Editor's note: Longtime readers will remember our friend Rob Spivey... He's the director of research at our corporate affiliate Altimetry. There, Rob and his colleagues use their "Uniform Accounting" approach to dig deep into corporate earnings and offer a unique perspective on stocks and the markets.

Editor's note: Longtime readers will remember our friend Rob Spivey... He's the director of research at our corporate affiliate Altimetry. There, Rob and his colleagues use their "Uniform Accounting" approach to dig deep into corporate earnings and offer a unique perspective on stocks and the markets. Today's essay from Rob was recently published in yesterday's edition of the free Altimetry Daily Authority e-letter. In it, he describes a disparity in the earnings growth between the Magnificent Seven and the rest of the S&P 500 Index.  This is poised to change in the next several months. And in this essay, Rob dives into what that means for the market next year... The Market Has Never Been So Lopsided  Rob Spivey, director of research, Altimetry The S&P 500 Index and its "equal weight" twin don't usually look this different... In the regular S&P 500, the biggest companies get the biggest slices of the index. Today, the Magnificent Seven tech giants make up roughly a third of its weightings. Then there's the S&P 500 Equal-Weight Index. This version takes the same 500 stocks... but gives each the same 0.2% slice. Before the pandemic, that distinction barely mattered. The indexes' 52-week correlation had sat between 0.95 and 0.99 for about 15 years. (A reading of 1.0 means they move in perfect lockstep.) But the indexes have been growing apart since 2020. Today, their 52-week correlation is down to 0.67... the lowest on record. Even during the dot-com bubble, it never fell below 0.85. An unusually small group of stocks is now steering the market. And folks are worried about what happens if the Mag 7 stop delivering. However, we don't think this divergence will last for long... The Mag 7's profits are outpacing everyone else's... We can see this through our Uniform Accounting framework, which strips out the distortions in standard accounting rules to show a company's real profitability. From 2020 through 2025, these stocks' combined Uniform earnings nearly tripled. The rest of the S&P 500 grew 69%. No wonder the market is following the Mag 7 so closely. The gap is still widening. Mag 7 Uniform earnings are on track to grow 47% this year – their fastest pace since 2021. That means seven companies are expected to deliver more than half of the S&P 500's total earnings growth in 2026. Since the Mag 7 are more concentrated in the index, their stock momentum impacts it more. And their extraordinary earnings growth is driving shares higher... which propels the entire S&P higher, too. That's why the 52-week correlation score has dropped so low. Recommended Links: The Stock That Beat Nvidia 1,000% to 400% Our back test shows that the EQ Power Gauge would've given Powell Industries a rare "double bullish" signal in 2023 before it ran up as much as 1,000%. Meanwhile, tech giant Nvidia only rose 400% over the same time frame. And now, this system just gave five AI stocks the same "double bullish" rating... Learn how to get their ticker symbols here. Wall Street Legend: 'The Race to Fix AI's Fatal Flaw Could Send One Stock Soaring' Sixty-year Wall Street legend Marc Chaikin has discovered a fatal flaw built into Elon Musk's AI model and every AI frontier model on Earth... and says the race to fix it could send one obscure stock soaring. Right now, behind a high-security fence in rural Tennessee, the U.S. government is quickly working to solve it by building a new form of AI – what Marc calls "Sovereign AI." He believes it could trigger a $248 trillion boom, 56X bigger than today's AI market. Click here for the full story and get the name and ticker of Marc's No. 1 stock to buy now, 100% free. But the other 493 companies are picking up speed... Let's rewind to 2023. The rest of the S&P 500 went through an "earnings recession"... meaning profits shrank across a broad swath of companies. Their Uniform earnings fell 4%, even as the Mag 7 kept growing. But growth has sped up every year since