Speaker 1Happy Monday out there, Team 42. It's your skipper here, Darius Dale, to present our macro minute for Monday, November 9th, 2026. Hope everyone had a great weekend. So as always, we'll start with the executive summary from today's lit off morning notes. So let's dive right in. What do we learn today that will likely have the greatest impact on your portfolio is that modest signs of diplomatic progress between the U.S. and Iran, plus the rising probability of an impeachment of U.S. Secretary of War Pete Hexeth, challenge the durability and severity of the current risk-off inflation market regime. While it is unclear that such a move would achieve the desired results of ending the war and truncating its impact on the nationwide affordability crisis, it would represent the first shot across the bow from a checks and balances standpoint toward an administration where even its own vice president has broken rank. Brincudo is off nearly 5% amid these developments. Well, QMacroData policy signals supported our active themes or consensus expectations. As the political party adjusted one year and five to 10 year median CPI expectations from the November University of Michigan Consumer Sentiment Survey, strongly supported our sticky inflation and play-action pass to set up the run themes. Play-action pass being the Fed's going to tighten on a transitory basis to set up the run, which is easing structurally. From the perspective of the U.S. economy, persistent above-trend PPI inflation in China is supportive of our sticky inflation and play-action pass to set up the run themes. Well, QMacroData policy signals challenged our active themes or consensus expectations. As the political party adjusted one year and five to 10 year median CPI expectations from the November University of Michigan Consumer Sentiment Survey, challenged the consensus forecast of peaking inflation. In China, the slowing October CPI and PPI data challenged the consensus forecast of stable inflation. What other QMacroData or policy signals did we analyze in today's lead-off warning note that may have significant impact on asset markets? Number one, NVIDIA is probing CEO Jensen Wang's affair with an alleged Chinese spy, which puts his position and the firm's outlook in doubt. Independent directors and outside counsel will lead the board's review, after Wang disclosed the relationship in a staff memo. Wang earlier denied any impropriety involving the woman, who worked for a Singapore-based client. All told, this scandal could unsettle the AI theme, given NVIDIA's role as a major AI financier and Huang's industry influence. Recall that Huang has partnered with top Wall Street firms on a $500 billion liquidity backstop and has invested across the AI supply chain. NVIDIA has no public succession plan or a clear successor, and Huang runs a flat, structure built around himself with allegedly 60 direct reports. Wang credits the company's agility to this organizational structure, but the downside is obviously a historic key man risk for a company of NVIDIA's size. NVIDIA's stock is down over 6% today amid this unfortunate news. There will likely be much more downside if the board takes action to remove him from his CEO role. So keep that front and center here. And then number two, Alphabet. Google is widening its AI chip lineup to challenge NVIDIA in a market worth hundreds of billions of dollars. Increased signs of return deflating competition are colliding with investor worries about slowing AI CapEx, and the Democratic midterm wins have weighed on the outlook for data center investment. Amid these mounting concerns, hedge funds sold tech at a near-record pace last week, which triggered the biggest momentum crash in about 40 years. All told, recall that AI infrastructure plays account for roughly 40% of the S&P 500 and over two-thirds of its 20% projected earnings growth for 2027. By contrast, AI infrastructure makes up only 15% of the stock 600 Europe index and under a quarter of its 9% expected 2027 earnings growth. Thus, anything that signals increased competition among the companies or increased concentration among investors could give investors more reasons to sell if volatility threatens the holdings of funds that are currently at risk of sliding into negative territory from a year-to-date return perspective. This is the contagion we've been warning about for six, seven weeks now. And then finally, number three, AI tokens are getting incrementally expensive for end users to access, while AI stocks are getting incrementally expensive for investors to hodl. Median corporate AI spend per worker tripled to $15 from $5 between September 2025 and September 2026, according to Ramp. Spend among the top 1% of AI users jumped over $9,500 from roughly $2,500. All told, the broader AI investment theme is undergoing a meaningful re-rating to factor in heightened execution risk, something that was previously not present amid hockey sticking estimates of revenue and free cash flow for companies throughout the AI ecosystem. Discernment is good and supportive of our view that this is not the end of the 17 plus year old secular bull market, even though the current risk off inflation market regime may deepen in the coming weeks and months. We still think investors should buy that dip, but certainly not today, in our opinion. Shifting gears to our community here is always a wrap up with the question from our community. It says, this one's titled, the elites are waking up and they posted a post from a Chamath Palapatiya, who's one of the four hosts of the All In podcast, one of the more popular podcasts and certainly one of the most important podcasts as relates to this