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Crude Realities: NVIDIA’s Test and the Global Inflation Shock · The SPY Trader

• 0:00
  Welcome to the Spy Trader podcast , I am your host , Barnaby Bullmarket .
• 0:05
  It is currently 6 am on Sunday , May 17th , 2026 , out here in the Pacific .
• 0:11
  I hope you have your favorite mug ready because we are staring down a pivotal week starting tomorrow , May 18th .
• 0:17
  Our markets , specifically the S&P 500 or SPY and the Nasdaq100 known as QQQ , are sitting right near record peaks , but there is a major clash of catalysts on the horizon .
• 0:31
  We are seeing a coolingoff period driven by inflation that just won't quit and some very serious geopolitical tensions .
• 0:39
  The big headline is that April's headline CPI clocked in at 3.8 percent , and professional forecasters now project inflation could spike toward 6 percent in the second quarter of 2026 due to the ongoing energy shock from the USIran conflict .
• 0:57
  Brent crude is trading near 105 dollars a barrel right now , which is a massive headwind for consumer spending but a huge tailwind for the Energy Select Sector SPDR Fund , or XLE .
• 1:10
  This Wednesday , May 20th , we are getting the FOMC minutes .
• 1:14
  Expect these to be hawkish .
• 1:16
  Recent reports indicate an 8 to 4 split in the last Fed vote , which is the closest we have seen since the 90s .
• 1:24
  These minutes will likely reveal deep concerns about those spicy inflation prints , potentially quashing any hopes for a 2026 rate cut .
• 1:33
  Because of this , the 10year Treasury yield has pushed higher , pressuring highmultiple growth stocks .
• 1:39
  The iShares 20 plus Year Treasury Bond ETF , known as TLT , remains volatile as bond traders price in the possibility of an actual rate hike by early 2027 .
• 1:52
  Now , looking at sector performance , Technology , the XLK , has been the dominant leader , up roughly 22.6 percent yeartodate .
• 2:02
  However , the rally is increasingly concentrated , and analysts are starting to issue sell warnings on overextended names .
• 2:10
  On the defensive side , Consumer Staples , the XLP , are gaining traction as recession insurance .
• 2:18
  With the consumer feeling the pinch of 4 dollar gasoline and high mortgage rates , names like Walmart , ticker WMT , are becoming safe haven favorites .
• 2:28
  We are also seeing highbeta AI plays like Rackspace Technology , RXT , which is up 165 percent in May , and Innodata , INOD , outperform the Magnificent Seven , though they are vulnerable if the broader market stumbles .
• 2:44
  This coming week is effectively NVIDIA Week .
• 2:48
  NVIDIA , NVDA , reports earnings on May 20th .
• 2:52
  This is the market's primary test .
• 2:54
  NVDA is expected to beat high expectations , but a beat and raise may no longer be enough to drive the Nasdaq higher if their guidance doesn't address potential spending slowdowns among cloud providers .
• 3:07
  We also have Walmart reporting on May 21st .
• 3:11
  Their report will provide a health check on the US consumer .
• 3:15
  A strong report there could lift the Vanguard Dividend Appreciation ETF , or VIG .
• 3:21
  We will also be watching Target and Home Depot to see if the Middle East friction and inflation are finally causing a contraction in bigticket spending .
• 3:29
  So , for my recommendations this week , I suggest three things .
• 3:34
  First , rotate toward defensive value .
• 3:37
  As the S&P 500 faces resistance at alltime highs , the riskreward for pure tech is deteriorating .
• 3:46
  I recommend reducing exposure to highmultiple tech and increasing your weight in Walmart or the Consumer Staples Select Sector SPDR Fund , XLE .
• 3:56
  Walmart has a beta of 0.66 , making it much more resilient to interestrate shocks than the Nasdaq .
• 4:03
  Second , hedge your geopolitical risk via commodities .
• 4:08
  The USIran conflict remains the wild card that could push oil to 150 dollars .
• 4:15
  Maintain a position in SPDR Gold Shares , GLD , and the Energy Select Sector SPDR Fund , XLE .
• 4:23
  Gold acts as a classic geopolitical hedge while XLE captures the energy premium from disruptions in the Strait of Hormuz .
• 4:31
  Finally , for aggressive investors , monitor Rackspace Technology , RXT , for a consolidation breakout above its 50day moving average .
• 4:42
  It is benefiting from the AI infrastructure buildout and offers highbeta upside that can decouple from the S&P 500 if it secures more contracts .
• 4:52
  Expect high volatility this week with a downward bias for tech if NVIDIA doesn't deliver a perfect report .
• 4:59
  The energydefense trade will likely continue to lead .
• 5:02
  Thanks for listening to Spy Trader .
• 5:05
  I am Barnaby Bullmarket , wishing you a great week of trading .