Volatility Pulse - Fuel on the Fire
More Fuel on the Fire
Piper's macro team now pegs 2026 NEW fiscal impulse at $656B — $266B from lower tariffs, $190B from individual tax cuts, $200B from accelerated capex depreciation. That's 2.2% of GDP being injected on top of an economy already running hot.
Source: Piper Sandler
$725 Billion And Counting
$725B in AI Capex
Hyperscaler 2026 capex guides after this week's earnings: AMZN $200B, MSFT and GOOGL each $190B, META $135B. Combined ~$725B, up from ~$670B pre-earnings. Pre-earnings the street feared a pullback; instead they all raised.
Source: Bloomberg
70.3% Funded From Cash Flow
Of the $434B in trailing-12-month hyperscaler capex, 70.3% came out of operating cash flow — and that number is projected to hit 88.5% by year-end. The capex bill is not getting financed by debt or dilution. They are paying for it out of pocket.
Source: Bespoke
Crowded At The Top
P/E down - Earnings Up
The tech sector's forward P/E ratio is in a 25% drawdown from its peak — while the price hovers at all-time highs. Earnings have done all the work. Multiple expansion has done none. That's a rarely-seen combination.
Source: Goldman Sachs
The Goldilocks April
Earnings Growth is straight up
Q1 SPX blended EPS growth came in at 27.1% with 63% of companies reported — vs the 13.2% analysts penciled in at quarter-end. The strongest growth since Q4'21 and the biggest beat-vs-expectations in years.
Source: FactSet
Six +1% Days, Zero -1% Days
April had six 1%+ up days and zero -1% down days. Every prior April that hit that profile finished the year higher 100% of the time, with a 24% median gain — and 9 of 10 cases returned 10%+ with no 20% drawdown.
Source: Bloomberg
22 Days Above 10DMA, +10%
SPX stayed above its 10-day moving average for 22 straight days while gaining 10%+ — first time in 28 years. Forward returns over 1-6 months were positive 100% of the time in every prior instance.
Source: Bloomberg
Vol Sleeps Through Earnings
Vol Risk Premium Hits Zero
After spiking to multi-year highs during the war scare, the SPX volatility risk premium has slumped all the way back to roughly zero. Buying vol now costs nothing relative to what realizes — usually a good time to hedge
Source: Bloomberg
$725 Billion And Counting
AI Hiring Up, Not Down
Earnings calls jointly mentioning 'AI' and 'hiring/talent' jumped to 26.0% of all calls by Q3'25 — Jevons Paradox in action. Cheaper intelligence has not killed jobs at AI-exposed firms; it has made them hire more.
Source: Citadel
The Tariff Tax Returns
Manufacturing Prices at 4-Yr High - Inflation is here to stay
April ISM Manufacturing held at 52.7, but the prices-paid sub-index climbed for a 4th straight month to 84.6 — the highest reading in four years. The expansion is being driven by tariff-induced front-loading, not real demand.
Source: Bloomberg
Debt Crosses 100% of GDP
US national debt now exceeds 100% of GDP — past the once-unthinkable threshold and on track to break the post-WWII record. Q1 GDP came in at 2.0% growth; the debt is growing faster than the economy.
Source: WSJ
Just Because...
There Are No Bridges Across the Amazon River
The Amazon River is the largest river in the world by water volume — and has zero bridges crossing it along its entire 4,300-mile length. The surrounding rainforest is so remote and the river so wide and flood-prone that it's never been economically viable. The Atlantic Ocean is actually easier to cross.
