Largest Single Day Declines in Gold Silver, Palantir & Disney Report

Good morning investors,

My silver call from last week proved to be one of my biggest in a long time. I warned that silver's parabolic move had gone too far, with too many retail investors posting across social media about the metal. I called for a pullback to $80. I didn't expect it to happen within days. Silver crashed 31% Friday, its worst single day performance since 1980, while gold dropped 11% in the largest one day dollar decline on record for both metals.

The Warsh nomination provided the catalyst, but the setup was there. Parabolic moves eventually correct, and when they do, the violence can be extraordinary. We are seeing some of the most extreme volatility I've witnessed in a while, and every bear and end of world caller is coming out of the woodwork. I expect continued volatility, but that is precisely when opportunity arises.

S&P 500 ($SPY ( ▲ 0.5% )) futures down 0.4%, Nasdaq ($QQQ ( ▲ 0.75% )) futures off 0.8%, and Dow ($DIA ( ▲ 0.23% )) futures losing 35 points as the precious metals carnage ripples through risk assets. Bitcoin dropped below $80,000 for the first time since April, adding to the risk-off sentiment.

Gold ($GLD ( ▲ 2.25% )) and silver ($SLV ( ▲ 5.61% )) are bouncing around this morning and remain volatile. Both are down 2% as i write this. The damage from Friday's historic selloff will take time to fully digest.

ISM manufacturing PMI arrives this morning with expectations at 48.5 versus 47.9 prior, providing a read on the industrial economy.

The market is acting like the debasement trade ended with Kevin Warsh set to step in at the Fed, but the knee jerk reaction doesn't change the math of a $37 trillion mountain of debt.

Since Warsh's name hit the news, bitcoin has declined more than 6% to trade below $79,000, while spot gold and silver dropped roughly 9% and 29% respectively. The financial world responded as if Warsh, historically hawkish but newly dovish, can single handedly restore the dollar's stature and kill the debasement trade.

This belief that one central banker can have this much sway will have limited staying power. A changing of the guard at the Fed doesn't erase historic government debt and the challenges of the fiscal outlook. While Warsh is expected to prioritize shrinking the Fed's bloated balance sheet, he still faces a political system and economy pushing in the opposite direction.

Selling hard money assets on expectations for Warsh to bolster the dollar feels near sighted. No matter who's in charge at the Fed, the institution is constrained by the real and political costs of servicing the debt.

In isolation, it looked like the debasement trade ended Friday. Warsh seems genuine in his hard money ambitions and may steer the conversation productively. But unless fiscal policy follows suit with shrinking deficits, less debt growth, and political willingness to accept regime change, the long-term theme of currency debasement isn't going away.

I had made calls for Silver and Gold to pullback as I explained above, but don't take that as me saying they don't have a place in the long term portfolio, gold in particular, I just didn't like Silver at $115-120 at all.

Gold and silver got truly parabolic and reached the end of their moves in my view. Both became extremely overbought. I think both could do well longer term, but often following a large correction there are a series of smaller ones prior to a sustainable bounce. Don't expect a V-shaped recovery.

Friday's selling was catalyzed by the Warsh nomination, but CME margin increases announced January 30 that took effect after Friday's close will add additional pressure. Margin hikes force leveraged traders to either post more capital or liquidate positions, typically extending selloffs.

The selloff gripped the wider precious metals market with spot platinum down more than 14% and palladium falling close to 12%. Mining stocks got crushed globally with Fresnillo down 7%, Endeavour Silver losing nearly 15%, and silver ETFs facing double-digit declines.

Despite the carnage, gold and silver remain higher over the past year by 80% and 209% respectively. The secular case for precious metals hasn't changed, but violent corrections are part of parabolic advances.

Friday's employment report takes center stage with economists expecting 65,000 jobs added in January and unemployment holding at 4.4%. Job growth was substantially weaker in 2025 than the prior year, with 584,000 additions compared to 2024's 2 million, yet GDP grew at 4.4% annualized in Q3. That divergence raises questions about where productivity is coming from and whether AI is beginning to show up in the macro data.

Alphabet and Amazon report Wednesday and Thursday respectively, completing the Magnificent Seven earnings parade. Like their peers, both are expected to boost capex estimates as they jockey for position in the AI infrastructure arms race. Investors will watch whether they get the Meta treatment of approval for spending or the Microsoft treatment of punishment.

AMD reports Tuesday, providing another read on semiconductor demand and AI infrastructure trends. Palantir reports today, offering insight into enterprise AI adoption.

Disney beat fiscal Q1 expectations with adjusted EPS of $1.63 versus $1.57 expected and revenue of $25.98 billion versus $25.74 billion forecast. The experiences unit reported more than $10 billion in quarterly revenue for the first time, accounting for $3.31 billion in operating profit, three times the entertainment division's $1.1 billion.

