Why is the market already celebrating a Fed speech that hasn’t happened yet?
The peso closed August 25 at 3,056.51 pesos per dollar —its strongest level of the month— after the central bank announced it will buy up to USD 4 billion to shore up reserves and slow the currency’s slide, while holding its policy rate at 12% on a split vote. It has already executed the first USD 400 million tranche, and can keep buying through August 31 as long as the rate stays below its 20-day moving average —in practice, a floor under the dollar. Why it matters: exporters and remittance recipients are converting every dollar into fewer pesos than a year ago; importers and travelers just banked twelve months of a cheaper dollar. As Camilo Suárez of Asoblockchain Colombia put it: “these levels are more floor than ceiling; anyone waiting for an even cheaper dollar just got the official notice that the window is closing.” Today’s real decision isn’t whether the dollar stays cheap —it’s how much longer it has left. We go deeper on why that same cheap dollar is hiding a fiscal hole almost nobody is connecting, today in Off the Clock.
Nvidia reports today — and $200 billion in hyperscaler capex is waiting for it to pay off
Nvidia reports its fiscal second-quarter results today, August 26 —the most closely watched market event of the week, with more than $200 billion in combined capex from Microsoft, Amazon, Google, and Meta still waiting to be justified. Consensus expects guidance near $91 billion in revenue, after a first quarter of $82 billion (+85% year over year). “This is the AI cycle maturing. Investors are saying: we already know what the capex plans are, but we want to know it’s actually going to be monetized,” says Seema Shah, chief global strategist at Principal Asset Management. Two scenarios play out tonight: if guidance beats consensus and margins hold, the market reads it as confirmation the capex cycle still has room to run, and the semiconductor rally gets a second wind. If it disappoints, or the company softens its tone on 2027, Shah’s question stops being rhetorical —and that’s the moment to already know which position you’re trimming, not improvise it at tomorrow’s open.
BofA’s own risk gauge reads 9.3. The sell signal triggers at 8.0.
The noise: Wall Street walked into this week “all in” —cash at record lows (3.5% of assets), equity allocation at its highest since November 2021, and 53% of managers crowded into the same trade: semiconductors, betting Nvidia surprises tonight and Kevin Warsh signals a dovish pivot Friday at Jackson Hole.
The signal: BofA’s own Bull & Bear indicator reads 9.3 —the sell signal triggers at 8.0— and the firm’s chief strategist, Michael Hartnett, reads it as “a market that has already answered every question in front of it.” That dovish read is running ahead of the facts: Warsh’s speech hasn’t happened yet, and he himself described it as “a blank piece of paper.” The real decision: when the entire market is positioned the same way, consensus stops being information and becomes the risk.
“Investors should de-risk or rotate within risk assets, not add to them.”
— Michael Hartnett, BofA chief strategist, August 2026 fund manager survey. Said just as the market awaits tonight’s Nvidia report and, in 48 hours, Warsh at Jackson Hole.