whole kind of AI theme. I would say they're about as close to the vanguard of the AI narrative as anybody, just given their relationships with the folks in Silicon Valley and their investments in their own private firms. So I just wanted to read this because I thought it was really important in the context of something that's core to me as a person, not my mission as a person, which is to end this K-shaped economy dynamic and recreate and create an E-shaped economy that we deserve as Americans and the families across our country deserve. So I'm just going to read what he wrote and offer my brief comments on it. It says, when I'm wrong, I'm wrong. I thought that when unemployment was low, GDP was high, household income rose, it meant everyone was running. Not true. The American economy is declining. De-coupled from the economic progress of asset owners, decoupled the economic progress of asset owners from wage earners to such a degree that broad-based measures of success are no longer reliable measures of progress. This single issue of asset ownership versus progress of wage earners will be the defining issue in all future elections. Other issues will get caught in the interpretation, price of eggs, Iran war, price of gas, et cetera. But the candidate that realizes that those are downstream of the asset versus wage earners dynamic gets and gets there. The messaging focused on it all will win. No amount of money spent in an election or gerrymandering will change its outcome. This is what I learned on November 3rd. Well, I'm sorry that it took him to November 3rd to wake up to realize this. If you were just doing the actual research, you would have arrived at these conclusions much earlier. Folks like myself, Ray Dalio, Neil Howe, Peter Turchin have all arrived at the conclusion that the balance between labor and capital in our society is run amok. There's no other way to put it. And obviously what we saw on Tuesday, in our opinion, my opinion, and I think Chamath would agree, it's not a vote for the Democrat Party. It's a repudiation of the party they put in power to address the problem. And so you're going to continue to see, in my opinion, a tremendous amount of heightened political volatility until some candidate, you know, figures out what I'm telling everyone. I've been telling everybody throughout my entire career, which is this labor versus capital dynamic is run amok. We now have a K-shaped economy. The government's too big. We now have a historic cantaloupe effect on top of that. And all this stuff is making people's lives worse. And so we need to take a step back. And stop arguing from the perspective of Republicans and Democrats, because that completely misses the point. This is not about Republicans versus Democrats. That's what they want you to believe on Fox News. That's what they want you to believe on CNBC. That's what they want you to believe on CNN. That's what they want you to believe on Newsmax. And guess what? All those organizations get paid to get you guys fighting each other. But if you can just rise above the partisan tribal nonsense and recognize that the relationship between labor and capital in our society is run amok because of decades, because of horrible policy, decades of corrupt campaign finance deregulation that allows rich people to put people in office to create policies, tax policy, fiscal policy, monetary policy, regulatory policy, foreign policy, policies that benefit them and their income at the expense of the income and consumption of the median and to below median American family. And obviously, it's come on the roost from a political cycle standpoint. And so the only way we can save our country from the scourge of consequences. Communism is if more people like Chamath wake up and recognize that they are part of the problem. Chamath, you're part of the problem. If you support a tax code where your tax, your income is taxed at a significantly lower effective rate than the income of the folks that you employ, then you're part of the problem. If you support a tax code whereby you can take millions of dollars of tax-free loans against your stock in a way and basically finance your consumption tax-free, but the folks who go to my church can't do that, then you're part of the problem. We're going to wind up with socialism. Communism or civil war or revolution if we don't fix this. And we need more people like Chamath who can wake up and honestly say, hey, I got it wrong. It's no longer about aggregate statistics anymore. What matters are the distributional statistics. And if we don't do a good job of fixing the distributional statistics, then Ray Dalio, Neil Howe, Peter Turchin, and Darius Dale are going to be right that the folks at the bottom of the K are going to flip over the Monopoly board and ruin our society. And you guys have all been warned. So we're wrapped up there. Darius Dale here presenting our Macro Minute for Monday, November 9th, 2020. If I sound a little bit passionate about this, it's because I am, as someone from the bottom, 0.001% of this K-shaped economy. Catch you out of here tomorrow.
Speaker 2Cheers. If you enjoyed this content, please remember to like and subscribe. Thank you. This content is for informational purposes only and does not constitute an offer or a solicitation. Reliance upon the information in this material is at the sole discretion of the viewer or listener. Investing involves risks. Any reference to a company, issuer, or investment strategy is for instructive purposes only and does not constitute investment advice. advice. For full disclosures, visit 42macro.com backslash disclaimer.
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