As September begins, markets are bracing for a volatile month ahead, with crude oil surging, bond yields climbing, and a wave of corporate earnings surprises reshaping investor sentiment. In Episode 816 of the podcast DH Unplugged, hosts Andrew Horowitz and John C. Dvorak dissect these trends, warning that trust in institutions is eroding and that the Federal Reserve is caught between political pressure and a shaky labor market.
The episode, titled "Strikes, Spikes, Hikes," opens with a sharp focus on energy markets. Crude oil has jumped roughly 13% in just two weeks, reaching about $91.80 per barrel. The surge comes amid renewed U.S. bombing of Iran, following President Trump's threat on Fox News that Iran would be "totally wiped out as a country" if it retaliated again. Diesel crack spreads are flashing inflation warnings, which could have far-reaching implications for consumer prices and the broader economy.
Bond markets are also in the spotlight, with yields rising as investors grapple with fiscal uncertainty and potential policy missteps. Horowitz points to Treasury Secretary Scott Bessent and Fed nominee Kevin Warsh, saying, "The administration is the boy who cried wolf right now," and adding that "Bessent has really gotten a little bit crazed trying to manipulate the markets." Dvorak ties these concerns back to trust, arguing that currencies, equities, and even private valuations ultimately rest on one thing: trust. "It's a series of very large trust factors," he says, warning that tariff escalation echoing the Smoot-Hawley Tariff Act would signal that America no longer believes it can compete.
Corporate news is equally turbulent. Dell provided blowout guidance, projecting fiscal 2027 EPS near $25.50 versus the prior $18.99, driven by a 40% share in the data center market. Nvidia is reportedly pursuing a $12.9 billion acquisition of Hugging Face, but the deal is overshadowed by a fallout between CEO Jensen Huang and OpenAI's Sam Altman. On the retail front, Dick's Sporting Goods plunged roughly 30% after Foot Locker reported comparable sales fell 3.6%. Target faced a backlash over a Halloween clown costume, highlighting the risks of brand management in today's social media-driven environment.
The hosts also delve into government equity stakes in companies like 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 highlights GLM 5.3 Flash, a Chinese AI model reportedly trained without a single Nvidia chip, signaling a shift in the global tech landscape.
Elsewhere, LEGO reported a 21% jump in first-half revenue, and Japanese regulators are scrutinizing the baseball-card "casino economy." Investors are also eyeing Friday's August payrolls report, along with ADP, JOLTS, and ISM data, for clues on the labor market's health and the Fed's next move.
The episode paints a picture of a market at a crossroads, where geopolitical events, monetary policy, and corporate earnings are colliding. With trust in institutions wavering and the Fed under political pressure, investors face a September that could set the tone for the final quarter of the year. As always, DH Unplugged offers a skeptical, humorous take on the week's developments, available at DHUnplugged.com and on major podcast platforms.
