MARKET WATCH
A sector rotation occurs when investors massively shift their capital from one sector (here tech/AI) to other sectors deemed more attractive (value, small-caps, Europe, metals). It signals a market regime change, often triggered by excessive valuations or a narrative shift. The current rotation is the most significant since 2001.
The week will be shortened by Presidents' Day on Monday. The FOMC minutes on Wednesday and Walmart earnings on Thursday will be the major catalysts, with flash PMIs on Friday providing the pulse of the real economy.
Presidents' Day — US Markets Closed
Eurogroup Meetings (EUR)
Empire State Mfg Index
Carvana (CVNA) earnings
Arista Networks (ANET)
Medtronic (MDT)
FOMC Minutes (14h EST)
Details from the January 28 meeting
Analog Devices (ADI)
Geneva: Ukraine-Russia Talks
Walmart (WMT) — BMO
Jobless Claims
Philly Fed Mfg Index
Alibaba (BABA)
Flash PMIs (US, EU, UK)
UoM Consumer Sentiment
Existing Home Sales
Deere & Co (DE)
January CPI fell to 2.4% YoY — the lowest since spring 2021 — but markets did not react positively. The S&P 500 (6,836) and Nasdaq (22,547) ended the week lower despite favorable inflation, weighed down by the Magnificent Seven dislocation and AI disruption fears. Gold surged to $5,046 (+1.98%). The VIX rose to 20.6 ("elevated" regime). Bitcoin remains fragile at $69,882, down 44% from its ATH.
Inflation falls to a 5-year low (CPI 2.4%), which should be bullish for equities (rates could decline). Yet markets are falling. Why? Because the market is dominated by AI disruption fear: investors worry that artificial intelligence will destroy the business models of SaaS companies, logistics, and commercial real estate. This is a fundamental narrative shift.
Our previous report ("NFP & CPI: The Week That Will Decide 2026") anticipated a pivot week around CPI. Here is the review of our forecasts.
| Forecast | Outcome | Status |
|---|---|---|
| CPI to determine direction | CPI 2.4% (below 2.5% consensus) — inflation declining | VALIDATED |
| Dow 50K as intermediate top | Dow crossed 50K then fell back below $49,600 | VALIDATED |
| Nasdaq under pressure (CTA selling) | Nasdaq -2.2% for the week, $1,500B lost YTD | VALIDATED |
| Rotation into small-caps | Russell 2000 outperforms (+1.3% vs Nasdaq -2.2%) | VALIDATED |
| Gold tests $5,000 | Gold reclaims $5,000 after CPI | VALIDATED |
| Bitcoin fragile | BTC range $65K-$70K, no significant rebound | VALIDATED |
Validation score: 6/6 — The rotation + declining inflation scenario materialized exactly as anticipated. The divergence between favorable inflation and declining equity markets confirms that the main driver is no longer the Fed but AI disruption.
January CPI fell to 2.4% YoY (vs 2.5% expected and 2.7% in December). Core CPI held at 0.3% MoM, in line with consensus. This is the lowest inflation level since spring 2021 — a clear signal that restrictive monetary policy is working.
Despite this, markets barely reacted: Treasury yields fell ~5 bps on the 2-year and 10-year, but equity indices ended the week negative. Over 50% of traders now expect a 25 bps cut by June, but the majority of bets remain on two cuts maximum in 2026.
Minutes from the January 28 meeting will be scrutinized to understand the degree of division within the FOMC. The Fed held rates at 3.50%-3.75% after three cuts in 2025. The December dot plot suggests only one additional cut in 2026. Prediction markets give a 50% probability of a cut by June and only 15% probability of recession.
