Oil, Metals, and More Geopolitical Risk | Macro Mondays: Feb. 2, 2026

Key Concepts

• ISM Manufacturing Index: A key indicator of US economic activity, particularly investment cycles. A reading above 50 suggests expansion.
• Bonus Depreciation: A tax incentive allowing companies to accelerate capital expenditure (capex) deductions, designed to stimulate economic growth.
• Decoupling: The trend of reducing economic interdependence between the US and China, particularly in strategic sectors.
• Strategic Mineral Stockpile: A US initiative to build a reserve of critical minerals to counter China’s dominance in the supply chain.
• Federal Reserve Policy: Discussion around potential shifts in Fed policy under a new chair, focusing on interest rates, quantitative easing (QE), and balance sheet management.
• Volatility Shock (Silver Crash): An extreme, rapid decline in the price of an asset, in this case, silver, driven by speculative positioning and margin calls.
• Breakwave Tanker Shipping ETF: An ETF tracking the performance of shipping rates, seen as a potential beneficiary of geopolitical tensions.

Macro Monday Analysis: ISM, Silver Crash, and Geopolitical Shifts (February 5, 2024)

This Macro Monday session, hosted by Migloval and Andreas, covered a wide range of topics including the recent ISM manufacturing data, the dramatic silver price crash, geopolitical tensions in Iran, and the potential impact of a new Federal Reserve chair. The discussion focused on interpreting these events within the context of broader macroeconomic trends and investment strategies.

1. Positive ISM Manufacturing Data & US Economic Cycle

The session began with a positive note: the ISM Manufacturing Index came in at 52.6, with new orders at 57.1 – a significant jump from the previous month. Andreas highlighted this as a key indicator suggesting a potential bottom in the US investment cycle. He attributed this improvement to the recently opened bonus depreciation window (effective January 19th), a tax incentive designed to encourage capital expenditure (capex). This policy is intended to stimulate the US economy ahead of the midterms. The speakers emphasized that this development has been largely “underappreciated by the market” and represents a cyclical comeback, particularly as the US cycle has lagged behind other regions. Historically, the ISM manufacturing index has been a reliable gauge of investment cycle peaks and troughs. A rise in the ISM index is expected to positively impact assets sensitive to business cycles, including Russell 2000, bitcap, equities, technology, Bitcoin, and base metals. The report suggests a potential 55-point increase in the ISM index within months, driven by strong orders and relatively low inventories.

2. The Silver Crash: A Deep Dive

The discussion then turned to the extraordinary 27% intraday crash in silver prices. Andreas described this as an unprecedented event in modern financial history, exceeding any previous single-day declines. He noted that silver is a relatively large asset class, making the magnitude of the crash even more remarkable. The crash was attributed to a combination of factors: a speculative frenzy (FOMO rally), excessive positioning, and subsequent margin calls. The SLV ETF experienced a trading volume of over 40 billion shares on Friday, roughly 40% of the annual physical silver market. This indicated significant participation from non-traditional investors. The crash triggered margin increases across exchanges (Shanghai and COMEX), forcing fund managers to reduce risk exposure. Andreas pointed out that liquidity proxies in private credit names showed some recovery during the silver crash, suggesting capital may be seeking more efficient homes. Migloval acknowledged that Andreas’s earlier exit from silver proved prescient, though both acknowledged losses in other assets.

3. Geopolitical Tensions & Iran

The conversation shifted to escalating tensions with Iran. Migloval explained that the US is building capacity for a potential strike, similar in scale to operations in Venezuela, but emphasized that this is about creating options for the President, not necessarily an immediate action. Negotiations with Iran are ongoing, focusing on stopping potential mass executions of protesters, the nuclear issue, and, crucially, oil. The US aims to disrupt Iran’s oil supply to China, potentially weakening China’s position and creating opportunities for US companies. A potential outcome could involve Iran’s gradual reintegration into the global market in exchange for reforms. The Breakwave Tanker Shipping ETF was discussed as a potential beneficiary of increased geopolitical risk, though Andreas expressed caution, suggesting it’s primarily tied to a conflict scenario and may not perform well in a more positive outcome.

4. Federal Reserve & New Chair Nomination

The nomination of Kevin Walsh as the new Fed chair was addressed. Andreas characterized Walsh as a loyalist to Donald Trump, connected to his family and likely to prioritize the President’s agenda over purely data-driven decisions. He believes Walsh will likely favor lower interest rates and support a strong economy to improve the Republicans’ chances in the midterms. Walsh’s views align with the “Steven Mirren school of thought,” favoring credit expansion through commercial banks rather than direct Fed QE. This could lead to a shift in asset allocation, favoring real-world investments over speculative assets.

5. Key Arguments & Perspectives

• US Economic Recovery: The speakers are optimistic about a potential US economic recovery driven by the bonus depreciation policy and increased capex.
• Silver as a Speculative Bubble: The silver crash was viewed as a correction of an unsustainable speculative bubble, highlighting the risks of chasing momentum.
• Geopolitical Strategy: The US strategy towards Iran is framed as a broader effort to decouple from China and secure strategic resources.
• Political Influence on the Fed: The nomination of Kevin Walsh suggests a greater degree of political influence over the Federal Reserve.

6. Notable Quotes

• Andreas: “I think this [silver crash] is absolutely bizarre. You could debate whether it’s fair to say that silver is the second biggest asset class in the world… but a drawdown of 30% intraday is unheard of.”
• Migloval: “Trump is trying to do is saying, ‘Okay, we know there’s been a lot of bad blood. We know the Iranian regime is a horrible one, but this is all about pulling them away from China.’”
• Andreas: “Kevin Walsh has been incredibly vocal about the possible economic mix where we see a big productivity boom fueled by technology. So low inflation basically and high growth and the lack of a need to respond to that in interest rate space.”

7. Data & Statistics

• ISM Manufacturing Index: 52.6 (February 2024)
• ISM New Orders: 57.1 (February 2024)
• Silver Price Crash: 27% intraday decline
• SLV ETF Trading Volume (Friday): Over 40 billion shares
• Iran’s Oil Supply to China: Approximately 20% of China’s total oil imports.

Conclusion

The Macro Monday session presented a complex picture of the current economic and geopolitical landscape. While the positive ISM data offers a glimmer of hope for a US economic recovery, the silver crash and escalating tensions with Iran highlight the inherent risks and volatility in the market. The potential shift in Federal Reserve policy under a new chair adds another layer of uncertainty. The speakers emphasized the importance of understanding these interconnected factors and adapting investment strategies accordingly, particularly focusing on decoupling themes and strategic resource allocation. The overall tone was cautiously optimistic, acknowledging the potential for both significant gains and substantial losses in the coming months.