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*                       FIEND'S SUPERBEAR MARKET REPORT                     *

*                                November 12, 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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Wall Street Wants to Skip the Bust

Wall Street needed only one session to recover its enthusiasm after another disappointing inflation report.

The Nasdaq rallied 1.6% Wednesday, the S&P 500 gained 1.3%, and the Dow advanced approximately 255 points. The S&P finished just 2.6% below its October record. Last week’s liquidation is rapidly becoming something investors would prefer to forget.

Technology led the recovery. CoreWeave surged nearly 25% after its results and outlook encouraged investors to believe that demand for AI computing remains strong. Semiconductor stocks jumped 5.7%, providing another demonstration of how quickly buyers return when offered reassurance about the AI spending boom.

The inflation report did not improve overnight. The possibility of additional tightening did not disappear. Investors simply found something more enjoyable to concentrate on.

A Few Hikes, Then Back to Cutting

The VIX fell another 10% to 17.49, extending its retreat from last week’s spike. That does not prove investors believe the Fed has inflation under control, but it certainly suggests they are not preparing for a prolonged confrontation between monetary policy and stock prices.

The apparent assumption remains familiar: a few modest rate increases, some improvement in inflation, and eventually a return to everyone’s favorite part of the cycle.

Rate cuts.

Wednesday’s pricing assigned approximately 87% odds to a quarter-point December hike and 12.9% to a half-point increase. The larger move has become a credible possibility, but it remains the minority expectation.

There are signs that the expected tightening cycle is getting longer. Goldman Sachs added a March hike to its forecast after previously expecting December to mark the end. Deutsche Bank projected another increase in January.

Yet stocks rallied anyway. Investors appear willing to absorb another quarter point here or there, provided the destination remains easier money.

The possibility that inflation could require a more sustained response still seems to receive considerably less attention.

Inflation Can Help the Numbers—For a While

There is a reason stocks do not automatically collapse when inflation rises.

Companies sell goods and services at current prices. Businesses with sufficient pricing power can raise revenue in dollar terms and sometimes preserve or expand profits. Their shares may continue climbing even as the purchasing power of those gains deteriorates.

That can support stocks for a time. A rising market does not necessarily mean the economy is becoming healthier or that investors are becoming equally wealthier after inflation.

The difficulty comes when costs outrun selling prices, customers begin resisting increases, or financing becomes expensive enough to restrict investment and consumption. Inflation can hurt stocks before the Fed acts decisively. Serious monetary restraint adds another source of pressure.

For now, Wall Street seems comfortable assuming those pressures will remain manageable. Inflation is bad enough to keep nominal revenues growing, but apparently not bad enough to force an extended campaign against demand.

That is an attractive combination for investors—if it lasts.

The Political Cost of Applying the Brakes

Fighting inflation becomes politically difficult precisely because effective restraint can be uncomfortable.

Higher borrowing costs discourage purchases. Slower demand makes hiring less attractive. Businesses that expanded on the assumption of easy financing discover that their projections no longer work.

Few politicians want to take credit for any of that.

The temptation is to wait for cheaper energy, improving supply or some other favorable development to do the work. Sometimes that patience is justified. Sometimes it allows inflation to become harder to dislodge.

The current numbers are troubling, but they are not yet catastrophic. That leaves room for policymakers to argue over timing, magnitude and how much improvement may already be coming.

The danger is that the political cost of acting today keeps postponing action until the economic cost becomes much greater.

We have already had months of renewed inflation pressure and only one quarter-point increase in this cycle. The Fed may yet bring prices under control with relatively little additional tightening. Wednesday’s stock market certainly behaved as though that remains the most comfortable assumption.

Gold Gets Less Benefit of the Doubt

Gold received a much colder reception.

Spot prices fell about 1.1% to roughly $3,987 in Wednesday afternoon trading as the dollar strengthened and investors weighed the possibility of a larger December hike. Silver surrendered much of its earlier rebound, although Reuters’ afternoon snapshot still showed it modestly higher on the day.

The contrast is striking. Stocks are looking toward eventual monetary relief. Gold is being marked down for the tightening that may come first.

Neither market is necessarily predicting the entire cycle correctly. Higher rates and a stronger dollar can pressure bullion in the short run even while persistent inflation supports the longer-term argument for owning it.

Treasury cash markets were closed Wednesday for Veterans Day, so there was no fresh cash-bond verdict to accompany the equity rally. Thursday’s reopening will provide another test of whether stocks and bonds remain comfortable with very different interpretations of the same inflation problem.

Nvidia’s Recovery Runs Into Another Headline

Then came the after-hours interruption.

Reports of a second alleged relationship involving Jensen Huang, this time with a senior Nvidia executive, were followed by reporting that the board was preparing to consider his removal. Reuters relayed the New York Times and Wall Street Journal reports while noting that it could not independently verify them and that Nvidia had not immediately commented.

Shares fell roughly 8% after hours. One reported snapshot put the stock near $159, a level consistent with a valuation below $4 trillion if sustained, using the company’s roughly 24 billion shares outstanding. That would be a substantial psychological reversal for the company at the center of the AI boom.

Huang’s departure was not confirmed in those reports. But the threat to his tenure has plainly become more serious.

The market issue extends beyond personal conduct. Nvidia’s strategy, relationships and public identity have been closely associated with its founder. An abrupt leadership transition would introduce uncertainty at a particularly difficult moment for AI valuations.

The chips would still exist. Customers would still need computing capacity. But investors would have to decide how much of the premium they assigned to Nvidia depended on the person running it.

Wednesday’s rally showed renewed confidence in AI demand. Thursday will test how well that confidence survives another potential leadership shock.

The Bust Is Always Somebody Else’s Forecast

Friday’s PPI report remains the next major inflation test. Another upside surprise would make it harder to dismiss the CPI disappointment and could increase support for a larger December move.

For now, investors are embracing a much more pleasant sequence: resilient earnings, manageable inflation, limited tightening and eventual cuts.

That outcome is possible. It is also the outcome the market repeatedly wants to believe in near the uncomfortable part of a cycle.

The problem is that rate cuts can arrive for reasons investors do not enjoy. Falling earnings, tighter credit and rising unemployment can produce easier policy without producing an immediate recovery in stocks.

Wall Street is already looking forward to the relief.

It still appears to expect that the bust can be skipped.

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