then. Uniform earnings for the rest of the index rose 6% in 2024 and 7% in 2025. They're expected to climb 16% this year and 20% next year. The Mag 7 are experiencing the opposite. These stocks are expected to grow just 7% next year as they lap 2026's huge jump. Said another way, in 2027, the rest of the market should grow earnings faster than the Mag 7. It would be the first time that has happened in recent memory. Take a look... The Mag 7 have led every year since 2021. But they won't keep their lead for much longer. Next year, the rest of the market is expected to take the baton. Investors tend to assume the gap will close the painful way – with the Mag 7 crashing back to Earth... Our numbers point to a better path. The Mag 7 are still expected to grow next year. The rest of the market is just catching up... as 493 companies build on three straight years of faster earnings growth. When companies grow profits, their stocks tend to follow. The equal-weight index and the S&P 500 will start moving together again, with the broader market rising to meet the leaders. Don't let the record gap scare you out of stocks. If most of your money sits in mega-cap tech – or in an S&P 500 fund that's about one-third Mag 7 – it's worth looking at the rest of the market. That's where earnings growth is set to be fastest next year. Regards, Rob Spivey   Editor's note: As we said, Rob and the rest of the Altimetry team break down companies' "as reported" financial statements and rebuild them in a Uniform format...  Understanding the discrepancies in the numbers and what they mean for a company's future can lead to huge gains... even on safe stocks. In Altimetry's Hidden Alpha publication, our friends at Altimetry combine the Uniform Accounting methodology with additional audio forensics analysis to find mispriced stocks poised for big growth. Learn more about Hidden Alpha as part of a special presentation right here. Market View Major Indexes and Notable Sectors     # Hld:     Bullish     Neutral       Bearish Dow 30 -0.03% 7 18 5 S&P 500 +0.42% 104 262 133 NASDAQ +1.21% 25 54 19 Small Caps +0.31% 337 1097 461 Bonds -0.74%   Health Care +2.45% 32 107 16 — According to the Chaikin Power Bar, Small Cap stocks and Large Cap stocks remain somewhat Bearish. Major indexes are mixed. *  *  *  * Sector Tracker Sector movement over the last 5 days Staples +3.32% Materials +3.05% Energy +2.71% Health Care +2.13% Discretionary +1.95% Financial +0.02% Real Estate -0.60% Utilities -0.65% Communication -1.22% Industrials -1.46% Information Technology -5.30% *  *  *  * Industry Focus Innovative Technology 50 36 9 Over the past 6 months, the Innovative Technology subsector (XITK) has outperformed the S&P 500 by 3.31%. Its Power Bar ratio which measures future potential is Very Strong, with more Bullish than Bearish stocks. It is currently ranked #5 of 21 subsectors and has moved down 1 slots over the past week. Top Stocks AVPT AvePoint, Inc. BILL BILL Holdings, Inc. DOCS Doximity, Inc. *  *  *  * Top Movers Gainers WDC +6.09% SNDK +5.53% DDOG +5.36% AMZN +4.98% PLTR +4.36% Losers MOS -4.78% NRG -4.21% AMP -4.07% ES -3.55% HONA -3.33% *  *  *  * Earnings report Earnings Surprises CLF Cleveland-Cliffs Inc. Q3 $0.28 Beat by $0.04 ZION Zions Bancorporation, National Association Q3 $1.78 Beat by $0.13 CCK Crown Holdings, Inc. Q3 $2.39 Beat by $0.13 FITB Fifth Third Bancorp Q3 $1.13 Beat by $0.05 BOKF BOK Financial Corporation Q3 $2.64 Beat by $0.12 *  *  *  * You have received this e-mail as part of your subscription to PowerFeed. If you no longer want to receive e-mails from PowerFeed, click here. You're receiving this e-mail at reditudo@gmail.com. For questions about your account or to speak with customer service, call +1 (877) 697-6783 (U.S.), 9 a.m. - 5 p.m. Eastern time or e-mail info@chaikinanalytics.com. Please note: The law prohibits us from giving personalized financial advice. © 2026 Chaikin Analytics, LLC. All rights reserved. Any reproduction, copying, or redistribution, in whole or in part, is prohibited without written permission from Chaikin Analytics, LLC. 201 King Of Prussia Rd., Suite 650, Radnor, PA 19087. www.chaikinanalytics.com. 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