The week was marked by a violent rotation out of tech. The seven giants (Magnificent Seven) all ended lower on Thursday, with Amazon and Microsoft officially in bear market (-20% from their highs). The S&P North American Technology Software Index has plunged nearly 24% since end of 2025 — the "SaaSpocalypse".
| Index | Close 02/13 | Day Chg | Week Chg | YTD | Signal |
|---|---|---|---|---|---|
| S&P 500 | 6,836 | +0.05% | -1.0% | ~-0.2% | Pressure |
| Nasdaq Comp. | 22,547 | -0.22% | -2.2% | ~-2.8% | Bear Signal |
| Dow Jones | 49,501 | +0.10% | -0.8% | ~+3.2% | 50K lost |
| Russell 2000 | 2,647 | +1.18% | +1.3% | ~+5.9% | Leader |
| VIX | 20.60 | Elevated regime — zone de prudence | Alert | ||
Investors are realizing that AI (autonomous agents like Claude Code, Devin, etc.) can replace entire categories of SaaS software. Salesforce (-28% YTD), Workday (-22%), and dozens of others are in freefall. Capital is fleeing to the physical beneficiaries of AI: energy suppliers (copper, power grids), hardware, and data centers. Freeport-McMoRan and BHP Group are benefiting from copper's rise toward $15,000/tonne.
While Wall Street suffers under the weight of the Magnificent Seven in bear market, all developed markets outside the US are on fire. The decoupling is the most significant since the dot-com crisis of 2001. Europe, Asia, and emerging markets are massively outperforming the Nasdaq, with South Korea just hitting a new 52-week high.
The iShares MSCI South Korea ETF (EWY) hit $134.32 on February 13 — its year high. From its low at $48.49, that is a +176% gain. Samsung, SK Hynix, and the Korean semiconductor supply chain are benefiting from global AI demand. This is the most bullish signal in Asia right now.
| Market | ETF | Price | Day Chg | Vs 52W High | Signal |
|---|---|---|---|---|---|
| Europe (EAFE) | EFA | $104.24 | +0.6% | -1.0% | Near ATH |
| Emerging Mkts | EEM | $61.12 | +0.4% | -1.3% | Strong |
| Chine | FXI | $38.33 | -0.9% | -8.7% | Neutral |
| Country | ETF | Price | Day Chg | 52W High | Gap | P/E | Signal |
|---|---|---|---|---|---|---|---|
| Germany | EWG | $43.97 | +0.02% | $44.62 | -1.5% | 18.7x | EU Leader |
| United Kingdom | EWU | $47.25 | +0.51% | $47.52 | -0.6% | 20.8x | Near ATH |
| France | EWQ | $46.70 | +0.04% | $47.23 | -1.1% | 19.9x | Strong |
European catalysts: Defense is leading the rally (Thales +4.2%, Safran +2.1%, Dassault Aviation surging) driven by NATO military budgets. All 3 European ETFs are trading within 1.5% of their all-time highs — a remarkable signal of strength while the Nasdaq loses $1,500B.
| Country | ETF | Price | Day Chg | 52W High | Gap | P/E | Signal |
|---|---|---|---|---|---|---|---|
| South Korea | EWY | $133.97 | +2.42% | $134.32 | ATH! | 20.0x | 52W HIGH |
| Japan | EWJ | $93.85 | +0.51% | $94.28 | -0.5% | 19.3x | Near ATH |
| Taiwan | EWT | $73.05 | +0.68% | $73.88 | -1.1% | 22.8x | Strong |
| Hong Kong | EWH | $23.15 | -0.77% | $23.85 | -2.9% | 19.9x | Consolidation |
| Inde | INDA | $52.89 | -0.41% | $56.01 | -5.6% | 24.3x | Correction |
| Australia | EWA | $29.16 | +0.21% | $29.58 | -1.4% | 22.8x | Strong |
| Country | ETF | Price | Day Chg | 52W High | P/E | Signal |
|---|---|---|---|---|---|---|
| Brazil | EWZ | $38.06 | -1.12% | $39.45 | 12.9x | Value |
| Inde | INDA | $52.89 | -0.41% | $56.01 | 24.3x | Under Pressure |
1. Rotation out of US: Capital is fleeing overvalued Magnificent Seven toward markets with reasonable valuations (P/E 13-20x vs 25-35x for Nasdaq).
