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Transcript

Poking The Bear. · ANGLES.

• 0:01
  SPEAKER_00: Poking the bear, my weekly market review, August 2nd, 2026.
• 0:08
  SPEAKER_00: Traders were very much on edge all weekend,
• 0:10
  SPEAKER_00: bracing for a frenetic week with multiple impactful earnings reports,
• 0:15
  SPEAKER_00: a Fed interest rate setting meeting,
• 0:18
  SPEAKER_00: tariffs suddenly front and center again,
• 0:20
  SPEAKER_00: $100 oil, and who knows what from an increasingly erratic trump.
• 0:27
  SPEAKER_00: Conventional wisdom on Wall Street is that U.S.
• 0:30
  SPEAKER_00: foreign policy and military strategy is now being dictated by the interplay between
• 0:36
  SPEAKER_00: the oil price and the election calendar.
• 0:39
  SPEAKER_00: And the main reason for Sunday's pause in U.S.
• 0:42
  SPEAKER_00: airstrikes was that the 104 threshold had been breached again.
• 0:48
  SPEAKER_00: That's $100 oil and $4 at the pump.
• 0:54
  SPEAKER_00: With the midterms on the horizon and coincidentally right before
• 0:59
  SPEAKER_00: the Fed interest rate decision.
• 1:02
  SPEAKER_00: Markets got off to a strong start on Monday,
• 1:05
  SPEAKER_00: with the stock indexes staging an early relief rally
• 1:08
  SPEAKER_00: as oil prices fell back sharply.
• 1:11
  SPEAKER_00: But a wobble quickly set in as chip makers got hammered again on growing fears
• 1:17
  SPEAKER_00: that Chinese AI competition may flood the market with cheaper
• 1:20
  SPEAKER_00: and more powerful products,
• 1:22
  SPEAKER_00: along with worries about persistent circular financing,
• 1:27
  SPEAKER_00: and the indexes closed essentially unchanged.
• 1:30
  SPEAKER_00: The price of NVIDIA,
• 1:32
  SPEAKER_00: the largest component stock in large cap indexes,
• 1:35
  SPEAKER_00: fell so hard that by lunchtime it was no longer the world's most valuable company
• 1:41
  SPEAKER_00: and Apple was top dog again.
• 1:43
  SPEAKER_00: The chip route deepened overnight in Asia as AI greed turned to fear,
• 1:50
  SPEAKER_00: with the South Korean market crashing by 11%.
• 1:55
  SPEAKER_00: But solid earnings from the likes of Coca-Cola,
• 1:57
  SPEAKER_00: Ford, PayPal, and Boeing impressed Wall Street on Tuesday.
• 2:02
  SPEAKER_00: And as the plunge in semiconductor stocks eased moderately,
• 2:07
  SPEAKER_00: the S&P 500 index drifted slightly higher while the NASDAQ 100 closed marginally in
• 2:13
  SPEAKER_00: the red before the baton was passed to a still jittery Asia.
• 2:19
  SPEAKER_00: There was an unusual whiff of intrigue as Fed Day dawned in New York on Wednesday.
• 2:24
  SPEAKER_00: Going into the 2 p.m.
• 2:26
  SPEAKER_00: Eastern announcement,
• 2:27
  SPEAKER_00: the market probabilities were at 30% for a quarter-point Fed Funds rate hike and 70%
• 2:34
  SPEAKER_00: for no change.
• 2:35
  SPEAKER_00: As it turned out,
• 2:36
  SPEAKER_00: the FOMC voted not to change the rate,
• 2:40
  SPEAKER_00: with three dissenting committee members voting for a hike.
• 2:44
  SPEAKER_00: Chairman Walsh held a babbling,
• 2:46
  SPEAKER_00: muddled and evasive word salad of a press conference that only amplified concerns
• 2:51
  SPEAKER_00: that he's in Trump's pockets.
• 2:54
  SPEAKER_00: The three dissents indicate the direction of travel,
• 2:58
  SPEAKER_00: and a rate increase at the next meeting on September 16th is still very much on
• 3:02
  SPEAKER_00: the table.
• 3:05
  SPEAKER_00: Walsh's utter disaster of a performance poked the bear in the form
• 3:09
  SPEAKER_00: of bond vigilantes who constantly fear a feeble Fed response to inflation,
• 3:15
  SPEAKER_00: and that was bad news for long-term bond investors,
• 3:19
  SPEAKER_00: variable rate mortgage holders, or new home buyers.
