Mark Newton — 8,000 on the S&P, but not in a straight line

Newton thinks the US stock market ends 2026 higher — his target is 8,000 on the S&P against roughly 7,800 when he spoke — but he is unusually specific that the ride there is bumpy and the next eight weeks are a bad time to buy. "I don't suspect that we can get up above 7,900 right away."

His reason is a split between two clocks. On a weekly chart the market is only just becoming "overbought" (a momentum gauge called RSI, which measures how far and fast a price has run relative to its own recent history — high readings mean a rest is due). On a daily chart it is already stretched. So the bigger trend is intact while the short-term one needs a pause. Add three specific pressures he expects — oil back to $100, the 10-year Treasury yield creeping toward 5%, and technology bumping into its old highs — and you get "backing and filling" rather than a melt-up.

The actionable part is the calendar. Third quarters of midterm-election years are historically choppy, and he expects a pullback from October into November that is "probably going to be one of the better buying opportunities we've seen throughout the entire 4-year cycle." In other words: bullish, patient, with cash reserved for autumn.

The Nasdaq is back near its June record highs, and Newton has "no near-term concerns" — but those old highs (about 27,100 on the composite, 30,700 on the Nasdaq 100) act as a ceiling, because everyone who bought at the peak and sat through the decline now has a chance to get out even. That supply of sellers is what technicians mean by "resistance," and he expects it to stall the current rally.

What makes him constructive underneath is how tech fell. It didn't crash all at once; it came apart in sequence — software first (late last year), then semiconductor equipment, then memory chips last. Each group has now bottomed and turned up in the same order. A staggered decline that repairs group by group is a healthy market working through a problem, not a bubble bursting.

His instruction is therefore not "buy now" but "buy dips when they happen" — the same October–November window he flags for the broad market.

Healthcare has spent nearly three years losing ground to the rest of the market — hurt by political pressure on drug prices and by the rollback of Affordable Care Act subsidies, which squeezed insurers and providers. Newton's signal is not that the sector has bottomed in absolute terms; it is that it has stopped underperforming. He watches the ratio of healthcare to the S&P 500, and that ratio has "broken out above almost a three-year downtrend."

Why the relative measure matters: a sector can rise in a rising market and still be a bad place to have your money. When the ratio turns, it means new money is actually rotating in, which is what sustains a move rather than a one-week bounce.

The confirming detail is breadth within the sector — the strength runs across biotechnology (drug discovery companies), pharmaceuticals (the large established drugmakers) and HMOs (health insurers). Three very different business models moving together points to money flowing into the sector as a whole, not to one company's good news.

This is Newton's clearest overweight, and it rests on one mechanism: the shape of the yield curve. Banks make money by borrowing short-term (deposits, on which they pay little) and lending long-term (mortgages, corporate loans, at higher rates). The gap between those two rates is their profit margin — "net interest margin."

Right now that gap is widening. Fed Chair Warsh has stopped giving "forward guidance" — advance signals about future policy — which pins short-term rates in place, while long-term yields drift up on stronger growth and higher oil. Short rates anchored, long rates rising: the curve "steepens," and bank margins widen mechanically. Newton points at 2013's taper tantrum and the months after the 2016 election as the same setup producing the same result.

The extra nuance he adds is important: the steepening is partly driven by better growth expectations rather than only by inflation fears. Rising long rates for a good reason ("if the yield curve can push up because of growth") is a far better environment for banks than rising rates because investors are worried about the government's finances.

The move is also broadening inside the sector — from the investment banks (Goldman, Morgan Stanley) that led first, out to the deposit-taking lenders (Bank of America, Bank of New York, Citigroup) that benefit most directly from the margin.

JPMorgan came up as the poster child for the financials trade — near all-time highs, market value approaching a trillion dollars, up about 13% on the year. Asked directly whether the banks keep going, Newton didn't hedge: "I'm overweight the financials. I think they do."

He didn't make a company-specific argument. The case is the sector case — a steepening yield curve widening the spread between what banks pay for deposits and earn on loans, in an economy that is holding up. Treat this as a positive read on the group with JPMorgan as its largest constituent, rather than a stock-level call.

Bank of America is one of three names Newton points to as evidence the bank rally is broadening beyond Wall Street trading desks: "in the last year we've seen more evidence of Bank of America and Bank of New York and Citigroup starting to push higher, breakout and make good headway."

