The S&P 500 has surged to new all-time highs, even as the market contends with war, inflation, softening GDP, and tariff reversals. With about 80% of companies in the index having reported earnings and nearly 90% beating EPS estimates, investors are pricing in optimism ahead of key inflation data. The hosts of DH Unplugged, Andrew Horowitz and JC Dvorak, examine this phenomenon in Episode 813, titled 'Fear and Greed,' published on August 11, 2026. They discuss why the market is rallying despite mixed signals and whether the CNN Fear and Greed Index, currently near 61, indicates froth or a contrarian opportunity.
The episode delves into several fast-moving threads shaping the tape this week. Horowitz and Dvorak analyze the components of the Fear and Greed Index, including Tom McClellan's Volume Summation Index and Horowitz's proprietary KRI (Key Reversal Indicator). They also review Friday's jobs report, which showed unemployment at 4.1% but only 20,000 payrolls added, alongside a shrinking labor participation rate. Oil's rebound after Scott Bessent's failed deal timeline is discussed, as is a profitable client trade that Horowitz doubled up on.
Trade policy remains a focal point, with new 10 to 12% tariffs on 60 trading partners, 25-state lawsuits, and Nike's reported tariff refund. The hosts also examine mega-cap free cash flow swings, which have been dramatic. Apple's free cash flow rose roughly $7.5 billion, or 31%, while Microsoft fell about $6 billion. Meta collapsed 91% on Mark Zuckerberg's renewed AI spending, and Amazon swung $25 billion from positive $18 billion to negative $7.6 billion. Alphabet flipped negative, Tesla turned to a $1.09 billion outflow, and Intel worsened by $7.37 billion after a $20 billion secondary. Nvidia bucked the trend, adding $22.5 billion, and the hosts cover SoftBank's $2.2 billion quarterly profit driven by Masayoshi Son's Intel stake.
The conversation turns candid on behavioral finance, with Horowitz citing Daniel Crosby's work on loss aversion. "When people are freaking out, it's usually the time to get in. When people are like, oh my God, it's never gonna get worse, the market rally is gonna continue forever, it's like time to get out," Horowitz tells listeners. Dvorak pushes back, asking why proprietary signals used by shops like Jane Street stay private while retail-facing indicators become content. Horowitz's answer: "It's content. That's what it seems like to me at least."
As the market continues to climb, the hosts provide a balanced view of the risks and opportunities. They discuss the implications of the upcoming CPI and PPI releases, which could either validate or challenge the current optimism. The episode also includes a heartfelt recap of the Fort Lauderdale meetup honoring the late John C. Dvorak, attended by roughly 35 listeners from across Florida. For more insights, listeners can access Episode 813 on the DH Unplugged website, Apple Podcasts, Spotify, and Amazon Music/Podcasts.
