- All the equally weighted averages are making new highs.
- Humans like good stories more than real numbers.
- It’s just math. Don’t get mad at it.
Math is hard for some people – and we’re grateful for that.
In the market, you don’t need a Ph.D. in mathematics. You just need to know how to add, subtract, multiply, and divide. That’s it.
The fancy name for those? The four basic operations. Their results – sum, difference, product, and quotient – might sound academic, but they’re really just the building blocks of everything we do.
The worst investors on the planet are the ones who overcomplicate things. Trust me, I’ve had a front-row seat for decades. Their complexity is exactly why they end up coming to me.
You’d be amazed how much billion-dollar portfolio managers appreciate the simplicity I’m describing. It’s a breath of fresh air for them – and it should be for you too.
We don’t have to make this harder than it is.
It’s Just Math. Don’t Be Mad at It.
In my experience, it’s not the math that upsets people – it’s what the math represents. When the numbers don’t fit their narrative, it’s easier to dismiss it all as “voodoo” than to look in the mirror and admit they were wrong.
It must be hard watching your ego ruin your life.
I see it every day. It’s painful – for them, anyway. But if it weren’t for these delusional sociopaths, there wouldn’t be nearly as many opportunities for the rest of us to profit.
So should I be mad about it? Or grateful? I’ll take grateful.
Here’s a little math for you:
Coming into this week, more than 150 stocks in the S&P 500 were outperforming the index in 2025. Roughly 40% of Nasdaq components are outperforming the QQQs. And over half the Dow stocks are outpacing the Dow Jones Industrial Average.
How many more do they need before they stop crying about “just a few stocks” driving the market?
Take the Nasdaq Next Gen 100 Index Fund (QQQJ) – it tracks the next 100 largest stocks in the Nasdaq after the Nasdaq-100 (QQQ).
It just closed at new all-time highs yesterday:
So how can it possibly be “just seven stocks” driving the market if none of the top 100 are even in this index, and it’s still breaking records?
The answer is simple: It’s math.
It can’t be just seven stocks.
If you passed second grade, you’re qualified to see it too.
What’s the Problem?
Then there’s the equally weighted index debate. I keep hearing that market breadth is “weak” because the equally weighted indexes aren’t keeping up with the market-weighted ones.
Alright, let’s do the math together and see what everyone’s so upset about.
The equally weighted Dow, S&P 500, and Nasdaq are all putting up historic numbers this year – up 11.5%, 8%, and 11.8%, respectively.
That’s not weak breadth. That’s strength.
Go back to last year – the equally weighted Dow was up 14%, the S&P 500 13%, and the Nasdaq-100 8.8%.
In 2023? They gained 15%, 13%, and 33%.
So again – what’s the problem?
What exactly is so “bearish” about all the major averages, on an equally weighted basis (with those giant stocks taken out of the equation), making new all-time highs and posting above-average returns year after year?
It’s not that these people are bad at math – they just don’t like what the math is saying.
Humans need stories. And when the numbers don’t fit the story, they throw out the numbers.
But the math doesn’t care about feelings, narratives, or CNBC segments. It just is.
And right now, the math says stocks are going up.
You can argue with it if you want.
But you’ll lose – not because I said so, but because the math already decided.
– This winter’s LNG markets are unlikely to replicate last year’s tightness as key Asian buyers have built up sufficient inventories ahead of Q4 2025 and have minimized spot purchases in October.
– South Korea, having imported a whopping 5 million tonnes LNG in August, has been winding up imports in recent months amidst ample stocks, whilst Chinese LNG imports were 15% lower year-over-year in October, tallying just 5.5 million tonnes.
– Japan’s warming season started up later than usual this year as October temperatures averaged 17° C, 2° C above historical norms, with a dip into single-digit average daily temperatures expected only by mid-November.
– Egypt’s sudden policy shift to export LNG has pushed liquefied gas prices in the Mediterranean below $10 per mmBtu, potentially triggering a downward spiral for Asia’s JKM benchmark, too, which currently prices around $11 per mmBtu.
