Redeye Macro Note: Reviewing the Weekly Close, Binary Market Outcomes for 2H 2026, Asian Review Pt. 4
In this Redeye Macro Note we discuss the weekly close, highlight the potential for binary market outcomes in the 2H of 2026, and take a (Part 4) look at Asian markets
Don Johnson (@DonMiami3), Chief Economist
Good Friday evening MacroEdge Readers and Community,
This evening we have a very brief report to wrap up the week as promised - and we’ll be discussing the weekly close, the binary market outcomes for 2H 2026, and taking a look at Asia for Pt. 4 of the ‘Asian Review’. Asia has been wobbling violently the last few weeks, and the Nikkei finally suffered a crack lower out of the relatively orderly drawdown it was experiencing (discussed below), and the KOSPI was on holiday, which gave Korean traders a reprieve from a rapid drawdown that has seen 1 in 30 Korean adults margin called in the short time period.
Outside of the Asian troubles - which we’ve now been discussing for ~4 months - due to the multitude of risk factors there, the oil market has been picking up on the war escalation that we’ve seen over the last 36 hours. Attacks have intensified dramatically in the last 48 hours, and infrastructure is now being targeted more directly. I am not sure what these attacks will accomplish other than serve as another escalation marker - and the Strait of Hormuz is back close to zero in terms of transits. The IRGC Navy began shutting down the Strait about ~$70/bbl, if you recall - and we correctly identified that Iran wanted (and needed) Brent to at least $85/bbl. At this profitability level - they can continue to stay in the ring for as long as possible - and the Strait closure is going to cause another inflation impulse like we saw earlier in the year if this continues through August. The Houthi forces have also taken steps toward involvement - aligning with IRGC commands, and the IRGC directly targeted Yanbu in the last 6 hours - a notable target escalation. If we get impacts to Yanbu or the Bab-el Mandeb Strait, then we are once again way mispriced in energy markets (but namely spot WTI and Brent). On the products front, as discussed a few nights ago, gasoline and diesel have been accelerating rapidly. Most consumers are seeing 20-30 cent jumps from the lows in terms of gasoline prices, and diesel is firmly back above $5/gal average nationwide. The 3-2-1 spread is at a record high of ~$70 - highlighting record market tightness - and rig counts also popped higher on a w/w basis. Tomorrow and Sunday, I will be discussing sector opportunities given the pricing backdrop - and keep an eye on key ETF benchmarks as sector signals (like XLE):
This weekend - the focus will be on the war and how the escalations will impact oil and gas markets. Presidential advisors know that the situation in the Strait of Hormuz is totally unsustainable - and the binary outcomes as it pertains to the Strait are clear: escalate or inflate…
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Next Reports on Deck:
Saturday Macro Note - Non-Op Oil and Gas Opportunities - Our Partnership for the Future
Sunday - Weekly Macro Note - Week Ahead, Technicals Deep Dive, Oil and Gas Outlook, Portfolio Strategy Update
Tuesday - War Note
Wednesday - State of the AI Bubble and Data Centers - July 2026
Reviewing the Weekly Close
Since we discussed much of the macro data for the week, there wasn’t a whole lot of notable data today that was released.
For building permits - on a Y/Y basis - we’re seeing a slight contraction while new construction announcements ticked up again slightly in the range:
