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*                       FIEND'S SUPERBEAR MARKET REPORT                     *

*                                November 9, 2026                           *

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*                       e-mail: fiendbear@fiendbear.com                     *

*                    web address: http://www.fiendbear.com                  *

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Fiend Commentary
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The Cracks Reach the Top

Wall Street managed to regain its footing Friday after Thursday's spectacular technology selloff. The Nasdaq rebounded 1.1%, the S&P 500 gained 0.3%, and the Russell 2000 advanced nearly 0.9%. The Dow slipped modestly, but the sense of panic that had accompanied the previous session was noticeably diminished.

The VIX retreated from Thursday's spike above 28 to approximately 25.6. That remains elevated, but the market has not displayed the kind of extreme volatility associated with a full-scale financial panic.

Despite Thursday's liquidation, the major averages are still well above the levels of previous years. The Nasdaq has entered correction territory, but a broad bear market has not developed. Even last week's enormous losses were relatively orderly compared with some previous market routs.

Then, over the weekend, another problem emerged.

And it involved the company at the very center of the artificial intelligence boom.

Nvidia's Worst Possible Headline

Nvidia announced Sunday that its board has opened an independent investigation into reports that CEO Jensen Huang may have been targeted by a foreign intelligence operation.

The investigation followed allegations involving a relationship with a businesswoman whom American authorities reportedly suspect of working for Chinese intelligence. Huang acknowledged an extramarital affair, while Nvidia emphasized that it has no reason to believe company secrets or national security were compromised.

Those distinctions matter. The allegations remain under investigation, and there has been no established finding that confidential information was improperly disclosed.

Nevertheless, the timing could hardly be worse.

Nvidia shares had already suffered substantial losses as investors questioned the sustainability of the AI investment boom. Now uncertainty surrounds the company's founder, its leadership and potentially its relationships with Washington and Beijing.

Nvidia fell more than 3% in overnight trading following the announcement.

This is not merely another corporate scandal.

Nvidia occupies an unusually sensitive position in the technological competition between the United States and China. Its advanced processors are among the most sought-after products in the world, and Washington has spent years restricting Chinese access to the most sophisticated equipment.

Any investigation touching national security could invite additional congressional scrutiny, regulatory uncertainty and questions from major customers.

It could also complicate the company's efforts to maintain its extraordinary growth.

Nvidia's board has expressed confidence in Huang, and an investigation does not establish wrongdoing. But investors now have another uncertainty to evaluate at a company whose market capitalization has recently approached $6 trillion.

After weeks of selling, the AI bubble hardly needed another reason for investors to become nervous.

A Strong Jobs Report Changes the Fed's Options

Friday's employment report also complicated the outlook.

October payrolls increased by 165,000, considerably stronger than the approximately 65,000 expected. Unemployment unexpectedly declined to 4.1%.

That was not the report investors anticipating an imminent economic slowdown wanted to see.

The stronger numbers pushed the probability of another December rate hike back toward 80%, after expectations had fallen into the 60% range during Thursday's market collapse.

The Fed suddenly has another reason to tighten.

Employment is still growing. Unemployment remains relatively low. Inflation continues running well above the 2% target.

Yet the stock market is becoming increasingly fragile, and some of the companies responsible for this year's extraordinary gains are already experiencing severe corrections.

Warsh's dilemma has not improved.

The Fed has raised rates only 25 basis points during the renewed inflation upswing. Another quarter-point increase in December remains the favored outcome, but we have already watched expectations shift dramatically several times this year.

There is also weakness hidden beneath Friday's headline employment number.

Workers who lose their jobs are taking longer to find replacements. The average duration of unemployment has reached levels not seen in roughly a decade outside the pandemic period. Hiring remains uneven across industries.

That suggests an economy that may be holding up reasonably well in aggregate while becoming considerably less forgiving for individuals who lose their employment.

The stronger payroll report buys the Fed some confidence that the economy can absorb additional tightening.

It does not guarantee that the confidence is justified.

Oil Finally Offers Some Relief

The most encouraging development has been the remarkable collapse in oil prices.

Brent crude fell roughly 16% last week, its largest weekly percentage decline since the pandemic, and moved below $98 in early Monday trading.

The reason is growing optimism that the Middle East conflict may finally be approaching a diplomatic resolution.

