Waiting for what may or may not surprise from Nvidia and the J-Hole.

Welcome to the Saxo market call. Before we get started, it's important we emphasize that the views and opinions expressed in this podcast are those of the host and guests and do not constitute investment advice or recommendations. All information provided is for educational and entertainment purposes. Hey everyone it's Wednesday 26th of August 2026 and yeah of course the big event here is that we have crude oil prices down quite heavily. We're on this front Brent contract and we are rolling into November but the front October contract down some nine plus dollars from the highs that's propagating through markets. A little bit of risk sentiment boost there although that's fading a bit here in Europe today and Wednesday. But we do have a chunkier reaction in one of the critical markets of course and one of the markets been driven but to a large degree by these shifts and energy prices recently and that's of course global bond markets. Europe coming in heavily down yesterday the US as well and we have that 10 year back decently away from the 4.75% really critical top of the range. Of course there's the recent US Treasury buyback attempted intervention and the the whirlwind of controversy around that. What is the intention is is to sign a weakness, is it a shot across the bow that could be backed up by heavier artillery. I sit sort of in the skeptical end of the quality of that attempt to manage expectations and manage the longer term yields in the US but it certainly helps and you wonder if crude oil could drop another 10 bucks if this continues to just sort of park this problem for a while. Why did it drop? Well you have this to the latest headline risk out of the Middle East, Iran, Oman supposedly allowing into quote unquote interim reopening of the Hormuz straight. What does that mean? How does it affect the US's D-Day so-called economic sanctions against Iran? This is all hard to determine but market seeing is a ray of light as well interesting to see how China is posturing against what the US has been threatening. So we need to see what this so-called D-Day policy of total sanctions and sanctions against Iran's so-called Napolars would actually mean for the flow of crude oil. I saw one headline talking about an actual attack on a tanker but yeah what do we do with this? We just follow what crude oil is actually doing which is that it's helpfully fallen 9 to 10 bucks. Pretty underwhelming reaction in equity markets I must say I think the markets are being held back by a couple of really critical event risks so maybe some good reason around that. Those including the Nvidia earnings after the close today. I'll get to that in a moment but as well the the PC inflation data today and most importantly any signals markets begging for them let's see if the market gets them I'm not entirely convinced they will but it could be a massively important event risk certainly the potential is there and that is the Jackson Hole speech from Worsh on Friday. At the same time sort of a geopolitical noise front besides the crude oil price falling in this Chinese response we have this odd situation where apparently CIA director Ratcliffe was loaded on a military plane in Latvia I believe it was and flown into Moscow for some kind of mysterious discussions. What is this all about? What is this a warning? Is this a science that a deal might be near? There's also talks of a general Russian mobilization because there's some key you know pressure on Russia for manpower to mount further or to maintain its presence and maybe to mount and maintain some kind of offensive momentum or develop it there in the war against Ukraine. So it feels like we need to keep an eye on on these geopolitical threads here. Yeah and so the overall session Nasdaq a bit with a half percent the Soxandex was the leader here so you know high momentum vibe to what was going up. The high beta stuff going up the most. S&P more broadly only of 0.3 percent and that that breadth we've talked about some of the negative correlation of some stock components in the S&P 500 with the overall index signs of that in the S&P 500 equal way to being exactly flat very slightly down on the day yesterday. The Russell 2000 was up half a percent. Again we're coming in a little of a weaker here in in Europe. I'm not seeing the proximate cause of that. We have as well of course that we've seen this tremendous gold and bitcoin resurgence. Bitcoin following short of that big big resistance level now which is there the next one I should say the 82.8 000 level that was reached back in late May that's that's a focus there and gold is well kind of stalling out a bit here. I think they're waiting for the signals from Jackson Hole for sure to decide whether to maintain this or to consolidate for a bit here. Copper meanwhile has hit a record high and I'll talk to Ola Henson hopefully tomorrow about that. We also have some grain prices especially corn popping to some major new levels there so it's plenty going on in the commodity space with this massive new volatility in the crude oil price etc. On the earnings front we had a couple interesting names zoom I believe the reaction was negative there I don't really care about the company into it kind of interesting to see how it absorbs the news so decent results it's continuing to grow it's going to grow next year as well and but that target was a couple percent below where the market wanted it and the shares were punished almost 11% yesterday. Now this is a stock that's recovered from like the 260s to the 360s it's a very chunky move off the lows and then again it's 2025 all-time high was at just about 800 intraday certainly