2. Asian semiconductors: Samsung, SK Hynix (Korea), TSMC (Taiwan) are benefiting from AI demand without the excessive capex of US giants.
3. European defense: Rising NATO budgets (Ukraine-Russia context) benefit Thales, Safran, BAE Systems, Rheinmetall.
4. Brazil value play: At just 12.9x earnings, Brazil is the cheapest market in our table — a natural value haven.
5. India: the only weak spot — INDA is -5.6% from its high, affected by margin pressure on Indian IT giants (TCS, Infosys) linked to AI disruption.
China is deploying a "National Team" of state investors to cool AI speculation on its markets. Hong Kong (EWH) is consolidating at -2.9% from highs, which remains a moderate correction after the DeepSeek rally.
Treasury yields pulled back after the favorable CPI. TLT (20Y+ bonds) gained +0.55% to $89.72. Bond markets are validating the disinflationary scenario, creating a divergence with tech stocks, which are being sold for structural reasons (AI disruption) rather than monetary ones.
| Maturity | Yield | Day Chg | Signal |
|---|---|---|---|
| 13 Weeks | 3.593% | -0.5 bps | Stable |
| 5 Years | 3.609% | -5.9 bps | Declining |
| 10 Years | 4.056% | -4.8 bps | 4% pivot in sight |
| 30 Years | 4.698% | -3.3 bps | Curve flattening |
| EUR/USD | 1.1871 | flat | Dollar steady (DXY 96.88) |
| Asset | Price | Day Chg | Note |
|---|---|---|---|
| WTI Crude | $62.89 | +0.08% | Stable, Venezuelan sales > $1B |
| Brent Crude | $67.75 | +0.34% | Spread WTI-Brent $4.86 |
| Natural Gas | $3.24 | +0.81% | Winter demand |
| Copper | $5.80/lb | +0.30% | AI data center demand (FCX, BHP winners) |
| Uranium | Rising | + | Standard Uranium launches Corvo program |
After the historic late-January crash (-11% for gold, -31% for silver), precious metals have begun a spectacular recovery. Gold surged 6% in a single session — the strongest daily gain in nearly 20 years — to reclaim $5,000. Goldman Sachs announced that "hard assets" are entering a "scarcity phase".
| Institution | Gold Target 2026 | Note |
|---|---|---|
| JPMorgan | $6,300 | Most aggressive forecast |
| Deutsche Bank | $6,000 | "Achievable this year" |
| Goldman Sachs | $5,400 | Hard assets scarcity phase |
| Bank of America | $6,000 | "Loss of confidence in traditional investments" |
Central bank demand: 585 tonnes purchased per quarter in 2026 (record). 95% of central banks plan to increase their reserves within 12 months. Geopolitics: Venezuela, Ukraine-Russia, China-Taiwan tensions, Greenland. De-dollarization: BRICS+ countries are accelerating gold purchases as an alternative to the dollar. Gold is the "thermometer of geopolitical distrust".
Silver remains the most volatile metal. The January crash (-31% in a single session) was caused by a CME margin increase from 11% to 15%, triggering cascading forced liquidations. The market is stabilizing around $100-105, but the recovery is fragile. The physical silver deficit enters its 6th consecutive year — fundamentals remain intact despite extreme volatility.
Bitcoin is in an official bear market, down 44% from its ATH of $126,198 reached in October 2025. Ethereum is suffering even more (-58% from ATH). Stablecoins have lost $14 billion in market cap since December, including $7 billion in a single week — a clear sign of capital flight.
Basis trades (spot ETF + short futures) now yield only 5% vs 17% before. Hedge funds are unwinding massively.
-$14B since December. Tether and USDC are losing market cap — money is leaving the crypto ecosystem.
US tech stock weakness is contaminating crypto. Miners pivoting to AI must sell their BTC.
The Clarity Act (crypto regulation) is stalled in Congress. Markets hate uncertainty.