President Trump indicated that additional American attacks on Iran were unlikely as long as negotiations continued making progress.

That is welcome news after months of extraordinary gasoline and diesel prices.

But the market may be getting ahead of the facts again.

The war has not ended. Shipping remains vulnerable around the Strait of Hormuz, and negotiations have not produced a comprehensive agreement.

Even a successful settlement would not instantly eliminate the accumulated economic damage.

Higher transportation costs have already moved through supply chains. Businesses have raised prices or absorbed reduced profit margins. Consumers have spent months diverting income toward energy instead of discretionary purchases.

Lower oil would eventually help considerably.

The danger is assuming that lower crude prices immediately translate into a return to inexpensive gasoline, lower grocery prices and falling inflation.

There is a substantial lag between the price of a barrel and the prices consumers actually pay.

Still, a sustained decline in oil could become the most important economic development of the next several months.

It would provide the Fed with something it has been unable to accomplish through monetary policy alone: meaningful relief from the energy-driven component of inflation.

The VIX Hasn't Finished Its Work

Perhaps the most interesting aspect of last week's stock market collapse was the absence of an extreme volatility spike.

Thursday's selling was enormous. The Nasdaq suffered one of its worst sessions in years, semiconductor stocks were crushed, and nearly every sector declined.

Yet the VIX peaked in the high 20s rather than reaching the 40s, 50s or higher levels associated with historic capitulations.

Friday's rebound brought volatility down again.

There are two interpretations.

The encouraging one is that the financial system remains stable. Investors are reducing exposure to speculative assets without a generalized liquidation of everything they own.

The less encouraging possibility is that there is still plenty of complacency remaining.

Markets seldom move straight down. Even prolonged bear markets produce powerful rallies as short sellers cover positions and investors purchase stocks they believe have become bargains.

The real test will be what happens after the next rebound.

If the Nasdaq recovers its broken technical levels and the semiconductor stocks begin establishing higher lows, last week's collapse may prove to have been an exaggerated correction.

If rallies repeatedly fail while the VIX remains elevated, the larger downtrend may only be getting started.

The Nvidia investigation now adds another variable to that equation.

Bitcoin Gets Another Warning

Cryptocurrencies provided their own demonstration of nervousness over the weekend.

Bitcoin briefly dropped below $74,000, its lowest level since August, before recovering toward $75,000.

More than $1 billion in leveraged cryptocurrency positions were liquidated over a 24-hour period.

That is not particularly reassuring for an asset frequently presented as an alternative to the traditional financial system.

When speculation becomes uncomfortable, Bitcoin often behaves more like a high-risk technology investment than a safe haven.

Gold and silver have performed somewhat better following their recent lows. Gold has recovered above $4,000, and silver has held the important $50 area despite months of weakness.

The metals still face uncertainty from interest rates and the dollar, but their longer-term monetary arguments remain intact.

Bitcoin's continued weakness suggests speculative investors are considerably less enthusiastic about taking additional risk.

November's Next Test

Tuesday brings another CPI report, with producer prices arriving later in the week.

Those figures may prove more important to the December Fed decision than Friday's employment surprise.

If inflation continues accelerating despite the recent decline in oil, Warsh will have considerably less room to postpone further tightening.

If inflation begins moderating, the bond market could extend its recovery and give the economy some badly needed breathing room.

But the immediate challenge for stocks is different.

The AI boom has been the dominant force in Wall Street's advance. The market has rewarded extraordinary capital expenditures, assumed remarkable future earnings growth and tolerated valuations that leave little room for disappointment.

Now investors are questioning the investment economics, the financing requirements and, in Nvidia's case, the uncertainty surrounding the leadership of the industry's most important supplier.

The blue-wave rally has already faded.

Friday's employment report revived expectations for another Fed hike.

Oil's collapse offers some welcome hope for inflation.

And the VIX suggests investors are nervous without having reached a state of outright panic.

There is still no certainty that the recent technology correction develops into a prolonged bear market.

But the pattern is becoming difficult to dismiss.

The speculative leaders have weakened. The bond market has attracted safety-seeking investors. Bitcoin remains under pressure. And now Nvidia has a potentially serious leadership distraction at the very moment the AI investment boom is facing its greatest scrutiny.

The market has survived the first major liquidation.

The question for November is whether the remaining confidence can survive what comes next.

                                      

 

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