Name: Fed To Trigger ‘1987’ Market Crash This Week? | David Woo
Uploaded: 2026-09-14T20:53:33+00:00
Duration: 2662 s

Speakers

David Woo — Founder, David Woo Unbound

Summary

David Woo, founder and CEO of David Woo Unbound, argues that surging oil prices and rising bond yields are tightening financial conditions and will keep pressuring stocks until the market falls enough to force a policy response. He is short US equities via QQQ puts and long oil, expecting WTI to rise into the midterm elections, while also warning that a Fed hike, AI capex financing strains, and US-China AI tensions could trigger a sharp sell-off. He sees higher Treasury yields, a weaker yen, and pressure on Indian equities as oil remains elevated.

David Woo is short US stocks and long oil.
He expects oil prices to rise until the stock market falls enough for Trump to TACO.
Houthi involvement and Hormuz/Red Sea risks support oil and physical tightness.
He is long a December WTI 95/105 call spread expiring after the midterms.
Rising AI capex and foreign selling pressure long-term Treasury yields higher.
He expects higher oil to weaken the Japanese yen and hurt Indian equities.
He sees a Fed credibility shock and US-China AI/rare earth escalation as key tail risks.
He would avoid the Anthropic IPO at a $2 trillion valuation.

Ideas

David Woo Founder, David Woo Unbound 2:35

Short stocks until oil and yields fall

David Woo is short US stocks, using QQQ put spreads and out-of-the-money puts expiring before the midterm elections. He argues oil and bond yields will keep rising until the stock market falls: Trump will not TACO on oil until stocks fall 10%, and central banks keep tightening because they believe a rising stock market has eased financial conditions. He also sees the AI trade as fragile, with higher rates or a US-China AI/rare earth escalation potentially causing a sharp sell-off.

David Woo Founder, David Woo Unbound 2:35

Long oil on geopolitical supply tightness

He is long oil because oil prices will keep rising until the stock market falls enough to force Trump to TACO. Iran and the Houthis now threaten both the Strait of Hormuz and Red Sea traffic, creating physical tightness in Europe and Asia. Chinese oil imports have recovered two months in a row, Japanese refiners are scooping up oil after being told not to release strategic reserves, and strategic inventories are limited. If the Oman-mediated Hormuz negotiation falls apart, Iran could stop tanker traffic and oil could easily exceed $120.

David Woo Founder, David Woo Unbound 3:10

Short Treasuries; 10-year yields head higher

He expects long-term Treasury yields to keep rising until the stock market falls. Surging AI capex is forcing hyperscalers to issue debt—they are mostly in negative free cash flow and have over $3 trillion of off-balance-sheet commitments—while foreign official demand is retreating: China sells Treasuries every month, Japan is under pressure to repatriate, and Norway’s sovereign wealth fund is cutting US government bond holdings. He thinks Bessent cannot cap the long end with small buybacks and sees the 10-year reaching 5.25–5.30% before the AI trade blows up.

David Woo Founder, David Woo Unbound 6:12

Midterm WTI call spread targets 105

He is long a December WTI call spread with a 95 lower strike and 105 upper strike, expiring the day after the midterm election. He chose this structure because oil has the highest upside before the midterms: Iran knows Trump is politically constrained and has a better chance to force him to TACO, and the option market offers roughly 10x premium if WTI reaches 105. He targets 105 rather than $150 because he has been there before and Trump would likely TACO.

David Woo Founder, David Woo Unbound 14:18

Higher oil weakens Japanese yen further

Japan is a major oil importer and the yen is already the world’s weakest major currency. Higher oil prices worsen Japan’s terms of trade and make it harder for the BOJ and MOF to support the yen. He warns that a yen run would force Japanese institutions to repatriate capital, leading to a major sell-off in US Treasuries and higher global yields.

David Woo Founder, David Woo Unbound 15:06

High oil hurts Indian equities

India is a major oil importer and is hurt by high oil prices through higher inflation, a wider current account deficit, and a weak rupee. He notes the Indian stock market has been one of the worst performers this year mainly because of these oil-related pressures, suggesting it remains unattractive while oil stays elevated.

Fed To Trigger ‘1987’ Market Crash This Week? | David Woo

Summary

Ideas

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