Macro Talk: 10.9.2026

Macro and Market Takeaways

• Markets: Commodities generally rose, equities lagged, and bonds had a positive week. On a risk-adjusted basis, TIPS outperformed nominal Treasuries, which the presenters took as evidence that markets were still pricing in inflation pressure.
• Oil and the macro backdrop: Oil remained central to cross-asset moves, though the presenters saw oil prices and related trends stabilizing, with the energy complex’s upward momentum becoming less forceful.
• Bonds: They argued that recent bond-market pressure was more consistent with strong nominal growth and an inflationary supply shock than with a U.S. fiscal crisis. Their strategic caution was to reassess bond holdings if bonds stop behaving in line with typical macroeconomic relationships.
• Equities and market breadth: U.S. index trends were moderately positive, but strength was unusually concentrated in technology and AI-related stocks. About 60% of S&P 500 constituents were below their 200-day moving average, even as the index was near a high. The speakers also noted very low individual-stock correlations and a pronounced divergence between capitalization-weighted and more balanced indexes.
• Global trends: Commodity trends remained strong, while U.S. nominal and inflation-protected fixed-income trends were substantially negative. Equity trends were mixed globally, with signs of weakness outside U.S. technology. The presenters said their indicators did not yet signal a regime change, though they were monitoring for one.
• Overall regime view: They continued to describe the environment as one of strong nominal growth, generally favorable to equities and commodities relative to fixed income. They emphasized, however, that equities and commodities need not move together.

Inflation, Rates, and Economic Data

• The New York Fed’s one-year inflation-expectations measure rebounded to 3.9%. One presenter considered this survey more rigorous than the University of Michigan measure, while the other cautioned that surveys can be slow-moving and noisy. Both viewed it as supporting the broader case that inflation pressures were increasing.
• The presenters described a simple CPI-based Treasury strategy:
  • Use a month-to-month CPI assessment.
  • Enter fixed-income assets when the measure is below 2%; exit when it is above 2%.
  • They said a test since 2000 captured many periods of positive or high Sharpe ratios for fixed income. This was presented as an illustrative historical rule, not a guarantee.
• They said historical Fed hiking cycles averaged roughly 150–200 basis points of increases. Their view was that the balance of risk favored more hikes than markets had priced, though the eventual number of hikes remained uncertain.
• On political pressure against rate increases, they argued that if the Fed does not tighten enough, market forces and inflation expectations may push yields higher anyway. They also cautioned that investors need not pre-emptively bet on extreme intervention in bond markets; in some cases, waiting for an announcement may be preferable.
• Canada: Employment data were described as weak, with job losses and rising unemployment, while inflation was lower than in the U.S. The presenters questioned whether substantial additional Canadian tightening was likely soon and called North American two-year bonds an interesting area to watch.
• Upcoming data: U.S. retail sales, manufacturing, housing, and the NFIB small-business report; internationally, Australian policy and employment updates, along with Chinese exports, inflation, and domestic lending. They expected Chinese lending to remain near historical lows, consistent with ongoing deleveraging.

Earnings Momentum and AI Investment

• The presenters track earnings momentum across 10 countries, noting that it is persistent over time and that a decline can make equity markets more vulnerable. They saw dispersion across countries, early weakening in some emerging markets, and a possible slight turn negative in U.S. earnings momentum, though they said the reading can depend on calculation and smoothing choices.
• They identified a decline of more than 2% in earnings momentum as a potentially meaningful warning signal, but said that threshold had not yet been reached.
• Korea and semiconductors: Korean equities were said to have moved sideways while SMH recovered, despite both having previously peaked around the same time. The speakers viewed this divergence, along with emerging-market earnings trends, as worth monitoring.
• AI spending and revenues: One presenter said OpenAI confirmed $5 billion of annual recurring revenue (ARR) at the end of September, up from $2.5 billion at the end of Q1. They also cited market-share metrics rising from 25% to 50%, but the transcript’s related spending figures are unclear.
• The presenters argued that AI-related revenue growth appeared to be shifting from parabolic to more linear growth, raising questions about whether demand can support the scale of investment and lofty future revenue expectations. They said hyperscaler investment was still broadly tracking prior plans, supporting the near-term connection to Nvidia and semiconductor demand. However, they cautioned that gradual adoption could disappoint investors expecting much faster growth.

Credit and Risk

• The speakers saw limited evidence of a broad, systemically important credit problem, citing more dispersed credit and less concentration of leverage than in past cycles.
• They considered a localized credit event possible, including in areas connected to AI, but thought it less likely to become a global credit-cycle event. They characterized the current environment as revenue-driven.

Assets, Sectors, and Instruments Mentioned

• Commodities and energy: Oil, petroleum products, Brent (mentioned in passing), and commodities broadly.
• Equities: S&P 500, U.S. and global equities, technology and AI stocks, Korean equities, emerging markets, and semiconductor stocks.
• Funds and fixed income: SMH semiconductor ETF, TIPS, nominal Treasuries, Treasury bonds, North American two-year bonds, and fixed-income assets generally.
• Other market indicators: U.S. dollar, bond yields, credit spreads, and CPI.
• Companies and themes: Nvidia, OpenAI, Anthropic, hyperscalers, and large language models.

Disclosures

No explicit “not financial advice” disclaimer was included in the subtitles. The discussion contains market views and illustrative strategies, including a historical CPI-based fixed-income rule; it should not be read as a guarantee of performance.

Presenters and Sources

• Presenters: Bob Elliott and co-host Aan (surname unclear in the subtitles).
• Program/source: Macro Talk, associated with Prometheus Research.
• Other sources or references mentioned: New York Fed inflation-expectations data, NFIB, and a sector chart attributed to “Pas Pond.” Listener questions were credited to Nirvan 101, VK Macro, and Fabian Wintersburg.