US equities up for six weeks in a row

Summary

Moving Markets — "US equities up for six weeks in a row"

Podcast by Julius Baer — May 11, 2026
Host: Bernadette Anderko

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Episode Overview

In this episode, Bernadette Anderko is joined by Julius Baer colleagues Mike Rauber (Market Analyst) and Mensor Pochinsi (Head of Technical Analysis) to break down what’s driving the ongoing rally in US equities, the latest on global markets, and key technical trends. The discussion covers the impact of geopolitical events, strong corporate earnings, sector dynamics (notably semiconductors), and anticipated economic data releases. The latter half features a technical analysis deep-dive on oil, the US dollar, and whether semiconductors are in bubble territory.

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Key Discussion Points & Insights

1. Macro & Geopolitical Update

[00:02–04:59]

• US-Iran Stalemate:
  The US rejected an Iranian counter-proposal for peace, with President Trump calling it "totally unacceptable." This leaves negotiations at a deadlock at the start of the week.

• US-China Relations:
  President Trump is set to travel to Beijing for a meeting with President Xi Jinping.
  Quote:
  "President Trump will travel to Beijing to meet President Xi, highlighting relations between the two leading geopolitical and artificial intelligence superpowers." (Mike Rauber, 04:08)

• Other Geopolitical Notes:

  • US Treasury Secretary Scott Bessant’s visit to Japan will focus on the weak yen and potential currency intervention.
  • Final day of Russia-Ukraine ceasefire.
  • UK government’s "King’s speech" taking extra focus after Labour’s election defeat.
  • Imminent leadership change at the Federal Reserve: Kevin Ward expected to take over as Chair.

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2. US Market Performance & Drivers

[00:56–02:11]

• Record US Equity Highs:
  The S&P 500 climbed 0.8% on Friday, marking six consecutive weeks of gains, largely due to:

  • 82% of companies beating Q1 earnings estimates.
  • Strong labor data: Non-farm payrolls rose 115,000, nearly double forecasts.
  • Rate cuts now seen as unlikely in light of solid economic data.

• Consumer Sentiment Headwind:
  Despite market strength, the University of Michigan consumer sentiment hit a record low of 48.2 due to higher gasoline prices.

• Tech & Semiconductors Drive Gains:
  The Nasdaq gained 2.3%, with semiconductors leading. Quote:
  "The move was led by Intel which jumped 14% after the Wall Street Journal reported that it struck a preliminary chip supply deal with Apple. The news lifted other semiconductor stocks, including Micron which gained 15%." (Mike Rauber, 01:54)

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3. Global Markets Snapshot

[02:11–03:46]

• Asia:

  • Nikkei crossed 62,000 for the first time.
  • South Korea up 4% for the day and 86% year-to-date, driven by semiconductor stocks.
  • Notable single-stock moves:
    • Nintendo down 9% (warned on lower margins due to chip costs).
    • Sony up 10% (joint venture with TSMC; higher profit guidance).

• China Data:

  • Producer prices +2.8% YoY (fastest since the pandemic).
  • Consumer inflation +1.2% YoY (above expectations).
  • Trade data: Exports +14%, imports +25%, signaling robust external demand despite geopolitical headwinds.

• Europe:

  • Euro Stoxx 50 up 1.5% last week, but more cautious sentiment overall.
  • German defense contractor Rheinmetall down 7% on lackluster Q1 results.
  • US threatens higher tariffs on the EU, creating additional uncertainty.

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4. Week Ahead: Key Data & Corporate Highlights

[04:59–05:39]

• Inflation Data Watch:
  Releases expected from the US, Germany, India, and Japan; China’s numbers already out.

• Earnings Season:
  Major companies reporting: Munich RE, Alibaba, Allianz, Cisco, Siemens, Zurich Insurance.

