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Market Correction Risk Rising As Midterm Madness Approaches | Lance Roberts

Adam Taggart | Thoughtful Money® Jul 17, 2026

Summary

Portfolio manager Lance Roberts sees a 5-10% correction into the autumn midterms as most likely, and his models are already buying puts.

Semiconductors up 300% this year are cooling, threatening margin calls, yet market breadth is quietly improving in energy, banks, and healthcare.

Gold miners are deeply oversold, but monthly charts suggest a parabolic spike still needs to work off, so favor strong individual names.

Iran tensions lifted WTI above $80, and the guest stays overweight natural gas and pipelines on a long-term power thesis.

Depreciation schedules and surging AI token costs could overstate hyperscaler earnings, so watch whether revenue growth keeps outrunning massive capex.

Adam Taggart's takeaways

  • Top takeaway Frames AI as the market's biggest driver at roughly 45% of the S&P 500 and argues the real task is tracking which risks could credibly derail the trade.
  • Presses Lance with Fred Hickey's AI-bear case: one-time stake gains inflating earnings, a coming depreciation wave that Hickey says lifts adjusted average P/Es to about 67, and an economic model he calls 'disintegrating'.
  • Relays Chamath Palihapitiya's account of token costs doubling every 45 days against roughly 5% productivity gains as a possible sign compute costs are outstripping AI revenue.
  • Keeps the weekly discipline of asking whether the semiconductor cooling is genuine trouble or just rotation, insisting each risk be tracked against the data.
  • Announces a channel break July 27-August 2, a post-return Fed panel with Tom Hoenig, Lacy Hunt and Judy Shelton, and an August Rubin Report appearance that could become a recurring monthly slot.

Melody Wright's takeaways

  • Top takeaway Adam says his housing-market update recorded with Melody Wright publishes the day after this video, covering a housing market under pressure with sharp regional differences.

Mike Green's takeaways

  • Top takeaway His recent post argues the soft CPI print was no surprise because shelter - the biggest component of the calculation - is disinflating.
  • Cited for the observation that about 44% of index weight sits in housing and shelter; Adam adds Houston houses going six months without a bid as supporting color.

Fred Hickey's takeaways

  • Top takeaway Adam relays Hickey's valuation argument that reported hyperscaler P/Es are misleading: adjust for one-time frontier-lab stake gains and a coming depreciation wave and the sector's average P/E is about 67.
  • Hickey believes the AI sector's economic model is 'disintegrating' because the industry still has not settled how it will actually make money from AI.
  • He remains bearish on AI stock valuations, expects a major correction, and is holding dry powder to buy the companies he wants once it happens.
  • He uses the Chamath token-cost story - costs doubling every 45 days against about 5% productivity gains - as representative of costs outstripping AI revenue across corporate America.
  • He warns that companies shifting to cheaper Chinese models would shrink the compute and data-center buildout the sector's revenue projections depend on.

Dave Rubin's takeaways

  • Top takeaway Adam describes recording a Rubin Report interview built purely around financial literacy, set to air in August after Rubin's sabbatical.
  • If the episode is received well, Adam may join the show about once a month as its finance contributor as Rubin leans into financial topics.