Good Sunday evening, MacroEdge Readers & Community,
This evening we’re going to start the week off with a bang, and I’m looking forward to the week ahead. Last week, we saw the major vol spike we’d been looking for in the two weeks after the election. It arrived on Thursday, to the surprise of many, particularly after Wednesday evening soothed and buttered up a lot of egos in tech and AI land. As I noted to Oil and Gas Research readers and community members in last week’s report, we’re also on the verge of losing our status as a global naval superpower, and that’s a genuinely concerning development.
We absolutely nailed the VIX asymmetry a few days ago, and once again we’re at a critical market juncture for the next few weeks. I strongly suspect this larger impulse has one more move lower in it to find the local low before things calm down for 2-3 months or so.
The race to call the bottom, as I’m now dubbing it, is at levels I’ve never seen. There was a unique level of rage on X this weekend that I haven’t seen yet in this 2023-present cycle, and that was another interesting sentiment barometer, particularly on the exposure front. I don’t think anyone actually has proper hedging in place, which is why we’re seeing these behaviors. But as I highlight below, when you look at names like Nvidia (one of the main engines behind this bubble across AI and technology), we’re in a rather precarious position for the entire cycle now. Many of these indicators are sounding the ‘cycle turn’ alarm, even if we do see another reflex rally off the intermediate lows. Given the last jobs report, I suspect a December rate hike is now very likely, and the 10Y is setting up for another move higher, which will probably hit the EU (and particularly France) the hardest. I think the bond vigilantes have used the last few weeks of this ‘growth scare’ to recharge. Market participants already know there are no sound solutions to the fiscal situation in Western countries across the globe, but it will take actual austerity for many to realize how precarious positions have gotten.
In this Weekly Macro Note, we’re going to explore what’s coming soon for MacroEdge, including the launch of Don’s Notebook on 12/1, a place where I (and other MacroEdge contributors) will share thoughts, ideas, and commentary on much more than just the immediate macrosphere. We’ll also cover the macro week ahead and look at the inflation problem, which is still staring us in the face. I’ll provide a brief technical update and things to watch globally, we’ll talk about Huang’s honeypot situation and where Nvidia stands in the cycle (and as the cycle’s driver), and I’ll wrap up with a very brief update on oil and gas.
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What’s Coming Soon for MacroEdge
On 12/1, we’ll launch the third Substack in our outlined trifecta: Don’s Whiteboard. My Whiteboard will be a place to connect with MacroEdge Readers & Community on a daily or every-other-day basis. I’ll discuss the latest macro developments, provide updates to my different writing series (like Project South Africa), rant about developments in the world, and much more. If you enjoy reading my work for the sake of the story, I really think you’ll connect with and appreciate Don’s Whiteboard once we finish setting it up. It will cover a broad array of topics, some of which will fall outside the traditional macro research spectrum. It will only enhance our eclectic thinking as an organization, and it will be another place to connect with my thoughts as we continue to live through uncharted territory in so many aspects of our country (and the globe): economically, politically, socially, and so much more.
Like MacroEdge.world, both Oil & Gas Research and Don’s Whiteboard will be getting their own domains shortly. In the meantime, you can find Don’s Whiteboard at DonsWhiteboard.substack.com/subscribe. Summer of 2027 will see the addition of a unified all-in-one membership, but for the time being - you can get all of the benefits by subscribing to each Substack individually… Stay tuned for more on the ‘AIO’ subscription in 2027.
There’s so much in store as we prepare for a very strong 2027, and things continue to progress with great speed. On 11/27, you can expect our latest update on the 2027 vision and roadmap from an offerings standpoint. Organizationally, we remain in a very robust position to expand across the macrosphere and the oil and gas world in 2027, and we won’t stand idle in growing our opportunities across these sectors. Learn more at MacroEdge.net.
Weekly Macro Note Agenda
Macro Week Ahead
The Inflation Problem - It’s Still Staring us in the Face
Technical Update
Huang Gets Honeypotted - a Look at NVDA Red Flags
WTI and HH - Brief update on the energy sector
Macro Week Ahead
For the week ahead, there isn’t much going on in earnings land. I continue to believe the December hike is now priced in, and there’s very little reason to think it won’t happen. If we get a hot CPI print this week, I expect the odds of a December hike to jump above 95%, and the 10Y will likely get back ‘on the move.’
The 10Y is also pointing to higher levels in the next several weeks ahead:
Outside of the December FOMC setup, Cisco and Applied Materials report this week. On the macro data front:
CPI: Tuesday, November 10
PPI: Friday, November 13 (...yep, Friday the 13th)
There are several Fed speakers throughout the week, and post-CPI, I suspect they’ll drag up the odds of a December rate hike on the back of all this hot data.
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