Bitcoin briefly hit $60,074 on February 6 (its 52-week low). If this support breaks, the next technical level is $55,000. The current bounce to $69,900 remains fragile — volumes are weak and sentiment is negative. A break below $60K could trigger a liquidation cascade estimated at $3-5B.
Last week's results showed a paradox: companies are beating estimates but are being sold off due to excessive AI spending. Amazon and Microsoft fell despite solid results, penalized for AI capex deemed "out of control" ($200B for Amazon, $37.5B for Microsoft in one quarter). This week, attention shifts to Walmart and Alibaba.
| Date | Company | Ticker | Consensus EPS | Key Issue |
|---|---|---|---|---|
| Mar 17 | Carvana | CVNA | Growth expected | Auto consumer barometer |
| Mar 17 | Arista Networks | ANET | — | AI network infrastructure |
| Mar 17 | Medtronic | MDT | — | Healthcare / Medical AI |
| Mer 18 | Analog Devices | ADI | — | Analog semiconductors |
| Jeu 19 | Walmart | WMT | $0.73 (+10.6% YoY) | Consumer barometer #1 |
| Jeu 19 | Alibaba | BABA | — | China + AI indicator |
| Ven 20 | Deere & Co | DE | — | Agriculture / Industrial cycle |
Walmart is the largest private employer in the world and the best indicator of American consumer health. Its Q3 results were solid: $179.5B revenue (+5.9% YoY), e-commerce +27%, EPS of $0.62 (3.33% beat). Analysts expect $190.35B in Q4 revenue. With 32 Buy and 2 Hold ratings, consensus is massively bullish with an average PT of $127.19. A Walmart miss would be a recession signal.
Week after: NVIDIA (NVDA) reports Wednesday February 25 — THE catalyst that could either stabilize or collapse the tech sector.
The geopolitical landscape remains extremely charged with three major theaters active simultaneously. These tensions support gold, disrupt supply chains, and create tail risks that are difficult to hedge.
After the Abu Dhabi talks (February 4-5), a new round of US-Ukraine-Russia negotiations is scheduled in Geneva this week. Progress is modest but real:
Market impact: A ceasefire would reduce the geopolitical premium on energy and gold, but could boost European markets that are already pricing in progressive normalization.
Interim president Delcy Rodriguez announces an amnesty law and closure of Helicoide prison. 17 political prisoners released, but the prosecutor requested Guanipa's arrest 12 hours after his release. Venezuelan oil sales exceed $1B since Maduro's capture. Prisoners' families begin a hunger strike.
Impact: Oil supply stabilization but persistent political instability risk.
Trump imposed an additional 10% tariffs on China on February 1 (on top of existing ~145% tariffs). China retaliated with 15% on coal and LNG, 10% on oil and agricultural machinery. Meanwhile, the November 2025 tariff reduction agreement has been extended through November 2026. The average US tariff rate reaches 13.5% — the highest since 1946.
Impact: Auto CEOs warn of the "existential threat" of Chinese competition.
We are witnessing the most significant sector rotation since the dot-com bubble burst in 2001. Capital is massively fleeing tech/AI toward the real economy, small-caps, and international markets. This movement is structural and could last for quarters.
Our auto-screener detects an "Early Risk-Off" regime — volatility is rising (VIX score 1.0), the dollar is strengthening (DXY score 1.0), credit is tightening (score 1.0), while SPX is partially holding (score 0.63). This regime favors defensive strategies: pre-squeeze (weight 0.35) and short squeeze (weight 0.40), with risk tolerance lowered to 0.30.
