As September begins, markets are already flashing warning signs. In Episode 816 of DH Unplugged, hosts Andrew Horowitz and John C. Dvorak dissect a landscape marked by surging crude oil, rising bond yields, and a notable backlash against Target's Halloween costume. The episode, titled "Strikes, Spikes, Hikes," sets the tone for what could be a turbulent final four months of the year.
Crude oil has spiked roughly 13% in two weeks to about $91.80, with diesel crack spreads signaling inflation pressures. This move follows renewed U.S. bombing of Iran, and President Trump's threat that Iran will be "totally wiped out as a country" if it retaliates again. The geopolitical tension is feeding directly into energy prices, complicating the Federal Reserve's path forward.
Meanwhile, bond yields are climbing, reflecting investor anxiety. Horowitz and Dvorak point to eroding trust in policymakers. "The administration is the boy who cried wolf right now," Horowitz says, adding that Treasury Secretary Scott Bessent has "really gotten a little bit crazed trying to manipulate the markets." Dvorak ties this to a broader theme: "It's a series of very large trust factors." He warns that tariff escalation reminiscent of Smoot-Hawley would signal that America no longer believes it can compete.
Corporate earnings are telling a mixed story. Dell issued blowout guidance, projecting fiscal 2027 EPS near $25.50 versus $18.99 prior, driven by a 40% data center market share. Nvidia is reportedly pursuing Hugging Face for $12.9 billion, though tensions between Jensen Huang and Sam Altman have surfaced. On the downside, Dick's Sporting Goods plunged roughly 30% as Foot Locker comps fell 3.6%. Target faced a backlash over a Halloween clown costume, highlighting brand-management landmines.
The hosts also discuss government equity stakes in Intel, MP Materials, and Trilogy Metals, with a lawsuit challenging the Intel arrangement. Horowitz, who discloses a personal short position in Intel, questions why Washington gets discounted shares that retail investors never see. Dvorak contrasts the U.S. approach with China's state-owned enterprise model and flags GLM 5.3 Flash from Chinese lab Z.ai, reportedly trained without a single Nvidia chip.
Looking ahead, Friday's August payrolls, ADP, JOLTS, and ISM data will provide critical clues. The hosts frame September's classic volatility against a backdrop of institutional distrust and a Fed caught between political pressure and a wobbly labor market. As Dvorak notes, currencies, equities, and private valuations ultimately rest on trust, and that trust is fraying.
For more insights, listen to the full episode at DH Unplugged.