Market Movers
– US oil major ExxonMobil (NYSE:XOM) agreed to farm in to Greece’s offshore Block 2 license covering 598,500 acres, taking a 60% operated interest in the project previously developed by Energean and Helleniq Energy.
– Mexico’s state oil firm Pemex reported an oil discovery with its Xomili-1 exploration well in the offshore Sureste Basin, reaching an initial production rate of 1,670 b/d of light oil.
– Arcius Energy, the joint venture of BP (NYSE:BP) and ADNOC’s XRG investment arm, has entered into a binding agreement with Shell to acquire its 30% operated interest in Egypt’s Harmattan field.
– Workers of Brazil’s national oil company Petrobras (NYSE
BR) rejected the company’s work agreement and moved on to approve a potential company-wide strike, only days after the firm posted a $6 billion net profit for Q3.
Tuesday, November 11, 2025
Flattening backwardation curves and rising floating storage volumes across Asia are reminding oil market participants that the 2026 outlook remains firmly bearish, even if oil prices could see a brief spike in the upcoming days. ICE Brent has been trading within the $63 to $66 per barrel so far in November, a very narrow bandwidth that failed to react in earnest to Lukoil’s force majeure announcement in Iraq.
Chinese Buyers Cool Off on Saudi Buying. Chinese buyers of Saudi crude have nominated the lowest total volumes since April for December delivery, with media reports indicating they China’s refiners will only buy 36.5 million barrels (1.18 million b/d) despite Aramco cutting December formula prices.
Lukoil Calls Force Majeure at Giant Oil Field. Russia’s second-largest oil producer Lukoil (MOEX:LKOH) declared force majeure at its West Qurna 2 oil field in Iraq, currently producing 480,000 b/d, with state oil marketer SOMO cancelling three November cargo loadings.
Wind Projects Are Still Not Making the Cut. London-based energy major Shell (LON:SHEL) has exited two offshore wind projects in Scotland, selling a 50% interest in MarramWind to a renewable utility firm and relinquishing CampionWind altogether, shedding some 5.5 GW of potential capacity.
China Lifts Metals Ban but Keeps Controls. Chinese authorities have suspended their ban on exports of gallium, germanium and antimony to the US; however, Beijing reiterated its right to broader export controls that require shippers to first get export licences from the Commerce Ministry.
Trump Turbo-Boosts US Offshore Licensing. US President Trump approved the upcoming lease sale in the US Gulf of America, offering 80 million acres in previously untapped blocks in the auction set to take place December 10, whilst also signing off on a 2026 Alaska lease sale next March.
Hungary Gets Indefinite Russia Sanctions Waiver. Hungary’s Prime Minister Viktor Orban claimed that the country’s state oil firm MOL has received an indefinite waiver from the Trump administration to continue importing Russian oil and gas, citing its landlocked geographic location.
TMX Dreams Up Another Expansion. Canada’s Trans Mountain oil pipeline is considering an expansion to its current 890,000 b/d throughput capacity to 1.25 million b/d over the next five years, by boosting flows through the Puget Sound pipeline that also feeds HF Sinclair’s Anacortes plant.
Kuwait Needs Gasoline, Urgently. Kuwait’s national oil firm KPC sought a prompt gasoline cargo of 35,000 metric tonnes for November delivery, its second over the past month, as a fire incident at its 615,000 b/d Al Zour refinery last month debilitated large parts of its key downstream asset.
US to Block Energy Agency Layoffs. The legislative package proposed to reopen the US federal government after a 41-day shutdown includes provisions that would block large-scale furloughs in agencies that deal with energy matters, most notably the Federal Energy Regulatory Commission.
Shutdown End Boosts Gold’s Prospects. After three weeks of declines, gold prices have soared on expectations of an impending US government reopening with the bullion reaching $4,140 per ounce again as traders bet that resumed data could strengthen the case for further Fed Reserve cuts.
Indonesia Seeks to Keep More Gas at Home. Indonesia’s Energy Minister Bahlil Lahadalia announced that the Asian country is facing a shortage of 20 cargoes of LNG this year due to higher-than-expected demand, seeking to delay some of its 1 Mt/month export obligations in 2026.