| FSLY (Fastly) | +113% | CDN / Edge Computing |
| CGNX (Cognex) | +39% | Machine Vision |
| MGA (Magna Intl) | +27% | Auto Parts / Value |
| ACHC (Acadia Healthcare) | +25% | Behavioral Health |
| EGO (Eldorado Gold) | +21% | Gold Miner |
| KD (Kyndryl) | -48% | IT Services / IBM Spin-off |
| ICLR (ICON PLC) | -38% | CRO / Pharma Services |
| CLF (Cleveland-Cliffs) | -30% | Steel / Tariffs |
| HIMS (Hims & Hers) | -29% | Telehealth |
| MNDY (Monday.com) | -26% | SaaS / SaaSpocalypse |
| Sector | 5D Perf. | 21D Perf. | Flows | Signal |
|---|---|---|---|---|
| Utilities | +3% | +5% | Massive inflows | Defensive leader |
| Materials | +2% | +4% | Inflows | Copper + Gold |
| Financials | +2% | +3% | Inflows | Regional Banks |
| Industrials | +1% | +2% | Stable | Infrastructure |
| Consumer Disc. | -1% | -3% | Outflows | AMZN pèse |
| Tech / Software | -2% | -6% | Massive outflows | SaaSpocalypse |
| Salesforce (CRM) | -28% YTD |
| Workday (WDAY) | -22% YTD |
| Software Index | -24% from peak |
| Amazon (AMZN) | -13.5% YTD / Bear |
| Microsoft (MSFT) | Bear Market (-20%) |
| Nasdaq Composite | -$1,500 Md en 2026 |
| Small-cap Value | +5.94% YTD |
| Small-cap Growth | +6.02% YTD |
| Europe (EFA) | Near ATH |
| Corée du Sud (EWY) | +176% from 52W Low! |
| Aéro/Défense (XAR) | +54% over 1 year |
| Or (GLD) | +11% from crash |
1. Extreme valuations: The Mag 7 represent 34.3% of the S&P 500, an unprecedented concentration level. The Shiller CAPE at 40+ and the Buffett Indicator at 220%+ signal a historic excess.
2. Disruption of the disruptors: AI is not just destroying jobs — it is destroying the SaaS companies that were supposed to disrupt the traditional economy. An ironic reversal.
3. Capex without visible returns: Amazon announces $200B in 2026 capex, Microsoft $37.5B per quarter. Investors demand returns and are not seeing them yet.
4. Early Risk-Off regime: Our screener detects a shift toward a cautious regime. VIX at 20.6, DXY rising, and credit spreads tightening confirm that institutions are reducing risk.
Here is the assessment of key risks for the coming week. The matrix integrates probability of occurrence and potential market impact.
AMZN and MSFT in bear market. If NVDA disappoints on 02/25, the entire tech sector could lose an additional 10-15%. The S&P 500 is hostage to these 7 stocks (34% of the index).
Probability: 40% | Impact: Very High
BTC at $69,900 but the $60K support has been tested. A break would trigger $3-5B in forced liquidations and contagion effects on miners and crypto ETFs.
Probability: 30% | Impact: High
If the minutes reveal more division than expected on the rate path, the market could reprice toward zero cuts in 2026, impacting bonds and growth stocks.
Probability: 25% | Impact: Medium-High
The average US tariff rate is at its highest since 1946. Further escalation could disrupt tech supply chains and push inflation back up.
Probability: 20% | Impact: Medium
A Walmart miss on Thursday would signal weakening of the American consumer — the last pillar of US growth. Major psychological impact on sentiment.
Probability: 15% | Impact: Medium-High
Significant progress in Ukraine-Russia negotiations would be bullish for Europe, energy, and would reduce the geopolitical premium on gold.
Probability: 10% | Impact: Positive High
Motley Fool headlines a "confidence crisis" toward the Fed. The S&P 500 has gained 16%+ three consecutive years — an event that has occurred only 3 times in 98 years. Statistically, a mean reversion is imminent.
Natixis survey: 74% of institutional money managers expect a major correction in 2026. Reasons: tech bubble, geopolitics, macro factors. The bearish consensus is rarely this unanimous.
The "SaaSpocalypse" could extend beyond software: logistics, commercial real estate, and transportation are the next sectors threatened by AI disruption. IBD headlines "dangerous market".