• IPO Pipeline:
  AI chipmaker and Nvidia rival Cerebras Systems set to list in NY, having increased its pricing range to $125–$160 per share. Quote:
  "Clearly the music is playing in semiconductors right now." (Mike Rauber, 05:27)

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5. Opening Outlook & Asset Class Moves

[05:39–06:08]

• European and US equity futures projected to open flat despite ongoing geopolitical tension.
• Brent oil up 4% to $205/barrel.
• Gold down nearly 1%.
• US dollar little changed at the week's open.

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Technical Analysis with Mensor Pochinsi

[06:17–10:57]

1. Oil & Oil/Gas Stocks

[06:23–08:01]

• Short-term Top Seen in Oil:

  • Oil is believed to be in a topping process; highs likely already in and not expected to exceed $120 again.
  • Key support: $92. If broken (closing basis, two days), supports next major move down toward $75–$72.
  • Oil/gas stocks have markedly underperformed the market since peaking on March 27—a 23% relative underperformance.

  Quote:
  "Interestingly, the oil and gas stocks themselves peaked already on the 27th of March. On a relative basis, they have seen now a massive underperformance since then—by 23%." (Mensor Pochinsi, 07:18)

  • Even with early positioning, investors in oil/gas stocks would now be underperforming the S&P 500 by 5–7% since the conflict began.

2. US Dollar Outlook

[08:01–08:59]

• Dollar Losing Safe Haven Appeal:
  Despite war and rising oil, the US dollar remains range-bound, surprising many.

  • Expected to weaken further, especially if oil prices decline.
  • Most notable weakness versus Swiss franc and EM currencies.
  • Recommendation: Stay short US dollar (especially versus CHF and emerging markets for higher yield).

  Quote:
  "Time is running out and probably with the decline in oil prices, the US dollar will attempt to fall to new lows…We still recommend investors to be short the US dollar." (Mensor Pochinsi, 08:18)

3. Semiconductors — Bubble Risk?

[08:59–10:57]

• No True Bubble (Yet):

  • While semiconductor stocks appear overheated, technical signals and investor positioning suggest more upside may remain without an immediate bubble.
  • Bubble risk would increase if current gains (+30–50%) continue unabated for the next six months.
  • A correction or consolidation (-10–15%) in the coming 3–6 months would help mitigate bubble risk.
  • Recommendation: Stay invested in semiconductors; they drive gains across the board (US, EM, US small caps).

  Quote:
  "Looking at prices, one could come to the conclusion that it is a bubble. We think it's not a bubble... For now, we recommend investors to stay invested in semiconductors." (Mensor Pochinsi, 09:12)

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Notable Quotes & Memorable Moments

• On record US equity rally:
  "The S&P 500 rose 0.8% on Friday to a fresh record, extending its winning streak to six weeks…strong earnings with 82% of companies beating Q1 estimates." (Bernadette Anderko, 00:56)

• On the semiconductor surge:
  "Wherever you look, it's basically semiconductors that are driving the gains…everything else is quite muted." (Mensor Pochinsi, 10:37)

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Timestamps for Important Segments

• [00:02] Introduction & geopolitics
• [00:56] US market recap & drivers
• [01:54] Semiconductor/tech rally details
• [02:24] Asia market highlights
• [03:00] China inflation & trade data
• [03:46] European markets & tariff threat
• [04:03] US-Japan diplomatic focus, Fed leadership change
• [05:05] Key corporate reports & IPOs this week
• [05:48] Oil, gold, and forex update
• [06:17] Technical analysis: oil, USD, semiconductors
• [08:59] Semiconductor bubble risk discussion

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Conclusion

This episode delivers a concise, actionable update on why US equities continue to rise, why tech and semiconductors are in the spotlight, and what investors should watch for in key asset classes. The technical discussion warns of risks in oil and US dollar positions, but supports sustained semiconductor exposure. Global macro uncertainties persist, but strong corporate performance and selective sector strength keep the rally going.

