When silver miners and chip stocks start moving in lockstep, something interesting is happening. When Morgan Stanley’s top equity strategist calls it a potential peak, something interesting just became something urgent.
Mike Wilson, the firm’s chief US equity strategist and CIO, flagged during recent Bloomberg discussions that silver-related assets and semiconductor stocks are displaying remarkably correlated price movements, a pattern he believes signals exhaustion in both sectors. The warning comes after the Philadelphia Semiconductor Index (SOX) suffered a 10% decline on June 5-6, its worst single-day drop since 2020.
The numbers behind the warning
Here’s the thing about that 10% selloff: it landed after the SOX had already gained 96% year-to-date heading into early June. Wilson pointed to a specific technical signal that caught his attention. The SOX index had climbed to approximately 35% above its 50-day moving average, a deviation he noted hasn’t been seen in nearly 25 years.
Adding fuel to the concern, earnings revision breadth for semiconductors had reached cycle highs. Wilson’s read is that when analyst upgrades peak, there’s often nowhere to go but down, at least temporarily.
