magnificent Two?
The magnificent seven leadership continues to fade, with only Google and Nvidia outperforming the S&P 500 since the start of 2025.
4) The Everything Reversal
International stocks over US stocks.
Small and Mid-Caps stocks over Large Caps stocks.
Value stocks over Growth stocks.
That’s been the story thus far in 2026…
5) The Other Side of a Mania
The Crypto mania that took place after the 2024 presidential election was a sight to behold, with speculators rushing in to capitalize on the perceived friendliness of the new administration to the Crypto industry.
At its peak on November 20, 2024, the Bitcoin treasury company Strategy ($MSTR) had a market value that was 3x higher than its underlying Bitcoin holdings. And today, after a 77% decline, it trades a discount to its Bitcoin holdings. This is the other side of a mania.
At last week’s low of $60k, Bitcoin was down over 52% from its October 2025 peak. This was its 9th 50+% decline off an all-time high since it began trading on exchanges back in 2010.
6) Fed On Hold Until June
Jerome Powell now has two meetings left as Fed chairman and the odds of another rate cut under his tenure continue to decline.
The March 18 FOMC meeting has a 6% chance of a cut while the April 29 meeting has a 20% chance.
The market is still pricing in two rate cuts for this year, one taking place in June (25 bps cut to 3.25-3.50%) and the other taking place in September (25 bps cut to 3.00-3.25%).
7) A Few Interesting Stats…
a) Walmart is trading at a higher forward P/E Ratio (39x) than Apple, Google, Amazon, Microsoft, Nvidia, and Meta.
b) The combined revenues of the Big 4 US tech companies hit a record $1.86 trillion over last 12 months. That’s larger than the GDP of all but 13 countries.
c) 25 yrs ago: Walmart’s revenue was 47x larger than Amazon. 10 yrs ago: Walmart’s revenue was 3x larger than Amazon. Today: Amazon revenues are higher than Walmart.
d) $10,000 invested in Google at its IPO in August 2004 is worth over $1.3 million today.
e) Apple has bought back $727 billion in stock over the past 10 years, which is greater than the market cap of 488 companies in the S&P 500.
And that’s it for this week. Thanks for reading!
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