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The most important charts and themes in markets and investing…
1) Hundred Year Flood
“This is a hundred-year flood. I haven’t seen anything like this happen in any area in over 40 years.” -Cook Team
What does the Apple CEO mean?
DRAM and NAND prices have jumped hundreds of percent in just the last year.
This means higher costs for data centers, smartphones, laptops, game consoles, and anything else that requires storage and memory.
AI is supposed to be a deflationary technological force, and it likely will be in the long term.
But currently, because demand exceeds supply, inflation is very high.
Here are some price increases for popular products that consumers have to bear:
-MacBook Pro: $1,699 -> $1,999
-Microsoft Surface Pro: $999 -> $1,599
-iPhone 18 Pro: $1,099 -> $1,299
-MacBook Air: $1,099 -> $1,299
-Sony PS5 Pro: $740 -> $900
-iPad Air: $599 -> $749
-Xbox Series X: $499 -> $649
-iPad Mini: $499 -> $599
-Nintendo Switch 2: $449 ->$499
-HomePod: $299 -> $349
-Apple TV: $129 -> $199
The cure for high prices is high prices – eventually.
Demand will eventually fall in response to this price increase.
And if this happens, memory prices will fall as a result.
But the question is: what is the breaking point and how expensive will things cost before they go bankrupt?
South Korea’s central bank is asking that question amid a memory mania that has produced unexpected profits for two of its biggest companies: Samsung and SK Hynix.
At Samsung, memory chip workers with a base salary of $52k are expected to receive a total bonus of about $410k this year.
Not to be outdone, at SK Hynix employees are expected to receive bonuses of over $454k.
This led to a surge in luxury retail sales in South Korea, with jewelry up 146% year-on-year and watches up 85%.
The classic definition of demand-pull inflation is too much money chasing too few goods. And that’s exactly what we’re seeing right now.
2) Most Dominant Investment Narrative
The most dominant investment narrative in the first half of 2026 is as follows:
-Buy a company that sells shovels.
-Sell to a company that pays in spades.
And assume spending never slows down.
So compelling was this theme that we saw investors pour $25 billion into memory ETFs ($DRAM) in less than 3 months, the fastest ETF ever to reach that number.
And Micron Technology ($MU), one of the ETF’s 3 largest holdings (along with Samsung and SK Hynix), reported a 15x increase in quarterly profit to $28.2 billion. That figure nearly matched Apple’s quarterly profit ($29.6 billion) and is expected to surpass Apple’s in the second quarter.
For years, Apple was the company with all the pricing power.
But even the strongest consumer brands have become price takers with limited critical input (memory).
How long will this imbalance last?
That will be a key question for the second half of 2026 and beyond. For now, hyperscaler companies are issuing more debt, raising more equity, and burning free cash flow to fund AI development.
However, their share prices began to weaken because investors began to tire of the increasing demand for capital. If this continues, one would think that a reduction in state spending will be the impact. And when that happens, the narrative immediately changes.
3) Everyone Expects Good News
Nearly 60% of S&P 500 stocks now have Buy ratings from Wall Street analysts, a historic high.
Why is this important?
When everyone expects good news, there is less room for positive surprises. That’s the setup going into Q2 earnings season.
4) Deal Making Boom
US deal value over the last 4 quarters: $1.89 trillion, a record high.
Last 2 big spikes: 2021 and 2000. Both occurred near market peaks.
Reminder: deal making tends to increase when confidence/optimism is high and discipline begins to wane.
5) Dangerous Investment Phrases
One of the most dangerous phrases in investing: “The price won’t go down any further.”
The ($MSTR) strategy is now down more than 80% from its high.
Hurtful? Yes. Never happened before? NO.
After the dot-com crash, its value fell 99.86%. If it matches that, that’s another -99% drop from here.
Why do Strategies fail? Its Bitcoin purchases are underwater (average purchase price $75k), with Bitcoin now in its longest (267 days) and deepest (-54%) drawdown since 2022.
6) Narrative Follows Price
Five months ago:
“The dollar is already crashing. Gold and Silver will skyrocket.”
Five months later:
US Dollar: +7%
Gold: -26%
Silver: -50%
Narratives follow prices far more often than prices follow narratives. The market has a way of undercutting consensus views/trades.
7) Some Interesting Statistics…
a) Nike is now down 75% from its peak in November 2021, the largest decline in the company’s history.
B) Semiconductor shares are up 237% over the past 14 months, surpassing the 234% surge at the height of the dot-com bubble.
C) A record 33% of household wealth is now held by Americans aged 70 and over.
D) Americans bet more than $165 billion on sports last year, more than the amount they spent on movies, books, concerts and sports tickets – combined.
And that’s all for this week. Thanks for reading! Have fun 4th!
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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 disclosure here.
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