Good Wednesday evening MacroEdge Readers& Community,
It’s a late night update from the West Coast once again - I have a very short business trip to take care of tomorrow in the South - and from there I will be making my way east… Today was a relatively muted Nvidia reaction, there was some excitement early on, but the action has only moved the Nasdaq futures up about half a percentage point overnight, while the other indices remain flat. Energy prices swung today off of the lows - and we’re seeing movement in the MacroEdge Oil and Gas portfolio that will be discussed in a separate portfolio strategy update released shortly. If you don’t yet subscribe to the MacroEdge Oil and Gas Research Substack - you can do so below:
Overnight reaction is relatively muted as the Bank of Korea increases rates 25bp, and Nvidia numbers are once again hot - but going to be very hard to keep up in the quarters to come.
I think we are crawling toward ‘terminal velocity’ on quarterly revenue figures from Nvidia - and while we might not hit that point until Q1 or Q2 - if markets are actually ‘forward looking’ they’re going to start pricing in the risk that the data center construction/financing/buildout cycle are all starting to lose momentum.
Wheat has surged higher on a combination of drought, tighter diesel/fuel markets, and surging fertilizer + other input costs for farmers. I am extremely proud of this one in particular, since we spent two weeks earlier in the year covering this trade from Amarillo, TX and the Texas Panhandle. Our on the ground research remains best in class, and we’ve got more in store the rest of the year on the discovery front… Maybe a follow-up to the Panhandle will be warranted if wheat starts to climb toward those crazy 2022 levels:
In case you didn’t have a chance to read that…
I continue to expect that the ‘TACO’ theme and this relatively quiet period will continue until the Warsh speech on Friday now, and Fed officials are actively underpricing a supply shock and fuel shock continuation (or worsening of one) going into 2027 - both of which I think we could see get worse before they get better.
That’s all for the brief update this evening from me - and I will see you over on the MacroEdge Oil and Gas Research Substack…
We are doing really special things here folks…
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MacroEdge Flagship Index Portfolio Strategy Discussion & Update -
@SixFinance, Head of Research
It has been a frustrating go of it since the inception of the Flagship and although we are outperforming SPX to date, I feel that we have too much equity beta in a market with increasing macro pressures. Certainly correlating with the index more than I would like over this small sample size. The portfolio has not been changed since last week’s update, but I anticipate increasing portfolio concentration in our best ideas. Changes will be coming in next week’s update. Jackson Hole this Friday should be a very interesting insight into how aligned the Fed is with Treasury. Inflation is still running hot, balanced against an increasingly weak housing sector.
Continued below: Portfolio Strategy & Commentary Continued