The distinction matters. Goldman and Morgan Stanley make money from deal-making and trading; Bank of America is primarily a lender funded by ordinary deposits, so it is the purer beneficiary of the widening gap between short and long rates. A chart "breakout" — price clearing a level that had capped it — is Newton's confirmation that the fundamental tailwind is actually being paid for by buyers.

BNY Mellon is a custody bank — it safeguards and administers other institutions' securities and holds very large cash balances on their behalf. That makes it unusually sensitive to interest rates: higher short-term rates earn more on the cash it holds, and a steeper curve helps its securities portfolio.

Newton groups it with Bank of America and Citigroup as names that have started "to push higher, breakout and make good headway" over the past year — the second, broader phase of the financials move after the investment banks led.

Citigroup is the third of the lenders Newton names as breaking out — part of his evidence that "the banks have just started to come back to life" rather than only the trading-heavy investment banks.

The underlying driver is the same steepening yield curve that supports the whole sector: cheap short-term funding, higher long-term lending rates, and an economy that is still growing. Newton is expressing a sector overweight; Citigroup is one of its clearer chart confirmations.

Goldman was in the first wave. Newton's sequence for the financials recovery starts with "the capital markets, the investment banks, the Goldman Sachs and the Morgan Stanleys" — firms that earn from advising on mergers, underwriting share and bond sales, and trading, all of which pick up when markets are active and confident.

Because it led, it is less of a fresh breakout than the lenders that followed; but it sits inside a sector he is overweight and "very encouraged actually about."

Paired with Goldman as the capital-markets leadership that began the financials recovery before it spread to the deposit-taking banks. Morgan Stanley also runs a very large wealth-management business, which earns fees on client assets and benefits simply from markets being near record highs.

Newton's view here is the sector view — overweight financials on a steepening yield curve and a resilient economy — with Morgan Stanley among the names that moved first.

EWY is a basket of South Korean stocks, and it is dominated by memory-chip makers. That makes it, in practice, a way to own the memory cycle in one ticker.

Newton's case is a chain: memory chips were the last part of technology to break down and have now "broken back out versus equal weighted technology" — meaning they are outperforming the average tech stock again, not just rising with the tide. That directly lifts South Korea, and he says so explicitly.

The second leg is currency. He expects the US dollar to bounce briefly and then "roll over probably into next year," which is historically good for emerging markets: a weaker dollar makes their debts cheaper to service and draws foreign money in. Among emerging markets he prefers Korea to Latin America, which is rolling over on Brazilian politics — "I would much more be apt to follow South Korea, the EWY."

UUP tracks the dollar against a basket of major currencies — the same idea as the DXY index quoted on TV. Newton thinks the dollar "is very close to bottoming in the short run" and can rally to about 102.5 on the index.

The nuance is where the strength comes from. He simultaneously expects the yen to strengthen (a likely Bank of Japan rate hike in September). So the dollar's gains have to come from the other side of the basket: "pretty good weakness in the euro and pound sterling as the dollar bounces."

Beyond that bounce he turns negative — "thereafter, I think the dollar is going to start to roll over probably into next year" — which is the same forecast that underpins his preference for emerging markets like South Korea. So this is a tactical long, not a structural one.

SanDisk came up as the host's example of how violent the memory-chip cycle has been — from 2,400 down to 1,000, back to about 1,300, and still up roughly 450% on the year. Newton did not give a view on the company itself, so this row records a group call rather than a stock call.

His group view is mildly constructive: "the entire memory space has broken back out versus equal weighted technology" after falling behind since early June. Memory chips (DRAM and flash storage) are a commodity business — prices swing hard with supply and AI-driven demand — which is why the shares move in enormous ranges. He cautions that recovery takes time: "it's not going to be a straight shot back to the highs."

Newton is long-term friendly to gold and short-term unwilling to chase it. Two forces are pulling in opposite directions. In gold's favour: seasonality — "normally, August through October, we get very good gains" — and the fact that some longer cycles bottomed in June. Against it: rising long-term interest rates. Gold pays no interest, so when safe bonds pay more in real (after-inflation) terms, holding gold costs more, and real rates are near their former highs.

His path: a rally to about 4,600, then "sort of a final shoe to drop." Rather than buy the current bounce — "I really don't trust this first little bounce off the lows" — he wants weakness: "if we get weakness into September, then I'd be a much bigger buyer on gold and silver heading into next year."

