Here's the Deal

Coming in hot this week as I am tired of the BS.

Note to newer subscribers: I voted for Trump three times and was an early supporter. But I don’t subscribe to today’s blindly partisan approach to politics. When economic policies being sold lead to harming the majority of American households and businesses, I call it out regardless of who I voted for.

A Clear-Eyed Look at the Administration’s Economic Narrative

The administration is now in a full-court press defending its economic agenda because the cumulative negative effects have only recently begun hitting everyday Americans over the past couple of months. If the policies were working, they would be showcasing the results instead of defending them. They would also not have to rush to try and lower the rising prices caused by their policies. Instead, we’re seeing a wave of messaging that ranges from misleading to the easily provably false.

The President’s Statements this Week

Let’s start with Trump refusing to take responsibility for the once again accelerated rising costs, misrepresenting inflation data, and wasting time talking about the previous administration.

Here’s the reality:

• Costs are not “tumbling down.”
  Every major inflation measure shows prices continuing to rise, and most at an accelerating pace since the April tariff announcements.

  

  12-month YoY CPI Growth

• That claim that “Thanksgiving costs are 25% lower than last year” is not just wrong, it’s absurd. Walmart announced its 2025 curated dinner is 25% lower than last year’s, but it consists of fewer items. Making this claim worse is that he could have taken a win as this year’s Thanksgiving menu is about 2% - 3% less than last year, according to Wells Fargo. But instead chose a wildly misleading figure that goes against the common sense of anyone who has been to a grocery store multiple times within the last year.
  

Housing: Another Misleading Narrative

While correct about not building enough homes in the past decade, the attempt to blame rising housing costs on illegal immigration is disconnected from reality. The overwhelming majority of undocumented immigrants do not live independently. They live in multi-generational households or crowd multiple wage earners into a single unit so they can save money and/or send it home.

As the chart below shows, the surge in housing prices and rents began before the big surge in illegal immigration. The pace of the increase in housing then slowed as illegal immigration continued to surge higher. Proving Vance’s assertion that illegal immigration is to blame for higher housing costs is 100% false.

It’s a weak argument, which is quick and easy to prove false. JD Vance would do himself and his career a huge favor by staying away from and being more skeptical of Trump’s economic team. These might be their bad ideas, but everyone will remember him making the statements.

Misusing Research to Justify Bad Policy

Then we got the latest talking point from the administration, using a study to imply that tariffs don’t really hurt the economy and causes lower inflation:

I read the study. That’s not what it says.

The actual conclusion is straightforward:

• Tariffs weaken the economy over time.

• They reduce demand and lower economic output.

• Reduced output leads to higher unemployment.

• Lower economic output and higher unemployment eventually leads to lower inflation because households and businesses are forced to cut spending.

In other words, tariffs “lower inflation” only after they damage the economy enough to cause economic hardship.

Think about how bad a policy must be when your best defense is: “Don’t worry, it eventually lowers inflation… After it wrecks the economy and causes huge job loss.”

Yikes.

The study is pretty solid, but it doesn’t account for where these tariffs were imposed within the credit cycle and the broader secular market environment. Tariffs implemented during a hot, late-cycle economy behave very differently from an economy already falling. When asset prices are inflated and households still have some spending firepower and are sitting on huge amounts of tap-able equity, businesses can and do pass higher costs directly to consumers. That’s why inflation has re-accelerated instead of cooling since the new tariffs were announced in April.

This is exactly what I warned about months ago: These tariffs were introduced at the worst possible point as inflation was trending down and we would more than likely be at or around the 2% target now without them. Without the new tariffs, we wouldn’t be staring down the risk of a major economic predicament caused by cutting interest rates in an already-inflationary environment.

The push for deregulation has been a bright spot. The Administration needs to focus on that, bring in a new economic team, and abandon the misguided tariff agenda. If not done sooner rather than later, Trump and the Republicans run the risk of getting steamrolled next year. And if that happens, this presidency will be remembered not as a time of renewed American strength, but as a cautionary tale of how bluster and bad economics can turn a potentially strong hand into a gigantic wasted opportunity.

