Finding the Market’s Most Overlooked Macro Themes and Profiting from Global Volatility | Harris Kupperman

The most overlooked macro theme in today's volatile markets isn't geopolitical tension or inflation—it's structural supply shortages in critical infrastructure. Harris Kupperman and Roderick Van Zoylen of Kenham Research reveal how the global refining sector has entered a rare 'tight' cycle, not due to war alone, but because of a decade-long drought in new refinery capacity. Despite a balanced-looking supply-demand picture, utilization rates in key regions like the U.S. and Mexico are far below optimal, creating a hidden imbalance. The crack spread—refiners’ profit margin—has doubled since late 2025, turning once-mediocre refiners into cash flow machines. The real trade? Not betting on war duration, but on the absence of new refinery announcements, which signals that the market still believes the tightness is temporary. This structural imbalance, they argue, will persist for years, making long-term exposure to large, efficient refiners like Marathon and Valero a powerful macro play. Beyond refining, the duo highlights a parallel inflection in Latin America, where a political shift from leftist to pro-business leadership—driven by a MAGA-aligned dollar decline—has unlocked a financial renaissance. Brazil’s rate cuts and collapsing approval ratings for Lula have triggered a surge in equity trading volume, fueling a reflexive rally in financials like B3 and XP.