relative to growth rates that the company farm were reasonably priced but we're seeing this you know now that we've recovered here the bar has suddenly gotten higher for these companies to surprise to power any kind of further rally and there's more on this software as a service theme to be tested in coming days with the sales force up today worked day on Thursday. But the big one as mentioned is Nvidia I was talking here with Ruben our equity analyst earlier today an equity strategist and his point is that you know the expected move here 5.5 percent not particularly large by Nvidia standards at all over this earnings report the visibility feels a lot better the state of spending etc so I guess if we're going to find some kind of surprises and this is just me not not Ruben talking here it would be in something about the margins or some market just using this as a pivot point to do something I wanted to do anyway maybe the chance for a surprise is somewhat modest but important for the important for Nvidia to pass the test here for for any kind of fresh recovery and market sentiment so far on the sell-off we you know we've stalled out on the downside that the bears are not getting any satisfaction well ahead of the S&P 500 not well ahead but decently ahead of the S&P 500 key first to support levels in the low 76 hundreds so you know what could feed a pivot to a sustained bullish move versus the concerns around seasonality for concerns on well if the Fed isn't a cooperative etc if yields remain high here if the level of bullishness and sentiment extremes have just been too too high for too long and we're just overdo a correction so on the bullish side you could put together some scenario that's called Nvidia passing the test the Fed proves a little bit more dovish or significantly more dovish in some way of hinting than expected on Friday maybe we get a PCE or core reading that's benign as well today and we get another multi-dollar five dollar plus drop in crude oil prices there might be something to sustain things but that's you know requiring a pretty solid menu of a supportive or a lot of ducks to line up in a row let's see if I can figure out a metaphor here to to get that scenario engaging and it may not be enough those the the weight of those other bearish arguments are pasted along a couple podcasts to go in that polemic pain I think a really nice assemblage of signs that we've just gone so far in in this bubble market the overpositioning the clear out of leverage the the fact that those formal momentum sectors haven't reached their their old highs and divergence is there suggesting we could be in for a bit of a waiting period here even if we're not necessarily going into bear market mode all right on the other front the Japanese yen just horribly under under reactive I would say to those hoping that we would see a yen recovery here given that you had a nice crush in yields lower yesterday and that the oil price moving lower and yet the yen can hardly piece together much of a rally do you think that's a bit unfair dolly and trying to stick in here around 159 if the 159 50 highs yesterday I also like the prospects for urean to head lower if we're having benign support from from bond yields not going higher and and maybe even correcting lower still but let's see you need to see something developing volatility-wise to just be able to technically hang your hat on anything so I need to get a decently chunky move that sticks before we start looking for a further follow on again rally then we have the the US Canada trade standoff there's talks of the Trump administration preparing fresh tariffs after can it kind of the basically respond over the tit-for-tat move on the 20 billion dollars of goods and Trump threatening to rename Lake Ontario to of course not very creative Lake America rather than Lake New York because he hates New York because he feels like it's a democratic stronghold so you kind of can't make it up but that's the that's the quality of things and it's just so interesting to follow this debate online with the likes of Michael every pointing out the very sort of rational reasons for a you know the U.S. kind of demanding in this new era of needing a full geostrategic alliance to cobble together an answer to China all the supply chain needs the border security that stretches all the way to the Arctic meaning therefore Canada all this stuff together with the you know the objections around Trump style and the fact that Canada's political leadership has been decided by essentially a reaction against Trump after of course he waited into those threats that saw the sudden rise of carning the polls and then the victory of his party in the election rather than the the conservatives so yeah so whether it's you know the style of this set up and and the way Canada is responding similar to the way U.S. is traditional allies in Western Europe respond also to the same set of needs the same set of well you know if you can't help us you need to help yourselves because we certainly can't afford to help you in the way communicate that message it's similar similar you know style with all of this and where this all leads we understand the U.S. Gambit here does succeed massive massive implications depending on how this turns out for everybody involved we'll continue to track it and I'm trying to you know remain as objective as possible you know understanding the underlying dynamics with this style overlay and the implications of that style overnight meaning you know the sort of the PR how you manage your soft power and how populations that are absorbing that message or style object to it because of for whatever cultural reasons and that becomes into ends up becoming