Trump cutting tariffs to fight food inflation. Wait. What?

One headline this week says it all:

“Trump moved to lower duties on beef, coffee, and dozens of other goods, as he looks for ways to address Americans’ concerns about the cost of living.”

Wait… so in order to fight inflation the administration is now cutting the tariffs they applied, after repeatedly saying tariffs don’t cause inflation?

No October Data Due to the Shutdown?

The administration announced this week that we may not get unemployment or inflation data for October because of the shutdown. That has never happened in any previous shutdown. So the natural question is: What’s different this time?

Is it just the length of the shutdown, which was the longer ever? Or, is the data really so bad that they don’t want it compiled or released?

It certainly isn’t a stretch to think that Trump would declare a “national emergency” to make sure the data got out if there were even a hint of positive news out of either of these reports.

And imagine the reaction from the right if the Biden Administration had tried something like this. Trump himself would be on every platform shouting about corruption and cover-ups.

The economic narrative from the administration is devolving quickly as reality begins to set in.

Shutdown Ends, But More Fights Are Still Ahead

The government shutdown finally ended after 43 days, making it the longest in U.S. history. The reopening required bipartisan defections: six House Democrats and eight Senate Democrats crossed the aisle to pass the same funding bill which they voted against repeatedly since mid-September.

But the deal that ended the shutdown is held together by little more than a handshake. The core dispute over health care subsidies, specifically ACA (Affordable Care Act) related provisions, was pushed to December, with Republican leadership promising a separate vote later. Nothing substantive has been resolved.

The ACA subsidies at the center of the 2025 shutdown are the “enhanced premium tax credits” passed in 2021 as part of the COVID relief legislation, and sold as “temporary”.

These enhanced subsidies did two major things:

1. Increased the size of premium tax credits.

2. Removed the income cap, allowing middle-income households to qualify for help for the first time.

Should the subsidies expire at the end of 2025, millions of Americans will face sharp premium increases and fewer people would qualify for government assistance to pay for the increased premium costs in 2026. Whereas if the new subsidies put in place as part of COVID relief in 2021 are extended, they will be paid for through federal taxes and additional federal debt.

“There’s no such thing as a free lunch.” One way or the other, you’re going to pay for it.

Earnings Season: Week 6 of 6

Q3 earnings continue to tell a story of corporate resilience meeting reality. With 91% of S&P 500 companies reporting, earnings jumped 11-13%, and an unusually high number beat expectations on both earnings and revenue. Corporate profit margins hit 13.1%, led by tech, finance, and utilities.

But here's what matters more: the tone is shifting. While results remain strong, management commentary reveals growing defensiveness. Companies are pulling back on selective spending, watching costs more carefully, and issuing cautious guidance for 2026. This is classic late-cycle behavior.

Consumers: Experiences Win, Essentials Hold Steady

People are still spending on experiences such as Disney parks, cruises, and travel as those continue to thrive even with price increases. Streaming subscriptions grew while traditional TV declined. The pattern is clear: consumers prioritize experiences and digital content over traditional entertainment.

On the grocery side, food inflation is moderating but hasn't disappeared. Price-sensitive shoppers are sticking with protein staples and value brands, showing resilience in essential categories despite wallet pressure.

Energy: Profitable but Playing Defense

U.S. oil producers are making money despite lower crude prices by prioritizing cost controls and margin protection over production expansion.

Technology: AI Boom Continues, But So Does Capital Intensity

Cloud infrastructure and AI investments remain powerful global themes. Data center investment continues to be robust, as does demand for digital services and gaming.

The catch? Capital intensity and supply chain friction are creating bottlenecks. The growth is real, but so are the challenges.

Looking Ahead: This Week's Critical Tests (Nov 17-21)

Three reports in this final major week of earnings will tell us whether this late-cycle resilience can continue:

Nvidia ( $NVDA ( ▲ 1.77% )  ) - The AI litmus test. Is explosive data center demand still accelerating, or is it starting to plateau? Nvidia's results will shape expectations for the entire tech capex cycle and enterprise cloud spending.