• 3:23
  SPEAKER_00: While short-term interest rates eased,
• 3:26
  SPEAKER_00: longer-term interest rates exploded higher,
• 3:29
  SPEAKER_00: with the 30-year Treasury rate touching more 20-year highs, breaking through 520.
• 3:37
  SPEAKER_00: Stocks tumbled,
• 3:38
  SPEAKER_00: especially the tech-heavy NASDAQ 100,
• 3:41
  SPEAKER_00: which entered official correction territory
• 3:44
  SPEAKER_00: after suffering its longest losing streak since the dark days of October 2022.
• 3:51
  SPEAKER_00: A further escalation and expansion of the Middle East conflict didn't help.
• 3:56
  SPEAKER_00: Meta, Robinhood and Qualcomm all disappointed with earnings after the close,
• 4:02
  SPEAKER_00: but Microsoft and Starbucks surprised to the upside.
• 4:07
  SPEAKER_00: Wall Street was merciless in its punishment of Meta on Thursday,
• 4:12
  SPEAKER_00: but rewarded Microsoft by adding half a trillion dollars to its value,
• 4:17
  SPEAKER_00: a record for a one-day gain in an individual stock.
• 4:21
  SPEAKER_00: DIT buyers finally dived back in,
• 4:24
  SPEAKER_00: scooping up beaten down tech names in particular,
• 4:27
  SPEAKER_00: except for Meta,
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  SPEAKER_00: partly triggered by a cooling PCE annual inflation reading of 3.7%,
• 4:34
  SPEAKER_00: and despite an underwhelming annualized Q2 GDP growth estimate of 1.5%.
• 4:43
  SPEAKER_00: The indexes all closed substantially higher, enjoying their best day in over a year.
• 4:48
  SPEAKER_00: Bonds, however, made no such recovery as interest rates stayed stubbornly elevated.
• 4:55
  SPEAKER_00: Apples, after our earnings,
• 4:57
  SPEAKER_00: were perfectly fine,
• 4:59
  SPEAKER_00: but traders focused on the supply and cost concerns over component parts and memory
• 5:04
  SPEAKER_00: for its products and the stock price dumped,
• 5:07
  SPEAKER_00: pushing it back to second place again in the biggest company in the world standings
• 5:13
  SPEAKER_00: after just four days at the top.
• 5:17
  SPEAKER_00: There were no such reservations about Amazon, though,
• 5:20
  SPEAKER_00: after it blasted through expectations with its report and the stock zoomed higher.
• 5:25
  SPEAKER_00: The risk on euphoria spread to Asia,
• 5:28
  SPEAKER_00: where the indexes bounced back spectacularly from their recent plunges,
• 5:32
  SPEAKER_00: with South Korea jumping by a record 18%.
• 5:37
  SPEAKER_00: The bargain-hunting-driven burst of momentum initially carried into New York
• 5:42
  SPEAKER_00: on Friday,
• 5:43
  SPEAKER_00: and the indexes got off to a fast start,
• 5:45
  SPEAKER_00: helped by predictably decent Q2 earnings from Chevron and Exxon Mobil.
• 5:51
  SPEAKER_00: Stocks closed the session higher again,
• 5:53
  SPEAKER_00: managing to close out a wildly volatile week in the green,
• 5:57
  SPEAKER_00: but still lower for the month of July.
• 6:01
  SPEAKER_00: Some other things I'm thinking about.
• 6:03
  SPEAKER_00: Despite its pre-IPO price of $135,
• 6:06
  SPEAKER_00: no one who got swept up in the hype got any can't-miss SpaceX stock for less
• 6:13
  SPEAKER_00: than $150 on the first day of trading.
• 6:16
  SPEAKER_00: Unless they dumped it quickly,
• 6:18
  SPEAKER_00: they were down at least 30% last week in a little over 30 trading days.
• 6:23
  SPEAKER_00: Anyone unlucky enough to have bought at the high on June 16th has seen the value
• 6:29
  SPEAKER_00: of their investment cut in half already.
• 6:32
  SPEAKER_00: And all this before August 6th's unlock of 20% of the total number of shares,
• 6:38
  SPEAKER_00: at which time insiders can begin selling their stocks.
• 6:43
  SPEAKER_00: Maybe people should have read Josh Brown's Instagram post first.