Domestic theme parks recorded $6.91 billion in revenue with international parks at $1.75 billion, each up 7% year-over-year. The company saw attendance rise at domestic parks while international visitation remained softer.

Streaming revenue grew 11% to $5.35 billion, and the theatrical unit benefited from Zootopia 2 and new Avatar and Predator installments. Disney expects Q2 streaming operating income of around $500 million, up $200 million from last year.

The experiences unit is clearly the profit driver, and the succession question looms large. Josh D'Amaro, chairman of Disney Experiences, and Dana Walden, co-chairman of Disney Entertainment, are seen as frontrunners. The board meets this week and is expected to vote on Iger's successor.

Oracle announced plans to raise $45 billion to $50 billion in 2026 to build additional cloud infrastructure capacity for customers including AMD, Meta, Nvidia, OpenAI, TikTok, and xAI. The funding will come through a combination of debt and equity, including mandatory convertible preferred securities and a $20 billion at-the-market equity program.

Shares fell more than 3% as investors assess the rising debt load. This tests the market's willingness to finance AI infrastructure buildouts that many view with skepticism. The contrast with Meta's approval and Microsoft's punishment for similar spending announcements shows execution and business model matter enormously.

Last week's earnings from four Mag Seven companies crystallized the bifurcation I've been discussing. Microsoft dropped 10% despite beating estimates as Azure decelerated and capex exploded. Meta surged 8% on similar massive spending because the ad business delivered 24% revenue growth. Apple climbed on record iPhone revenue and China's stunning 38% rebound. Tesla rose on Optimus timelines despite the core EV business declining.

Software stocks faced heavy selling pressure after SAP and ServiceNow results failed to calm fears that traditional software is losing ground to AI. The sector is grappling with whether AI enhances their businesses or disrupts them.

The laggards of last year remain the leaders of 2026. Energy is up 14% year-to-date, materials up 8.6%, and industrials up 6.6%. The S&P 500 added 0.3% last week to 6,939, bringing 2026 gains to 1.4%.

The Wall Street Journal reported that Nvidia's plans to invest $100 billion into OpenAI have stalled, with chipmaker executives expressing doubt about the deal. CEO Jensen Huang denied being unhappy with OpenAI, calling the report "nonsense" and saying Nvidia plans to make a "huge" investment, probably its largest ever.

The original $100 billion agreement was non-binding, and any actual investment will likely be substantially smaller. But the story highlights ongoing questions about the circular nature of AI infrastructure spending, where the biggest customers are also the biggest suppliers.

I have said repeatedly that I expect volatility this year and anticipated a 10% to 20% intra-year drawdown before finishing higher. What we're witnessing now, with historic precious metals crashes, 10% single-day drops in trillion dollar companies, and dramatic divergence within sectors, is exactly that volatility manifesting.

The S&P 500 remains up 1.4% for the year. Big Tech earnings largely beat expectations. The Fed is on hold with no hikes contemplated. The economy continues growing while inflation moderates. None of the fundamental pillars have cracked.

The bears and end of world callers emerging now were absent during the relentless rallies of the past two years. Their appearance typically marks opportunity rather than danger. Pullbacks in bull markets are for buying, not panicking.

My silver call validated last week in dramatic fashion. The metal crashed from extended levels exactly as the setup suggested, with retail mania and parabolic price action creating the conditions for violent reversal. Gold followed, and the entire hard money complex repriced in a single session.

But one violent correction doesn't end a secular trend. The $37 trillion debt mountain, fiscal deficits running 6% to 8% of GDP, and structural currency pressures remain regardless of who chairs the Fed. Warsh may prioritize balance sheet reduction and sound money principles, but he inherits an institution constrained by the same political and economic realities that limited his predecessors.

Expect more corrections in precious metals before any sustained bounce. Often large crashes are followed by a series of smaller declines as leveraged positions unwind and weak hands exit. The long-term case for gold remains intact, but patience is required.

This week brings Alphabet, Amazon, AMD, and a critical jobs report. Earnings growth is tracking to be the strongest in four years despite the high-profile selloffs. The broadening rally in cyclicals and small caps continues validating the rotation thesis. The Warsh nomination removes one uncertainty even as it creates new questions about Fed policy direction.

Volatility creates opportunity for those with the discipline to act when others panic. The end of world callers were wrong in 2023, wrong in 2024, wrong in 2025, and they're likely wrong again now.

As always, feel free to reach out with questions about positioning.

Dan Sheehan

[email protected]

This newsletter is for informational purposes only and should not be considered as investment advice. Please consult with your financial advisor about your specific situation.