This weekly newsletter pulls together summaries of the top ten most-read Insights across Macro and Cross Asset Strategy on Smartkarma.
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1. SK Hynix: The Leveraged ETF Tail Is About to Wag the Dog
- SK Hynix (SKHY US) ADR was introduced amid heavy media and analyst hype, underpinned by unquestioned management claims.
- SK Hynix-leveraged ETFs have skyrocketed and now trade at a higher nominal turnover than the underlying stock, dramatically increasing SK Hynix’s volatility in 2026.
- This precarious and unprecedented setup results in single-stock ETFs controlling the fate of SK Hynix as they buy and sell to adjust their exposure at the end of each day.
2. Sentiment Matters: Buy-Side Sentiment Tracker – July 2026
- Views from 50 top asset managers across 73 assets, based on 1,400+ individual views.
- Grinding more bullish: Buy-side sentiment continued to rise in July. The broader message is one of underlying bullishness, but difficult to describe positioning as extreme.
- Max contrarian: The buy side is most bullish on Infrastructure, Industrial Metals and Tech. It is most bearish on Consumer Staples, Real Estate and CHF.
3. US: Disinflation Flipped The V
- A 0.7pp drop in US CPI inflation to 3.5% went 0.3pp further than the consensus forecast to deliver an inverted V-shaped recovery from US energy prices normalising.
- Weakness was broad-based, with the core services impulse falling by 0.2% m-o-m in an abrupt turn from May’s 0.55% surge. Unfortunately, this good news may be an outlier.
- Energy prices rebounded in July, but the US excess relative to the UK will fade swiftly, which would support our view that the BoE will tighten more than the Fed.
4. UK: Spurious GDP Strength Slowing
- UK GDP’s resilience has persisted to a slightly greater-than-usual extent in Q2, but it is slowing. We expect payback and revisions to deliver Q2 at 0.3% q-o-q, half Q1’s pace.
- May gained the greatest support from seasonal adjustment factors in a decade, besides the pandemic years, further raising the risk of revisions to slightly less spurious norms.
- Slowing in the next two releases should not be sufficient to block a September BoE rate hike amid persistently excessive inflation, but we still see that as a one-and-done move.
5. KOSPI: Don’t Underestimate Korea’s Ability to Blow Up Its Market!
- Korea experienced a leveraged “melt-up” in its market in 2002. Then, margin debt ballooned to historic levels. This time, leverage is further amplified by single-stock ETFs.
- Technical analysis points to further pressure on the market as this massive leverage is unwound. Korean retail investors stand to have substantial losses from the leveraged ETFs launched in May.
- The Financial Services Commission has just rolled out a number of measures, including an immediate ban on new single-stock ETFs and increases in margin requirements, starting in August.
6. TSMC: The Next Semi Stock to Fall!
- TSMC delivered Q2 net income of NT$706.6 billion (+77%YoY), a record quarter that exceeded analysts’ consensus by ~13%. Management raised FY2026 revenue growth guidance to “slightly above 40%” (from >30%).
- TSMC shares have held up, even as semiconductor sector share prices have entered a bear market. Since June, the shares have moved higher with declining momentum, a negative technical signal.
- The bear case for TSMC is not a single catalyst — it is a confluence of weaker token expenditure for AI, margin compression, valuation de-rating, and demand concentration risk.
7. GOLD: The West Sells, the East and Central Banks Buy — Capitulation at a 28% Discount
- Our June call played out: the US$4,250–4,320 triangle floor broke and gold slid to US$3,993 yesterday, -28% from the January ATH, including June’s largest monthly drop since late 2008.
- Positioning reflects capitulation: North America recorded its weakest ETF H1 since 2013 while Asia achieved its strongest ever. Meanwhile, COMEX net longs rose 16% m/m as institutions bought retail selling.
- Maintain BULISH with TP of US$4,780. Accumulate US$3,700–4,000 in tranches. Catalysts this week: Chair Warsh’s first Congressional testimony (14 Jul) and June CPI.
8. Artificial Intelligence Adoption and Fed Policy Conduct: Multiple Forces in Play
- The idea that artificial intelligence (AI) adoption will raise the neutral policy rate (r*) due to higher productivity growth has gained acceptance amongst most central bankers.
- Rising uncertainty about labour displacement could increase precautionary savings that puts downward pressure on the neutral policy rate. Higher productivity will increase the US tax base and enhance fiscal sustainability.
- AI has produced inflationary pressures in technology segments. Under less guidance, perceived changes in the Fed’s policy reaction function could become more important than any single policy rate decision.
9. HEW: Discount Disinflationary Dip
- Ongoing attacks are accumulating a greater energy supply shock, renewing upside pressures on inflation and European policymakers more than the Fed.
- Disinflationary news in the US and EA June prints focuses on a concentrated soft patch from the temporary drop in energy prices, so this good news should be discounted.
- Next week’s ECB decision should sustain its hawkish bias without acting upon it again so soon. Meanwhile, it’s the UK’s turn to report its disinflationary blip from June.
10. Asian Equities: China’s Tepid Domestic Growth and Skyrocketing Exports Presents Interesting Options
- China’s disappointing April-June GDP growth underscores domestic consumption weakness. Exports continue to skyrocket. Export resilience in power and automobiles, along with higher overseas margins benefit companies with sustainable foreign revenues.
- In 2026, technology, industrials, energy have outperformed. The first two fit the theme of advanced manufacturing and technology-enablers. Combining this with robust overseas revenues, a set of stocks stand out.
- Among these stocks, CATL, Geely, Weichai Power and CNOOC figure in our Model Portfolio.
