David Hunter

David Hunter saw the 25bp hike — the first in three years — as fully priced and correctly executed, with the selloff coming only at the hawkish presser, not the print. With 90% of traders expecting it, “it’s usually not a good idea to go against that,” and Warsh’s talk of price stability as the Fed’s “biggest goal” and policy not being restrictive enough briefly rattled E-minis and small caps. Hunter’s bigger tell: the economy absorbed oil going from the low 60s to over $100 and $6+ diesel with the S&P only ~3% off all-time highs — any selloff should be “pretty short-lived.”

Hunter’s out-of-consensus call: this may be a one-and-done, and rates are at a three-year top. Core CPI at 2.4-something says underlying inflation is contained, 30-year mortgages around 7.17% and possibly above 7.2% are already slowing housing in Dallas, Atlanta and other Southern markets, and the ~52% December-hike odds will “trend down, not up.” Rates around 5.016% have moved just through the October 2023 5% level — “we’re in the area of a top” — and in the coming global bust “you could get a 0% 5-year. I’m either gonna be dead right or dead wrong.”

All melt-up targets stand: S&P 10,000, Dow 70,000, Nasdaq 36,000, Russell ~4,000 — with the only Q3 revision being copper from $8 to $9. His contrarian logic rests on sentiment: Wall Street is full of “closet bears” with “one foot out the door,” and “you don’t get tops when that many people are nervous.” No catalyst is needed — softer data plus lower rates and a weaker dollar can restart the run, and a 35–40% move could happen within four to six months.

The most aggressive call is metals: silver to 200 — “basically a triple” — and gold to 7,000, both within roughly 3–6 months. Silver’s pullback from 72 to 61–62 matched his forecast 10–15% correction and it’s back to the mid-60s; gold bottomed just below 4,000 in July and sits at 4,300. These are “at the top of the performance list for this last run before we top out,” with copper “pretty much a no-brainer” on low inventories, limited supply and data-center demand.

Sector map: SMH to 800 (~40%+ from 543), XLB to 85 (~70% upside), plus financials and biotech/healthcare — while disfavoring consumer staples and utilities. His staples cynicism is structural: cereal went “from $2.50 a box to $7.50” via endless 25-cent hikes — “it’s not a unit growth story” — and the K-shaped consumer is substituting into generics while MAHA pressures names like Campbell Soup.

AI remains the earnings engine, but Hunter warns against straight-lining it: “I’ve got that canyon in between.” He views the recent AI/semis pullback as a good correction and expects higher highs in both, with data-center construction, power, reshoring, Taiwan chip concentration and rare earths providing visibility through the decade — but a “pretty darn big correction in AI” can come before the next cycle when the market tops.

Midterms are the tail risk: if Democrats take both houses with a working margin — court packing, Electoral College abolition and Puerto Rico statehood — Hunter warned, “we could be seeing the end of America as we know it.” The host pushed back that extremes are loud but small in number, and compared it with the left’s fear of a Trump third term. The host later linked the sovereignty concern to a “New World Order.” Hunter remained bullish anyway: “it’s hard for me to believe that the election is going to mark the top.”

🔗 Original source & video: David Hunter: The Fed Just Hiked Rates: Here’s What You Need to Know | The Outlier Podcast