Saturday, 25 July 2026

Market regime

Risk-on — as of the last close.

The week in review

The regime read is risk-on, the first risk-on print, a flip from neutral at the prior close-of-day. The upgrade came despite rates, not because of them. VIX sits at 18.58 (elevated), a touch lower than the prior session's 18.70. HY credit spread is 2.77% (week over week +4bps) and still tight. SPY closed the week at 738.90, +5.9% above its 200-EMA at 697.79. Outside an elevated VIX, none of that is a stress signal.

What the tape had to absorb was the rate complex backing up. The 10Y Treasury printed 4.71% (week over week +16bps), the 2Y 4.37% (week over week +19bps), and the real 10Y rate rose to 2.45% (week over week +14bps). The 10Y breakeven barely budged at 2.26% (week over week +2bps), so the move was real yield, not inflation expectations. The 10Y-2Y spread held at 0.36%, narrower by 1bp on the week. Breadth improved to healthy but marginal: 58.0% of names (566/976) were above their 50-day EMA, up from 54.4%.

Labor gave the tightening no pushback. Initial jobless claims fell to 187K (week over week -22K). The older monthly reads round out a still-firm backdrop: Fed Funds 3.63%, unemployment 4.2%, nonfarm payrolls 159.0M, housing starts 1,427K. A fresh risk-on read with VIX still elevated and real yields grinding higher is the kind that keeps you selective rather than aggressive.

Themes in motion

All ten tracked narratives are still flagged accelerating, so nothing matured or rolled over this week. Leadership remains the AI-compute-to-power chain and its adjacencies:

• Compute core: AI chips & memory (7), semi foundry & equipment (5), networking & optical (6), GPU cloud & neoclouds (5), AI datacenter infrastructure (3)
• The power bid behind it: industrial power & grid (11, the broadest cohort), nuclear & uranium (6)
• Orthogonal accelerators: space economy (9), oncology & immunology (9), oil, energy & geopolitical (9)

The signal is that the model sees no saturation yet across the compute stack. The same theme cluster is carrying breadth even as the index-level breadth reads only healthy but marginal.

Under the lens

419 dossiers were deep-refreshed this week, weighted toward the accelerating cohorts. The two names carrying HIGH conviction:

• AEHR (Aehr Test Systems): test-and-burn-in leverage on the AI chips & semi-equipment acceleration; a picks-and-shovels read on production ramps, not on any single chip design.
• ASML (ASML Holding N.V.): the litho chokepoint on the accelerating semi foundry & equipment theme; the one name every foundry roadmap routes through.

Around them, the refreshed set maps cleanly onto the leading themes: AMAT, AMD, AVGO, ADI and ARM in the compute core; AAOI and APH on networking & optical; APLD on AI datacenter infrastructure; ASTS on the space economy. A deep oncology bench of ABEO, ADPT, ALKS, BHVN, BCAX and BFLY sits under the immunology tape. Note APLD sits in both the refreshed dossiers and next week's catalyst calendar, which sets up the timing question below.

The week ahead

The calendar front-loads next week hard, with a dense print cluster on Monday, 27 July 2026 (T-2d): AMKR, APLD, CLS, DYN, GENI, INHD, KFRC, LIFE, LPG, LPRO, RMBS, SANM, AGYS. Tuesday, 28 July 2026 (T-3d) adds ACHC.

What I'm watching: the semis-adjacent reads AMKR, RMBS, SANM and CLS, as early tells on whether the AI-compute theme's acceleration is confirmed in guidance, not just price. APLD is the one to flag carefully. It has a refreshed dossier and a HIGH-interest theme, but earnings land inside the T-3d binary window, so the print gates any read rather than the setup doing it. The regime having only just flipped to risk-on, on its first print, is the reason to let these prints resolve before leaning. Strength through the cluster can then confirm which of the accelerating themes still has runway on the other side.