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Transcript

[A]

Good morning everyone and welcome to Julius Baer's Moving Markets podcast on Monday 11th May with me, Bernadette Anderko. Last week the US proposed a peace deal to Iran. The Iranian counter proposal was rejected over the weekend by President Trump who called it totally unacceptable. So we start the week with something of a deadlock between Iran and the US Again. And this week, of course, President Trump will be traveling to Beijing to meet with President Xi Jinping. I'll start today's podcast by talking to my colleague Mike Rauber about what the markets are making. All of this. And as usual on a Monday, we'll take a look at the markets from a technical standpoint, paying attention to both oil and equity markets with our head of technical analysis Mensor Pochinsi. So let's get started. Good morning, Mike and thanks for joining me here today.

[B]

Good morning, Bernadette.

[A]

The S&P 500 rose 0.8% on Friday to a fresh record, extending its winning streak to six weeks. The rally has been underpinned by strong earnings with 82% of companies beating Q1 estimates on Friday.

[B]

Support also came from solid U.S. labor data. Non farm payrolls rose 115,000. Now that's nearly twice forecasts and marking the first back to back gains in almost a year. The figures signal a stabilizing labor market and alongside oil driven inflation have pushed markets to rule out rate cuts. This year that strength was tempered by a sharp drop in the University of Michigan consumer sentiment to a record low of 48.2 driven by higher gasoline prices.

[A]

And driving much of the advance in U.S. equities in recent weeks have been technology and in particular semiconductor stocks. And so again on Friday, The Nasdaq gained 2.3%.

[B]

The move was led by intel which jumped 14% after the Wall Street Journal reported that it struck a preliminary chip supply deal with Apple. The news lifted other semiconductor stocks including micron which gained 15%.

[A]

And Asian markets were firmly risk on last week. Mike, with the Nikkei breaking 62,000 for the first time and South Korea hitting a record high on strong semiconductor exposure. What's the story today?

[B]

That market is up another 4% today, taking gains to 86% for the year. Now in Japan, the main indices are flat, but stock moves stand out. Nintendo is down 9% after warning on lower margins due to higher chip costs, While Sony is up 10% after announcing a joint venture with Taiwan's TSMC and forecasting stronger full year profits.

[A]

Okay, this week we're going to be getting inflation data from Amongst others the U.S. germany, India and Japan. And today we've already had China's numbers, haven't we?

[B]

China's producer prices rose 2.8% year on year in April, now the fastest pace since the pandemic. While consumer inflation unexpectedly also climbed 1.2%. Analysts had expected a rise of only 1%. And over the weekend, China's trade data point to strengthening external demand. Export jumped 40%, 14%, but also imports rose more than 25%. Now one can say strong figures considering the geopolitical and logistical disruptions.

[A]

And in Europe, the tone was more cautious last week. But the Euro Stoxx 50 still ended the week up 1 1/2 percent. We saw German defence contractor Rheinmetall plunging 7% on disappointing Q1 results.

[B]

Yes. So European equity markets finished broadly lower on Friday after US President Donald Trump threatened much higher tarif against the EU if no final agreement is reached. Although this week the focus of the US administration is likely to be on Asia.

[A]

And Why is that?

[B]

U.S. treasury Secretary Scott Bessant begins a three day visit to Japan. So that's starting today with attention on the weak yen and potential US support for currency intervention. And US President Trump will travel to Beijing to meet President Xi, highlighting relations between the two leading geopolitical and artificial intelligence superpowers. Now staying with geopolitics. Today is the final day of the three day ceasefire in the Russia, Ukraine war. In the uk the government will present its new legislative agenda in the King's speech on Wednesday, which is receiving extra focus after Labour's election defeat last week. And the week ends with a leadership change at the Federal Reserve as Jay Powell's term concludes and Kevin Ward is expected to take over as chair. We'll have an important Senate vote later today on that.

[A]

Ok, we've already mentioned inflation data releases this week, but what should we be expecting on the corporate side?

[B]

Mike, we're still in the earnings season. Companies reporting include Munich, Re Alibaba, Allianz, Cisco, Siemens and Zurich Insurance. Now the IPO pipeline is also picking up in AI chip maker and Nvidia competitor Cerebra System is set to list in New York this week. Reuters reports Cerebras lifted its IPO price rate from $125 to $160 per share, which it will announce later today. Now, clearly the music is playing in semiconductors right now and I see from

[A]

the screens that European and US equity futures are seen opening flat despite President Trump and Iran rejecting the latest peace proposals to end the conflict.

