Cracks Starting To Show In The Market? | Lance Roberts

Adam Taggart | Thoughtful Money® Jul 25, 2026

Summary

A momentum sell signal and a broken trading range point to a short-lived 3-7% S&P correction, in the guest's view.

The guest argues earnings growth drives direction: positive EPS growth produced positive index returns 92% of the time.

Hyperscaler free cash flow - cash left after capital spending - dips to about $16 billion in 2026, then rebounds.

Power supply, not capital, is the binding constraint on AI data centers, per the guest, who holds gas pipelines for it.

Frequent retail traders trail buy-and-hold investors by an 848 basis point annual performance penalty, in his research.

Top takeaway His central worry, stated at the top of the show, is that the market is being driven at an almost unprecedented level by a single trade, so that trade should be watched closely because a stumble would be felt by everyone.
He says the risk he keeps flagging is that the AI capital spending schedule assumed in analysts' spreadsheets may not happen at the rate they expect, and points to permitted land, water, capacitors, turbines, memory and grid power as the real-world limits.
He wants a dedicated walk-through of the midstream companies the guest's firm favours, on the grounds that the guest only names them in passing, and he is open to a future episode covering them with the usual not-a-re recommendation caveat.
He proposes a later episode on the production-for-national-security trade, connecting it to defense names and to the companies rebuilding the grid and the data centre build-out.

Top takeaway According to the host, David Hay is not trying to scare people out of the market over AI trade concerns and instead points to previously unloved sectors, regional banks among them, starting to break out.
The host wants to bring him on after the current break to cover those green shoots elsewhere in the market.

Top takeaway Lacy Hunt called the host a day before this recording about a report he has just released, saying it is important enough that he wants the message out to a wider audience, which is why a bonus interview is scheduled.
He is booked to give the keynote at the Thoughtful Money fall online conference on 17 October 2026.

Top takeaway The host reports that Peter Tchir has been advocating what he calls the PROSec trade, production for national security, which places capital in the areas the government is trying to foster for security reasons and is removing regulations from.
The host wants to bring him on to develop the idea further, with defense names such as Raytheon and the grid and data centre rebuild as candidate expressions.

Top takeaway The guest frames the grid build-out argument as Michael Every's core view, a return to mercantilism in which governments deliberately put their thumb on the scale toward national priorities and are willing to starve parts of the economy they judge less important.

Top takeaway The guest credits Fred Hickey's point that part of hyperscaler earnings is one-time gains on investments such as the Anthropic and SpaceX stakes, and that adjusting them out makes the earnings much richer on a price to earnings basis than the headline multiple implies.
He says he is not dismissing Hickey's depreciation analysis, only that he disagrees it points to a cataclysmic downturn, and notes Hickey is booked to give an update at the fall conference.