Scouting the Tape - Feb 23, 2026
(Unique) macro idea generation and (insightful) market thoughts.
Hope everyone had a great weekend. Due to recent travel and a busy week ahead, this note is a touch delayed. Luckily, it’s a whole lot of the same from me and my views/positioning haven’t changed. I believe the next few weeks represent a very treacherous period for equities. I am short and patient.
We recorded a live Forward Guidance in Nashville on Friday with Tony Greer and Jared Dillian. The conference was insightful, productive and a lot of fun. I will definitely be back next year and couldn’t recommend it more.
Houston we have a problem (for US stocks)…
Midterm odds are not trending in a great direction for Republicans (and likely risk asset holders).
Why? Well what do all of the newly elected Democratic leaders have in common of late? Tax hikes and AI regulations. Not exactly what you want to see when the S&P 500 is sitting at all-time highs and comprised of a record concentration of AI-related tech companies. And even if you disagree with something here, the fact that the Democrats are gaining traction with some of these policies means the Republicans will have to try to win those voters over by appealing more to them.
AI trade seeing some ‘chinks in the armor’…
In what was a nice little Friday evening news drop, OpenAI announced a large capex guidance reduction. Just a few weeks ago we had a big Friday night news drop that everyone ignored. Not a big deal though, private equity stocks have only fallen -20-30% since then.
Quinn Thompson@qthompWelp guess that 5pm Friday headline explains it...someone always knows. Reminds me of energy stocks the Friday before Venezuela action.
Quinn Thompson @qthompBig private equity charts look like death... $BX $ARES $KKR2:03 AM · Jan 24, 2026 · 44.9K Views7 Replies · 4 Reposts · 76 LikesThe talk of financial X all weekend was Burry’s short AI thesis (which I haven’t read but I think aligns with our views in many ways) but since he’s viewed as a permabear these days it wasn’t that crazy. But then everyone lost their shit when Citrini’s 2028 AI dystopia blog was released. Also haven’t read that but find the response interesting. Half of people think it was the most novel thing they’d ever read and are still happily sitting max long AI plays while the other half got triggered and called it doomer porn while also sitting max long AI plays. I assume it’s awesome and look forward to reading at some point.
Economic reacceleration trade may be overdone in the short-term…
The Fed’s current posture is very much “on hold”…
…which doesn’t at all jive with the ‘run it hot’ narrative. Not to mention we really haven’t seen much in the way of new 2026 fiscal stimulus that myself and many others have expected as part of a midterm buying votes strategy. Still have a long ways until November though. I am long IWM puts.
Quinn Thompson@qthompThere is a growing disconnect between narratives and prices in the market right now. Fed cut expectations are being pushed out while positioning and sentiment reflect increased confidence in the cyclical reacceleration. Small caps are extremely vulnerable here in my view. The
Quinn Thompson @qthompAsking for a friend how small caps are going to perform after everyone piled in long behind the economic reacceleration trade while private credit implodes, the AI capex buffer declines and the Fed remains on hold...7:31 PM · Feb 20, 2026 · 15.4K Views7 Replies · 3 Reposts · 88 Likes
Maximum caution is warranted as we traverse the next few weeks. I don’t think the market is properly priced for the macro environment we are about to find ourselves in. I am bullish on this chart over a long-term time horizon - buy low sell high.
Now that the Olympics have wrapped and the State of the Union on Tuesday night, the door for Iran action may be open this week.
Good luck out there.