The context is a bust he saw coming. In January, gold's RSI (that momentum gauge again) reached about 90 — an extreme reached only a handful of times ever — right as retail enthusiasm finally arrived after a three-year bull market. Price then fell from roughly 5,000 to 3,500 over seven months. His read on cycles is that gold's typical rhythm is about six years, a "very decent almost a 4-year rally" has been followed by only a seven-month pullback, so the repair is not finished: "eventually it'll be time to own gold again. I can't say it just yet that we're there."

Silver is treated throughout as gold's higher-beta twin — it moves in the same direction, usually further. After a 160% gain in 2025 it is down on the year, and Newton's plan for it is identical to gold's: don't chase the bounce, be "a much bigger buyer" if weakness arrives in September, and hold into 2027.

On whether the old highs get taken out, he is honest about the limits of his method: "that's pretty tricky to make a long-term bet like that. I think that probably can happen, yes" — most likely somewhere between October this year and autumn next year. But his discipline stops him from acting on it early: "I don't like to make big long-term calls when at least for now the momentum is not yet turned enough."

This is the clearest two-way call in the interview, which is why it is marked Neutral rather than either direction. Newton expects crude to run from roughly $82 "up to about 100 over the next one or two months" — that spike is one of his three headwinds for stocks, because it feeds through to inflation expectations and long-term bond yields.

Then he expects it to fall hard. His reasoning is about the cause of the rally: "any sort of move in crude is 100% supply shock" — a war-related blockage of a shipping strait, not genuine demand growth. Supply shocks are self-correcting once the physical problem is fixed, which is why he doesn't expect it to be "long-lasting." He thinks a deal to reopen the strait is close, and that crude goes "back down to probably around $50 a barrel or so between now and year end."

The practical implication runs through everything else: if oil follows that path, the inflation scare fades, the Fed doesn't need to hike, and the rate headwind on gold and stocks lifts — right around the October–November window he wants to buy.

FXY simply holds yen, so it rises when the yen strengthens against the dollar. Newton sees strength first, weakness after.

Near term: Japan's government has intervened to support the currency and Prime Minister Takaichi is publicly pushing the Bank of Japan toward a rate hike, which Newton puts at about 75% for September. Higher Japanese rates make the yen more attractive to hold, so he expects dollar-yen down to about 150 (a lower number means a stronger yen).

After that: "it's going to be right to sell the yen again." Japan's central bank moves in tiny steps after decades of deflation, so its rates stay far below America's, and the currency drifts back down — dollar-yen "back up to 175, 180."

Why anyone else should care: Japanese investors have spent years sending savings abroad to earn higher yields. If Japanese yields rise enough, that money comes home — "a huge rate repatriation theme… it really has global implications" — pulling a large, long-standing bid out of foreign bond markets.

China has been "a little bit of the laggard this year," and Newton's interest in it is patient rather than immediate: he would "look for an eventual further bounce out of China at a time when it really has lagged pretty sharply."

The logic is mean-reversion plus currency. Deeply underperforming markets set up the largest bounces when money finally rotates, and his forecast that the dollar rolls over into next year is the trigger that historically pulls capital into emerging markets. But he ranks South Korea ahead of it today, so this is a watch-list idea, not a current position.

Brazil was one of the year's best places to be in the first half and has now turned. The cause Newton names is political — "some of the political situation in Brazil has caused… the Brazilian stock market to start to roll over a little bit."

His response is not to short it but to step aside: "this time, I think it's still sort of a wait-and-see." For a technician, a market that has stopped going up on bad news of an unquantifiable kind is a position to exit, not to fade — the same emerging-market money he expects a weaker dollar to attract has better places to go, principally South Korea.

ILF is the broad Latin America basket and is heavily weighted to Brazil, which is why Newton names it directly as the thing rolling over on Brazilian politics.

Having been a leadership region in the first half of the year, it has been demoted to "wait-and-see." Within emerging markets his preference has rotated to South Korea now and China later — so ILF is a hold-off, watching for the relative trend to stabilise before it earns money back.

Alphabet appears as Newton's illustration of the one thing he thinks investors should be watching: the sheer scale of AI capital spending. Google is "already spending over 200 billion on CapEx" and is out raising another "25, 30 billion dollars" in debt. "These are extraordinary numbers."

Capital expenditure is money spent on physical assets — here, data centres and chips — which is paid out now against revenue hoped for later. When a company that generates enormous cash still needs to borrow tens of billions on top, the spending has outrun even its own cash flow, and the returns become the market's central question.

His conclusion, though, is not bearish: "I don't sense that it's a bubble. These companies are making really an extraordinary amount of money." He compares the moment to the late 1990s — a real, profitable boom that ran for years before it broke — and puts the window he would actually worry about at 2028 to 2030, not now.