Houthis Signal End to Red Sea Attacks. Yemen’s Houthi militant group has flagged a potential pause to its maritime attacks in the Red Sea, saying it will reinstate its ban on Israeli navigation if Israel resumes attacks on Gaza, suggesting the September 29 attack on a Dutch cargo ship could be its last.
Nigeria to Open New Licensing Round Soon. Nigeria’s oil industry regulator NUPRC announced that the African country would launch its 2025 licensing round next month, focusing on discovered but untapped fields and fallow assets in the Niger Delta, seeking to boost natural gas production.
Any contraction in China’s exports demands attention. There has been drawn-out trade hostility this year as Washington tries to remake the global trade order. Beijing’s growth engine was already weakened by the housing sector’s spectacular slump, and its success in finding other customers for its exports was a lifesaver.
The recently announced 12-month truce offers a respite, but then investors got a surprise. In October, it turns out, China’s export juggernaut contracted for the first time in eight months. A 25% slump in goods sent to the US over the previous year was enough to offset a rise of approximately 3% in shipments to all other nations. For an economy already slowing amid sluggish consumer spending and investment at home, this was shocking:
Or was it? There is evidence of a temporary setback rather than anything more damaging — and the latest trade truce should in any case help exporters over the coming months. Andy Rothman of Sinology LLC argues that there’s no cause for immediate concern, since October had 18 working days compared to 19 in the same month of 2024. Such seasonal discrepancies, he argues, always impact data output.
Louise Loo of Oxford Economics points out that the sudden contraction came after a cyclical high point, which had likely been caused by firms rushing shipments ahead of new tariffs. She argues that the weak October shouldn’t detract from China’s export resilience, which she expects to recover by the second quarter of 2026. Her optimism rests on three pillars.
First, Beijing doubled down on industrial expansion at the recently concluded fourth plenum — a key meeting in the development of the next five-year plan. Second, exporters have embedded themselves in regional and emerging market supply chains.
Lastly, China’s successful use of critical minerals as diplomatic leverageagainst the US should be an effective deterrent that means few trading partners would try to impose substantive retaliatory tariffs. If this scenario holds, it would help quell the growing anti-China dumping rhetoric outside the US, especially in Europe.
Even with the rollback in US tariffs, export growth still stands to be subdued by Chinese standards. But Loo’s revised forecast following the trade truce suggests the deal will make a very big difference:
All else equal, if the truce holds for 12 months, Beijing should achieve its “around 5%” real gross domestic product growth target for 2025 — a goal that consensus deemed nearly out of reach just six months ago. But the country remains uncomfortably reliant on global trade. Gavekal Research’s Andrew Batson points out that roughly a third of recent growth has come from net exports. For all the official talk of a pivot toward domestic demand, the shift so far has been more rhetorical than real.
Policymakers in their latest Five-Year Plan expect manufacturing or exports to form a “reasonable share” of economic growth. By conservative estimates, that should be about 25%. As Oxford Economics shows, success in exports has correlated closely with overall industrial production:
Instead, Morgan Stanley’s Jenny Zheng estimates that halving fentanyl-related levies to 10% could lift China’s export growth by about a percentage point, translating into a 10-basis-point boost to real GDP growth.
Barclays’ Yingke Zhou argues that if exports weaken, China could face a “triple whammy” in combination with the prolonged contraction in the property sector and weak private consumption. But that isn’t the base case:
High-frequency shipping data are showing signs of rebound in exports in early November. Meanwhile, our discussions with some major exporters in the auto sector indicate that they remain quite upbeat on exports in 2026, thanks to the competitiveness of high-tech Chinese products.
As things stand, China appears to have got what it wants, which is control over its own destiny. By using its leverage from rare earths, it has kept US pressure at arm’s length. Now, it needs to unlock stronger domestic demand; the real test will be at home.
