Weekly Macro Note: Technicals and Market Structure Deep Dive, A Look at Oil and Gas, Portfolio Strategy Update, and More

In this Weekly Macro Note - we undergo a technicals and market structure deep dive - looking at domestic and international equity and commods markets, look at oil and gas, & more

Don Johnson (@DonMiami3), Chief Economist

Good Sunday evening MacroEdge Readers & Community,

We’re starting a relatively quiet week on the macro front this week that will have plenty on the geopolitical and earnings side of things. We also continue to closely monitor the situation in Asian markets - as Korea and Japanese equity markets have begun to wobble more violently in the latest bout of volatility - as discussed many times in the past few weeks.

Futures are subdued this evening as markets are trying to assess whether or not we’re going to get a much larger wave of escalation in US-GCC attacks on Iran in the coming days - which did not materialize last night even though it was announced by the President.

Take note of our ‘why war is bullish’ note from a week ago for signals on direction this week. The fiscal input in markets remains enormous - and the deficit surged once again in June. This week we will get earnings and outlooks from Alphabet and Tesla - which will give us a useful benchmark outlook on the AI capex trade going forward, and a second look at consumer health on the automotive side of things. The wealth effect has kept automobile/light truck sales at elevated levels - even with automotive delinquency data looking as it does and repos sitting at 2009 levels (yes, I know this metric isn’t population- or cars-on-the-road adjusted).

There are so many mixed signals in the data - and a major part of this, in my opinion, is just how poor data quality is getting across the federal government datasets and metrics (especially survey-based data).

On the war front - the Strait of Hormuz remains effectively closed - with just 2-3 daily transits right now - and there hasn’t been any VLCC traffic in several days. Oil markets have picked up on this - with Brent surpassing $90/bbl in the overnight trading hours - and WTI right around $85/bbl. These levels are much more sustainable than the $110-$120 range for oil E&Ps, and as I highlight below, the market needs to find a better equilibrium now even with the Strait closure. The war is on the precipice of either a major escalation on both sides given the events of the last 72 hours, or another ceasefire/MoU that will likely serve as a period for both sides to reorganize and reload again. Strait traffic is unlikely to normalize for at least the remainder of the year now, based on pre-war traffic levels. Sure, there’s oil and gas products being routed elsewhere, but the market is still tight tight tight (just look at 3-2-1), etc. Iran continues to strike tankers and cargo ships with ease in the Strait - calling into question the efficacy of US strikes in recent days in the region. Another tanker was disabled within the last hour after it was impacted by an anti-ship missile.

‘Quote of the week’

This evening we’re going to take a brief look at the next reports in the pipeline, take a look at the quiet macro week ahead (with the exception of some important earnings events), dive into the technicals across the market - domestically and internationally - and provide a brief update on the oil and gas outlook.

Not yet a MacroEdge Ozone subscriber? Upgrade below the ‘next reports in the pipeline’ and get all of our research, data, reports, and much more.

Next Reports in the Pipeline:

• Tuesday - War Note and Non-Op Oil and Gas Opportunities

• Wednesday - State of the AI Bubble and Data Centers - July 2026

• Thursday - Midweek Macro Note

• Saturday Evening - Redeye Macro Note

• Sunday - Weekly Macro Note

Macro Week Ahead

This week is much more important geopolitically and on the earnings front than for macro data. We’re heading into the next FOMC meeting here in about a week - and that will provide us useful signals on whether or not there are enough FOMC members to land at least 1 rate hike for the year. I do not expect to see a hike at this meeting, though the following meeting presents the highest chance of a hike, as negative base effect MoM inflation readings will abate for July given the spike in energy prices.

Full week: FOMC blackout.

Monday: n/a

Tuesday: ADP Employment

Wednesday: n/a

Thursday: (Japan) - CPI

Friday: Home Sales Data

Earnings >$500bn

• Tesla

• Alphabet

Keep an eye out for geopolitical developments this year - as we sit on the precipice of major escalation, or another major ‘TACO’ ceasefire walk-back… This is another ‘Devil’s Pool’ window in this conflict:

Technicals Deep Dive

MAGS & Nvidia

MAGS showing a significant negative divergence on the weekly ->

Many of these have even weaker looks on the monthly timeframe. Notice how performance on the leaders stopped including the full momentum basket, as markets became reliant on the AI and semiconductor trade.

A drop out of the wedge here on NVDA would bring about 120 or so from a technical standpoint:

Upside in the pattern stands at about 250, but that would be very unlikely for 2H, barring any major intervention by the government in the AI space. Note the compounding negative divergences as well, which matter more on the weekly and monthly, and usually signal longer term trend reversals.

Continued below: Technicals Deep Dive in AI and Data Centers, Bonds, Oil and Natural Gas, Asian Markets, FX, Crypto… Our updated oil and gas outlook, and Portfolio Strategy update from Six)