In an environment of sector rotation, declining inflation, and elevated geopolitical risk, we recommend a defensive allocation with overweight in real assets and international markets.
| Asset Class | Weight | Chg vs W-1 | Rationale |
|---|---|---|---|
| Cash / Money Market | 30% | -7% | Reduced to deploy toward metals and value |
| Precious Metals (Gold + Silver) | 18% | +8% | Gold > $5K, JPM target $6,300, geopolitical hedge |
| Value / Dividendes US | 15% | = | Beneficiary of rotation out of tech |
| Europe / International | 12% | +4% | EFA near ATH, Asia +12% YTD |
| Small-Caps US | 10% | +5% | Russell +5.9% YTD, favorable rotation |
| Hedges (VIX, Puts) | 8% | = | Tail risk protection |
| Energy | 5% | = | Oil stable, copper rising |
| Crypto | 2% | -3% | Bear market confirmed, minimum allocation |
Metals up (+8%): Goldman announces the "scarcity phase" of hard assets. Gold above $5K with $6,000-6,300 targets justifies an overweight.
Europe/Intl up (+4%) and Small-Caps (+5%): The rotation is confirmed and accelerating. Asia is outperforming the Nasdaq by 15 points in 2026.
Cash down (-7%): Redeployed toward rotation winners.
Crypto down (-3%): Bear market confirmed, no visible bullish catalyst.
3 long swing positions aligned with the ongoing sector rotation. Each trade is supported by macro, technicals, and an identified catalyst. Recommended sizing: 3-5% of portfolio per trade.
Gold above $5,000 with institutional targets at $6,000-6,300 (JPMorgan, Deutsche Bank). NEM is the world's largest gold miner — MCap $138B, PE 19.5x, 0.8% dividend. The stock has gained +47% since August, with the 50d SMA at $109 acting as solid dynamic support. BUY signal from AmericanBulls on February 9, confirmed by Friday's breakout (+6.5%).
Catalysts: Dovish FOMC minutes (Wed) = USD down = gold up. Walmart miss (Thu) = risk-off = gold up. Geneva tensions = gold as safe haven. R/R: 1:1.7 (risk $16, gain $24 on TP2).
The Great Rotation into Europe is confirmed. EWG (Germany) at $43.97, near 52W high ($44.62). The DAX is outperforming the Nasdaq by +15 points in 2026. Europe benefits from: reasonable valuations (PE 18.6x vs 25x US), declining energy costs, accommodative ECB policy, and institutional flow rotation. BUY signal from AmericanBulls on January 22 — in uptrend since.
Catalysts: Geneva progress (Wed) = Europe up. Euro decline = German exporters winning. ETF flows into Europe accelerating. R/R: 1:2.5 (risk $1.50, gain $4 on TP2).
The mega-cap to small-cap rotation is the trade of 2026. IWM (Russell 2000) at $263, +6% YTD vs Nasdaq -8%. Small-caps benefit from: declining CPI (rate sensitive), stable dollar, domestic capex, and outflows from Mag 7. The IWM/QQQ ratio is in a multi-month breakout. BUY signal from AmericanBulls on February 6 — uptrend confirmed, 50d SMA ($257) as support.
Catalysts: Declining CPI = dovish Fed = small-caps up. Neutral FOMC minutes = scenario confirmation. Improving small-cap earnings. R/R: 1:2.5 (risk $13, gain $27 on TP2).
These 3 trades share a common thesis: the Great Rotation of 2026 from tech mega-caps toward real assets (gold), international (Europe), and small-caps. This movement is supported by massive institutional flows and a structural regime change. Stops are placed below the 50-day SMAs — as long as this level holds, the trend remains intact.
Macro
Earnings
Géopolitique
Key Levels
This report uses exclusively real-time market data and verified sources. All figures are current as of February 14, 2026.
Disclaimer: This report is provided for informational purposes only. It does not constitute investment advice. Past performance does not guarantee future results. Consult a licensed financial advisor before making any investment decision.