Normally, on a day when the S&P 500 rallies more than 1%, you would expect to see most stocks trading higher along with it, but if there’s one group that seems to lag the market every day lately, it’s the homebuilders. Right on cue, the group’s performance today trails the overall market so much so that the iShares Home Construction ETF (ITB) is down on the day, just like it’s down on the year as well.
It’s been a painful year for homebuilders. You have to go back nearly a full year to find the sector’s 52-week high, and from that peak in late November last year through the tariff-tantrum low, ITB plunged over 30%. Through late August, the sector erased most of its prior losses, but it has been a painful fall as Americans remain locked in their current homes because of low-rate mortgages, and most prospective buyers don’t have anywhere near enough money to afford a starter home. This is why the average first-time homebuyer is now a record 40 years old. As shown below, ITB remains stuck in a steep short-term downtrend, below its 200-DMA and much closer to 52-week lows than highs.
It’s been a bad year for homebuilders, but the underperformance versus the market isn’t anything new. The year’s not over yet, but last year, ITB underperformed SPY by an even larger amount than it has YTD. In 2018, ITB underperformed by close to 25 percentage points, and back in 2007, the performance spread was over 60 percentage points in favor of the S&P 500.
Looking at the performance of the ten largest holdings in ITB, YTD returns have been mixed. As its name suggests, ITB is a home construction ETF, so it’s not just made up of homebuilder stocks. Of the top ten holdings, only five stocks would be considered pure-play homebuilders, and only two of them – NVR and Lennar – are down YTD. The worst performing stock of the group has been Lennox International (LII) with a decline of close to 20% YTD, while TopBuild (BLD), another non-homebuilder company, has rallied over 35%. It’s also the only stock listed that has managed to outperform the S&P 500.
Overall, six of the ten stocks shown are oversold, and all but BLD are below their 50-DMAs. For much of the last year, investors in the homebuilding space would say that lower rates would provide a tailwind for the sector. This year, though, the 10-year yield has declined from a peak of 4.8% in January to 4.1% now, and yet homebuilders haven’t been able to get out of their own way.
The overall performance of digital asset treasury firms (DATs) focused on ethereum has been significantly down as shares of these firms are performing worse than their underlying asset in Q4.
Since October, the price of ethereumETH $3,486.50 (-2.46%) has dropped 18% to under $3,500 as of Tuesday morning.
Shares of BitMine Immersion TechnologiesBMNR $40.50 (-1.58%) and SharpLink GamingSBET $11.75 (-1.72%) — the two largest ethereum stockpiling companies — have fallen 20.2% and 31.2%, respectively, in the period. ETHZilla has slid 23.5%, BTCS Inc. has slumped 38.7%, and FG Nexus has decreased nearly 46%, data from crypto analytics firm Artemis shows.
The price action comes as their basic mNAV — a metric that refers to the market capitalization of these firms relative to the value of their crypto asset holdings — is below 1, according to Blockworks Research.
“An mNAV under one limits the ability for DATs to perform accretive dilution, which is the principle that permits DATs to purchase more underlying assets and fulfill their mandate of increasing the asset value per share,” per Gurnoor Narula, a research analyst at Placeholder VC.
Narula told Sherwood News, “DATs start showing cracks when they aren’t able to close that mNAV gap, either because they’ve run out of funds to do so, or the underlying asset is distressed such that investor confidence has waned.”
Bitcoin powerhouse StrategyMSTR $236.30 (-1.08%) has also suffered, declining 26% since October 1, though its mNAV stands just above 1.
Optimism remains, but not deploying any more capital
Kenetic, a blockchain venture capital firm that invested $5 million in ETHZillaETHZ $17.11 (-5.85%), is not deploying more funds at this point, the investment firm’s founder and managing partner, Jehan Chu, said to Sherwood.
However, Chu remains confident in the digital asset treasury model and is “optimistic that when interest rates are lowered and crypto experiences a push, we will see a corresponding surge in DATs including ETHZilla.”
Chu continued, “DATs provide leverage on the underlying assets. In good times it’s great and in bad times it’s terrible — we’re just passing through a bad time.”
jog on
duc
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#November #DDD