Stop the presses: As of noon on Friday in the US, red-hot semis were on track for a losing week.
In the event the SOX notched a weekly loss, it’d be the first in five years. I’m kidding, obviously, but it has been a while. Since March, actually.
And do note: The index rallied 10 weeks in a row from mid-December to February before it rallied eight weeks in nine through early-May.
From December 16 through Thursday, the SOX rose 80%, gaining in 18 of 21 weeks. And in 20 of 24 going back to Thanksgiving, now that you mention it.
That’s a helluva run, and on one metric, it puts the semi rally very nearly in a class by itself.
The figure above shows you the SOX’s premium to its 200-day moving average. At the close on Thursday, that premium was an insane 61.14%.
As alluded to above, there’s no precedent for that. Or not really, anyway, according to BofA’s Michael Hartnett.
In his latest, Hartnett compared the SOX surge to historical overshoots. The figure below’s constructed using data from his piece.
The SOX rally’s “comparable only to the French market at the peak of the Mississippi bubble,” Hartnett wrote.
I won’t pretend to have conducted a systematic analysis of every conceivable instance where a publicly-traded security or equity index might’ve overshot to this degree on this metric. Nor will I pretend to have fact-checked the Mississippi Co. figures.
The point here isn’t whether Hartnett’s implicit claim — i.e., that the SOX in 2026 counts, on one measure at least, as modern history’s largest bubble — is accurate on a strict definition of the term.
Rather, the point is simply to give you some context for “the exponential price action,” in chip stocks, as Hartnett put it.
That’s quite fascinating actually. Anyone have any good book recommendations on the Mississippi bubble? I’ve read quite a bit about the latter half of that century, but don’t know anything about the Mississippi bubble.
I asked Gemini, it listed several books.
I prefer the human-to-human connection you can only get via internet comment sections.
Anyone else want comment notifications?!
Yes please.
Of course such a table depends on what qualifies for entry. The Compagnie du Mississippi (copied from Wikipedia, I don’t speak French) was just one company after all, whereas there have been plenty of stocks staging obscene rallies after that obviously. In favor of the interpretation of Hartnett, one might note that the Mississippi Co represented an outsized share of the stock universe of its time. For instance, the trading of shares around the peak valuation around 10 000 livres per share, corresponding to a modern market cap of around $6.5 trillion, caused French inflation in January 1720 to soar to 23% annualized. I suppose one might call that a 300 year old example of the “wealth effect”.
It’s good to see your chart game continue to evolve. I really like the formatting on the second chart here, it tells a story on its own.
Interring to see the chart of the bubble and how they seem to increase from the late 1980’s onward ( Oh Ronnie Reagan what have you done)…
Off topic – scurrilous reports from the China trip had Eric Trump walking the main square in Beijing with a sign saying ” open for bribes”… Actually come to think of it , why else would he be on that trip
Interesting to see