Microsoft was named by the host, not by Newton, as one of the big software names "slaughtered" on the fear that AI would erode their businesses. Newton's answer was about the group rather than the company.

His point is a sequencing one: software was the first part of technology to break down, starting late last year, and it is the first to have healed — "that has since bottomed. We've seen software start to push off the lows." Semiconductors and then memory chips broke down after it and have since stabilised too. So treat this as a neutral, group-level observation: the software damage is repaired, with no specific view on Microsoft's own chart.

Another of the host's examples of the AI-disruption fear trade — the worry being that generative AI tools could undercut the design software Adobe sells.

Newton offered no company-level view. What he did say applies to the whole software group: the deterioration that began late last year "has since bottomed," and those names have started to "push off the lows," ahead of semiconductors and memory in the recovery sequence.

The third software name raised by the host as having been sold off hard and since recovered. Again, Newton answered at the group level rather than on Oracle specifically.

The takeaway is that software's decline came first and its repair came first — a rolling, one-group-at-a-time sequence through technology that, in his reading, is much healthier than everything breaking at once. No individual view on Oracle's chart was given.

Royal Bank was raised by the Toronto-based host as Canada's version of the JPMorgan story — the country's largest bank, up 20–25% on the year and trading at all-time highs.

Newton answered on the sector rather than the name, and his overweight is specifically framed around the US yield curve and Fed policy. Canadian banks face their own rate cycle and a very different mortgage market, so this row records the mention without attributing a view he did not give.

This is a consumer anecdote, not an investment view, and is recorded as such. Asked what he pays for petrol, Newton answered that he drives a Tesla: "I pay about 15 bucks a month if that."

He went on to recommend the experience rather than the stock — "I would encourage people to explore the beauty of having a car that not only can drive on its own but also is very very cheap for energy costs" — and addressed the host's range and charging concerns with about 280 miles per charge and "thousands and thousands of charging stations" in the US. No technical or fundamental call on the shares was made.

TLT holds long-dated US government bonds, and bond prices move opposite to yields — so a forecast of rising long-term yields is a forecast of TLT falling. Newton expects exactly that: "we're going to have a treasury decline where yields creep back to the highs and actually get close to 5%" on the 10-year.

Notably, he does not think inflation is coming back — "it's not necessarily that inflation's going to roar back," and breakevens (the market's own inflation forecast, read from the gap between regular and inflation-protected bonds) "have been plummeting." The pressure comes from three other places: oil heading to $100 lifting the term premium (the extra yield investors demand for lending far into the future), growth running better than expected, and Fed Chair Warsh dropping forward guidance, which anchors short rates while leaving the long end to drift up on its own.

The knock-on effects run through the whole interview: higher long yields are the headwind on gold, on Bitcoin (via tighter liquidity) and on stock valuations, and they are the fuel for his financials overweight. Mortgage rates at 6.7%, "more than double" what many homeowners locked in, are the real-economy cost — which he thinks eventually chokes housing supply.

Newton calls this "a crypto winter" and is explicit that the pain is not finished. Bitcoin has roughly halved from about 127,000 since last October, and the bounce off the June lows "has been very uninspiring." He expects a retest of the prior lows near 57,000, an undercut to roughly 52,000, and possibly as low as 40,000.

Four supports are missing at once. Momentum measured monthly is "still very negative." Liquidity — the amount of money sloshing around the financial system, which Bitcoin historically tracks — is tightening as long-term interest rates rise, "almost the opposite" of what it needs. Positioning and enthusiasm have drained away to other speculations ("now they're buying memory stocks"). And the regulatory catalyst, the Clarity Act, is "probably unlikely to be signed before the midterm election."

But the call is a timing call, not a rejection. He puts the bottom "in about 2 months," followed by "a pretty sharp rally between now and next summer… this probably continues into 2028." He frames the drawdown as ordinary — these happen "every 4 years… 2022 or 2018, 2014" — and says the flush is what you want to buy: for someone with a 2–3 year horizon "sure you can own crypto here," but on a one-month view "it's probably better to hold off."

Ethereum gets the same crypto-winter treatment with slightly less downside: from about 1,885 he expects roughly 1,500, and unlike Bitcoin "it might not make a new low."

The drivers are identical — negative monthly momentum, tightening liquidity as long rates rise, weak positioning and no regulatory catalyst before the midterms — and so is the conclusion: a final flush over the next one or two months that long-term investors should be buying into, ahead of a rally he expects to run into 2028.