IGA CAPITAL - WEEKLY MACRO: Waves, Warsh, and Crude Spikes:

"Alright fam, paddle out and lock in. What was slated to be a chill week dominated by CPI prints and Warsh’s Capitol Hill debut turned into a absolute washing machine of geopolitical chaos and tech re-evaluations. Between Chinese AI drops, Middle Eastern missile trades, and a bond market caught in a total tug-of-war, the macro landscape is throwing some serious heavy barrels right now.

Here is the rundown on where the water’s warm, where the reefs are showing, and how to position the book."

July 20th, 2026

Joshua Hawley

1. THE EQUITIES LINEUP: TECH GETS WIPED OUT, CPI SAVES THE SESSION

Bulls got dragged under this week, no two ways about it. The S&P 500 washed out 1.0%, the Nasdaq 100 took a 1.5% spill, and the Philadelphia Semiconductor Index (SOX) officially caught a bad ride straight into bear market territory—down over 20% from its ATH after its gnarliest week since the April 2025 tariff freakout.

What triggered the flush? Chinese AI outfit Moonshot dropped their Kimi K3 model. It’s allegedly running neck-and-neck with top-shelf OpenAI and Anthropic builds, pulling back the curtain on a classic DeepSeek-style scare. Markets are suddenly asking the high-stakes question: If the frontier models are getting optimized this fast on leaner setups, can the mega-cap tech spend-a-thon actually justify these insane valuations? CapEx anxiety is real again, bros.

The silver lining in the lineup? June CPI was an absolute breath of fresh air. * Headline CPI: -0.4% MoM (first negative print since 2020).

• Core CPI: Flat at 0.0% vs. the 0.2% street consensus.

That cool breeze completely slammed the door shut on a July rate hike. Odds for a move at the upcoming Fed meeting cratered from ~50% down to roughly 14-17%. The tape got a momentary breather, but energy shocks are looming right on the horizon.

2. GEOPOLITICS & CRUDE: A KINETIC MESS IN THE STRAIT

If tech was getting chopped up, the energy desk was dealing with a full-blown Rogue Wave. The US-Iran situation went completely kinetic, trading strikes for seven straight days. We aren't just talking military posts anymore—bridges, ports, and energy infrastructure are getting lit up.

Here’s the tape on the ground:

• The Strait of Hormuz is functionally locked down. Commercial shipping is dead in the water.

• Trump dropped a wild 20% transit fee proposal on cargo moving through the Strait, then yanked it off the board almost instantly after the market called it unworkable.

• Emergency crude buffers are running on fumes after months of friction. Brent popped past $83/bbl early on, and over the weekend, things took a tragic turn: two US service members were killed in Jordan, drawing fresh heavy retaliatory strikes on the IRGC.

• Iran officially pulled the plug on the interim peace framework, ripping up the last diplomatic thread.

The Trade Takeaway: Watch out for supply-side inflation via energy. The US is fast-tracking talks for a revived Iraq-Syria pipeline to bypass Iran's stranglehold and push crude to the Med, but that’s a long game. Near term? Oil volatility is set to inject some serious noise into the Fed's game plan right before their July 29th sit-down.

3. TREASURIES: BONDS BID ON SAFETY, BUT THE 30-YR IS WARNING US

Rates had a wild ride. Early in the week, Fed Governor Waller channeled his inner hawk, hinting at near-term hikes and sending the 2-year yield up to a fresh YTD high of 4.29%. But as tech imploded and CPI printed super chill, fixed income caught a massive safe-haven bid.

• The 2-year plummeted 9bps post-CPI.

• The 10-year slid 8bps to print around 4.52%.

Here is the structural red flag you CANNOT ignore: The 30-year yield is utterly refusing to break below 5.00%.

Why? Because the macro backdraft is stacked with heavy fiscal supply. The US federal deficit for the first nine months of FY26 widened out to $1.37 Trillion—amplified by the Supreme Court striking down those tariff collections and forcing a wave of refunds. Supply is flooding the market, and long-end buyers are demanding a real term premium to swallow it—especially with Warsh explicitly telling Congress the Fed isn't in the business of bailouts for the Treasury's issuance habit.

4. FED WATCH: WARSH SHOWS HIS INNER HAWK

Chair Warsh took the mic on Capitol Hill for over five hours of testimony, and he made one thing crystal clear: He’s not giving away free forward guidance, and he’s holding a zero-tolerance stance on sticky inflation. Even with the cool CPI print, Warsh reminded the room that soft data doesn't mean "mission accomplished." Waller and Logan are backing him up, openly floating the idea that slightly higher rates might still be required to balance the macro scales.

• The Rate Path (Implied Overnight Rates):

  • Current Implied Rate: 3.626%

  • July 29th Meeting: 3.663% (Essentially a hold)

  • Dec 9th Meeting: 3.942% (Money markets pricing in a full hike toward year-end)

  • June 2027: 4.037%

Warsh’s new balance sheet panel (heavy on academics, light on street traders) is already getting side-eye from Wall Street strategists who think trying to unwind a $6.7TN balance sheet on purely academic models is going to create real operational friction. As the Fed enters its blackout period ahead of July 29, the committee is split between a cooling CPI and a roaring geopolitical oil shock. Popcorn ready.

5. THE RADAR: WHAT WE’RE TRACKING

Keep your risk parameters tight this week. We’re quiet on the macro front early, but the back end packs a punch.

This Week:

• Mon (7/20): Nothing material. Clean slate.

• Tue (7/21): ADP Weekly Employment.

• Wed (7/22): MBA Mortgage Applications.

• Thu (7/23): Weekly Jobless Claims.

• Fri (7/24): S&P Global US Manufacturing & Services PMIs, New Home Sales, Building Permits.

Next Week (The Heavy Artillery 7/27 – 7/31):

Durable Goods, 5-Yr & 7-Yr Treasury Auctions, Consumer Confidence, FOMC Rate Decision (7/29), Personal Income/Spending, PCE Inflation, and Q2 GDP prints.

THE BOTTOM LINE FOR IGA CAPITAL

Don't get tricked by the flat core CPI into thinking the inflation narrative is dead and buried. Geopolitics in the Middle East has the potential to drag crude through the roof, and the 30-year Treasury yield hanging near 5% is screaming that the long end of the curve is nervous about government supply and energy shocks. Keep your duration exposure tactical, stay cautious on hyper-valued AI CapEx names until the Moonshot dust settles, and keep some dry powder ready for the volatility that July 29th is guaranteed to bring.

Stay safe out in the lineup, protect your downside, and let’s get this paper.

– Macro Desk, IGA Capital