Oil prices surge to two-week winning streak as Iran supply fears grip markets
Over the last couple of weeks, we have shared evidence that supports the reflationary narrative and some that defies it. Today, we share the latest ISM Manufacturing data, which lends credence to the reflationary narrative.
The ISM Manufacturing survey showed a big improvement in sentiment, as shown below. The gauge shot up 4.7 to 52.6, well above expectations of 48.5. The increase was the second-largest increase in this century! The survey components were equally promising with new orders, a forward-looking indicator, up to 57.1 from 47.7.
The ratio of new orders to inventory stands at 1.19, the highest since 2021. Prices paid ticked up slightly to 59, and employment rose to 48.1. While the gain in employment is good news, the index remains below 50, indicating contractionary conditions. It’s worth adding that many foreign ISM manufacturing surveys are also pointing higher. Confidence appears to be growing after last year’s tariff turbulence.
Interestingly, despite the sharp improvement in sentiment, numerous comments in the ISM manufacturing survey were less positive than the data suggest. Might there be a “K” shaped recovery within the manufacturing sector?
Silver- Did Retail Investors Get Over Their Skis?
While the recent drawdown in silver was not easy predict, there was one omen that it was overdue for a sharp reversal. This warning sign was surging ETF volume. ETFs are predominantly traded by retail investors, who tend to chase trends in their latter innings.
The first graph below shows the dramatic increase in the dollar amount of silver traded in the SLV ETF this year. Consider these facts:
- On January 26, $38.133 billion of SLV traded.
- Dating back to 2006, the amount traded solely on January 26th was more than the annual amounts in seven different years.
- In fact, it is 13% of the total traded in all of 2025.
- Moreover, the dollar value traded last week (January 26-30) was over $144 billion, surpassing all but five of the 21 years shown.
The incredible volumes in the silver ETF (SLV) leave little doubt that retail investors are actively trading silver. To add some context to what this might mean, we share the second graph below, which shows the prior bubble peak in late April 2011. As shown, the price in April 2011 spiked and peaked. During that final surge, the daily volume exploded by about 10x. The price surge and massive increase in SLV trading volume were unsustainable. Is today different?
Walmart Joins The Trillion Dollar Club
On Tuesday, Walmart’s (NASDAQ:WMT) market cap eclipsed $1 trillion. In doing so, it joins 9 other S&P 500 stocks with market caps over $1 trillion. The list is almost entirely composed of technology companies, except for Walmart and Berkshire Hathaway (NYSE:BRKb). It’s worth noting that health care giant Eli Lilly (NYSE:LLY) is also teetering on a $1 trillion market cap.
Walmart has quintupled its market cap in the last ten years via the following strategies:
- Building out its online platform
- Broaden appeal to higher-income shoppers
- Same-day delivery offerings
- Invest in AI and other automation to improve efficiency and profit margins
Walmart’s decision to move its stock listing from the NYSE to the Nasdaq underscores management’s effort to reframe Walmart not merely as a traditional retailer, but as a technology-enabled distribution and logistics platform. These actions more than paid off, as shown below.
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