The Week in Charts (7/14/26)

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The most important charts and themes in markets and investing…

1) Are We in an Earnings Bubble?

Earnings are booming, there’s no doubt about that. A 24% growth rate is now expected for 2026, a sharp acceleration from the gains we saw in 2025 (+13%) and 2024 (+10%).

But the question investors need to ask is how much of this increase is due to a) one-off investment gains and b) a capital expenditure cycle that may be nearing peak growth.

In the first quarter, just 3 companies (Google, Nvidia, and Amazon) saw massive gains in the “other income” category from their private investments in companies like SpaceX and Anthropic.

The total of $69 billion in “other income” was roughly 10% of the S&P 500’s overall net income for the quarter. Absent this boost, S&P 500 YoY earnings growth would have been 15% in Q1, well below the reported figure (+28%).

The second part of the question is perhaps more important: is the capital expenditure cycle at or near its peak growth rate?

For if it is, then the enormous boost to S&P 500 earnings growth we’ve seen from semiconductors will begin to slow while the reality of depreciating AI infrastructure for the hyperscalers will set in.

Why is it probable that we’re nearing a peak growth rate?

Take a look at the following chart. If the AI spending spree continues as expected, the hyperscalers cumulative free cash flow will turn negative by next year. At the same time, semiconductors will inherit the earth.

I’m skeptical this will play out as expected (the shareholders of the hyperscalers will likely start revolting before we get to this point), but even if it does that would certainly imply a deceleration in growth as there wouldn’t be any free cash flow left to fund the boom. Yes, we could see additional debt and equity offerings as a stopgap (which is already happening), but that’s unlikely to be enough to fuel a continued acceleration in growth.

2) The Floodgates Are Open

SK Hynix, the South Korean memory-chip giant, went public in the US last week through a Nasdaq-listed ADR (Ticker: $SKHY). It raised an astounding $26.5 billion and was more than seven times oversubscribed.

That makes it the second-largest U.S. IPO ever, trailing only SpaceX – which went public less than a month earlier.

We’re only halfway through July, and 2026 is now roughly $1 billion away from surpassing 2021 as the biggest US IPO year on record.

And Anthropic and OpenAI could still be coming before year-end.

The floodgates are officially open.

3) The “Buffett Indicator” Hits a Record High

The ratio of the US Stock Market’s Value to GDP – the “Buffett Indicator” – has climbed to a record high of 234%. That’s now more than 3 standard deviations above its long-term historical average.

When valuations are this elevated, compelling opportunities become harder to find.

That likely explains why Berkshire Hathaway is holding a record amount of cash.

4) We’re Not Growing Out Way Out of It

The idea that we’re going to “grow our way out” of the national debt crisis isn’t supported by the recent numbers.

Real GDP growth is slowing toward 1.3% while the national debt has increased by over $3 trillion in just one year.

When debt is growing faster than the economy, the math gets worse, not better.

5) How a Costco Cashier Became a Millionaire

Costco cashier Tony Barzar is so beloved that longtime customers greet him with hugs – and after four decades of saving in his 401(k), he’s now a millionaire (read the WSJ article here).

His story is proof that extraordinary wealth can come from doing ordinary work exceptionally well.

Save consistently, invest for the long run, and never leave the employer match on the table.

6) A Few Interesting Stats…

a) 41% of American men under 30 believe they could score on a penalty kick at the World Cup if given the chance. Every couch has a world-class striker sitting on it.

b) NYC’s median one-bedroom rent just hit a record $4,000, up 54% over the last decade. Rent control helps the lucky few who already have an apartment. Everyone else competes for a shrinking pool of housing at ever-higher prices.

c) Only 135 of the S&P 500 constituents in 1996 are still in the index today. The lesson: companies change, leaders fade, and innovation never stops.

And that’s it for this week. Thanks for reading!

Every week I do a video breaking down the most important charts and themes in markets and investing. Subscribe to our YouTube channel HERE for the latest content.

Disclaimer: All information provided is for educational purposes only and does not constitute investment, legal or tax advice, or an offer to buy or sell any security. Read our full disclosures here.

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