[B]

Yes, you mentioned at the outset Equity futures do not seem to be too faced by oil marching higher this morning. Brent oil is up over 4%, $205 per barrel. And in other asset classes, gold is down nearly 1%. And the US dollar is starting the week little changed. That's all from me.

[A]

Thank you very much for bringing us a great roundup this morning, Mike.

[B]

Thank you very much for having me, Bernadette.

[A]

Okay, so now it's time to look at markets from a technical perspective. Good morning to you, Mensor.

[C]

Good morning, Bernadette.

[A]

So Mike alluded to it, oil remaining on a roller coaster. What's your view on oil and also oil and gas stocks?

[C]

Yes. So when we look at oil, we think we are here in a topping process. Probably we have seen the highs and oil will not go again above $120. What are the key levels on the downside here we identify US$92. So if US$92 breaks on a closing basis, ideally for two consecutive days, we would probably have to conclude that the peak is in for oil prices and then the target would be around 75, 72 US dollars. Because please remember or you already know as investors that the up move in oil prices was very swift and short. So this means on the downside there is not much support. Interestingly, the oil and gas stocks themselves, they have already peaked, so they peaked already on the 27th of March. And on a relative basis they have seen now a massive underperformance since then. They have underperformed the market in relative terms by 23% since then. And interestingly, they are on a relative basis now lower than the day before the conflict started. So indicating that even if you had perfect foresight for the conflict to start and one day before the conflict started, you would have overweighted oil gas stocks. Today you would be underperforming by about 5 to 7%. The S&P 500.

[A]

Interesting. And also if we take a look at the US Dollar that's remaining in its trading range from last summer. So when will that range end?

[C]

Yes, this is very interesting as well. So very surprising for many investors that we have a war, a spike in oil prices and that the US Dollar is not acting as a safe haven. We think time is running out and probably with the decline in oil prices, the US Dollar will attempt to fall to new lows here below the lows of January. When we look at the US Dollar, it is especially weak against the Swiss franc and emerging market currencies. So therefore we still recommend investors to be short the US Dollar across the board, especially against the Swiss franc and emerging market currencies, which still offer some quite interesting high interest rates, which of course help investors boost their returns.

[A]

And lastly, and Mike alluded to it already, semiconductor stocks are on fire. Are they entering a bubble territory?

[C]

Yes, I think this is the question in everyone's mind. I think it's very interesting to see again that the leading indicator or the leading sector usually is the first one to make a new high even in a crisis. And looking at prices, one could come to the conclusion that it is a bubble. We think it's not a bubble. So we have several indicators which indicate to us that this advances come as a surprise. So you know or you have seen in the past few weeks and months, many investors have tried to bottom fish in software stocks and have been rather cautious on semiconductors. First of all, then nevertheless, if we look ahead and think, yes, what would need to happen that semiconductors enter a bubble here some calculations point to maybe another six months of steady gains. So the worst case for semiconductors in order to complete a bubble or go into bubble territory would be if there is another six months of steady gains in the range of 30 to 50%. And the best case to to avoid a bubble is basically a correction. So let's say if in the next three to six months semiconductors go into consolidation or have a correction of 10 to 15%, this would delay the bubble risk. But for now we recommend investors to stay invested semiconductors and wherever you look, it's basically semiconductors that are driving the gains. It's in the US it's in emerging markets and even in small caps in the US it's semiconductors which are driving this rally and everything else is quite muted.

[A]

Interesting. You've given us lots of food for thought today. Thank you very much for joining the podcast today. Mensour.

[C]

Happy to be here. Thank you, Bernard.

[A]

Well, that brings us to the end of today's show. I hope that you enjoyed it. Thanks again to my guests. Please do come back and join me again tomorrow when I'll be here with more of our experts to keep you in the loop on what's moving markets. Meanwhile, good luck today and in the week ahead and goodbye for now.

[D]

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