Walmart ( $WMT ( ▼ 0.06% )  ) - The consumer reality check. As the bellwether for low- and middle-income households, Walmart will reveal whether shoppers can withstand ongoing inflation and economic uncertainty heading into the holidays.

Baidu & Alibaba ($BIDU ( ▼ 3.85% ) & $BABA ( ▼ 3.78% ) ) - The China signal. These results show whether the world's second-largest economy is rebounding or still struggling, with major implications for global growth.

Markets:

This week, it’s all about 6–7 to me.
No, not that 6–7 the kids are obsessed with lately. I’m too old to pretend I understand that one.

I’m talking about $SPY ( ▼ 0.02% )  at $670.
That’s my line in the sand for whether we should expect a deeper market selloff or another push toward strength and fresh highs into year-end.

$SPY ( ▼ 0.02% ) S&P 500

Here’s how I’m treating it:

Below $670 → I turn bearish

A daily close below $670 flips my bias to bearish.

One exception:
If we close below $670 right before $NVDA ( ▲ 1.77% )  earnings on Wednesday after the bell, I expect some market “fuckery.” NVDA has become the market’s anchor stock, the role AAPL played for 15+ years. I would not be surprised to see markets close below $670 on Wednesday and then gap up Thursday morning as the result of a strong earnings report which “saves the market” as AAPL did so many times in the 2010s.

And yes, I’ve been saying for years that NVDA would take that mantle long before it became obvious.

If we break below $670, key support zones are:

• $640–645

• $610–600 (deeper flush zone)

Above $670 → I stay bullish

If SPY holds above $670, I’m looking for resistance at:

• $700

• ~$715

What I actually do with positions

A break below $670 doesn’t mean I nuke every position. Instead:

• I cut or scale down the speculative names.

• I increase focus on energy, commodities, and shipping stocks; sectors that don’t rely on index strength to grow and often move countertrend to the major indices.

These areas continue to show structural strength and remain some of the cleanest setups across the market.

$DIA ( ▼ 0.62% ) Dow Jones Industrial Average:

$QQQ ( ▲ 0.08% ) Nasdaq:

$IWM ( ▲ 0.29% ) Russell 2000 (Small Caps):

Bitcoin $BTC.X ( ▼ 1.36% ) continues to struggle to gain real traction, unable to hold any upward momentum. Not exactly what you want to see for higher stock prices as it signals “risk-off” behavior.

Keep in mind that historically, November is one of the strongest months for markets, and seasonal tailwinds are still at our backs. However, this November has proven to be weaker than the mean. But it’s all about the close, and not where we sit in the middle of the month.

Stock to Watch: $FIGR ( ▲ 16.33% )  

Keep an eye on $FIGR. They crushed earnings this past week, and it remains one of my favorite names for massive long-term growth potential. Yes, it’s a recent IPO and some may still label it “speculative,” but the company is already making money and growing at an exceptionally fast rate. The more I dig into their business, the more impressed I am.

$FIGR ( ▲ 16.33% )  — Figure Technology Solutions, Inc.
I absolutely love this stock as long as it stays above the ⚓️ IPO VWAP, which is currently $38.79 (the green line on the chart). I’ll be breaking down why this level matters and what makes the company so compelling in a deeper dive later this week.

If you’re looking for a potential big winner over the next 5–10 years, this is a name with the kind of growth profile that could end up being one of the standout performers of the decade.

WTF of the Week:

While the headline and image below is meant to scare you, in truth 875K mortgage holders only represent ~1.01% of total outstanding mortgages.

20% YoY jump in foreclosures may also sound apocalyptic…

But that percentage looks a lot larger only because it’s rising off an unusually low base. In fact, current foreclosures are still below pre-Pandemic levels.

The economy has issues, but a housing price collapse is not one. Proving once again that any “analyst” who has called for a housing price crash the past 13 years has absolutely no idea what they are doing and are not to be trusted.

Quote of the Week:

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