a part of the response function it's really important to consider all of the angles here all right let's drop that for now but the other thing was the Australian CPI stubbornly high and coming in higher than expected I don't have the readings for fun we basically not dropping as expected at the core in fact the month on month core reading popped up to 0.5 there's so-called trimmed mean reading so we saw a big pop in Aussie that's getting further support from these record high copper prices and you know of of course RBA anticipation has been boosted by this and we had Aussie kiwi above $120.50 the Aussie dollar in fact even managing a little new high here even though the dollar view has been sidelined as we await for the key incoming event risks here and those are Jackson Hole are we going to get the signal the market is thoroughly begging for something thoroughly confused on what the Fed's next move is going to be 40% priced for a high conceptember the PCE core is a distraction it's up today it's expected to 0.2% month on month the core if I didn't say core and 3.3% year-on-year unchanged from the June level it's tardy data we we don't know how worse is considering this data point relative to the traditional Fed way of looking at things one thing he supposedly is considering he was prominent in his testimony at the and I think in his nomination hearings is focused on money supply growth and that is saying that back in the you know post pandemic stimulus there or not post pandemic but the the stimulus response to the pandemic clearly showed clearly showed up heavily in money supply growth and should have been a clear signal that in you know bad inflation was coming it hit 5.4% in July that's the highest level since mid 2022 and you know this is staining a the idea that if if this is what we're supposed to be looking at then the Fed should be hiking it's a concern there and then at the same time a Fed hike from somebody that's appointed by Trump who constantly wants the Fed to cut rates and just after the treasury has sent this signal feeble or not panicking or not about the locker certain yields with this buyback increase announcement the notion that's going to throw throw around it's a treasury the treasury general account and it's trillion dollars there to do something about the bond market it's all a swirl of of confusion what and I'm just not sure we get the clarity that we want at the same time as confusion around the entire Fed conference or symposium at Jackson Hole being about these stablecoins and what the implications of taking advantage of that infrastructure might be for the future so it's it's a you know hopefully we're a bit the wiser on friday I'm only about 50 50 convinced that we we might get something interesting that we can actually hang our hats on we had a bifurcated consumer confidence number yesterday the present situation improved a lot from a basically a five year low which was in July but the expectations component dropped heavily that's probably on the oil prices etc so a bit of confusion the overall index slightly changed pretty much unchanged and then we saw a couple of these anecdotal smaller ones the filly the filly a non manufacturing was quite bad in November the rich one was quite quite awful in fact and then we get this sort of dicks sporting goods news I know it's a one-off it's a retail chain and it's mostly linked to their foot locker business maybe consumer consumption patterns are changing in these physical stores are less popular but is this a sign of weak discretionary spending in the sporting goods category Nike was certainly impacted by this specific news and maybe it's a little bit seeing some confirmation with some of these other minor surveys on the other hand we had the august s&p global preliminary services survey quite strong so I don't know it's a lot of mixed evidence Walmart was saying that the average customer is spending less it's just not a good look in any case dicks sporting goods with down 30% it's worth one day performance ever yeah and that really takes me to the end here of the podcast there's so much cross there's so many cross currents cross winds cross fire in the outlook you can just reduce this to the last couple of macro voices appearances if you listen to the guests they both sound enormously competent I'm not gonna throw any kind of shade on their research their slide decks or whatever I will say Darius Dale is a bit of a mouthful with his style I'll say no more you can have listen yourself quite quite positive that the or quite convinced of the Fed is unable to be in any way meaningfully hawkish in a fact will be very inappropriately dovish that's been kind of my baseline here in this podcast just from the dynamics of the debt if you can't hike in than you won't hike but do they actually cut he's quite better they're heading towards finding any excuse for a cut then you listen to Michael how I believe it was the week before the week after I'm forgetting which he's the liquidity expert in the past he's he's had some quite some quite good appearances in predicting market direction very much focused on on these liquidity cycles and he makes the case that we're in a tightening liquidity cycle and that ironically this is caused to a large degree by actually quite strong underlying growth so we have strong growth which actually tightens liquidity and the Fed will actually be forced to hike more than we expect in the tenure and beyond I can't remember that the specific yield levels of the 6% plus I believe I'm not mistaken on the tenure don't don't quote me on that in any case directly saying that the yields have to hire the Fed has to be hawkers and by the way you know right or wrong I do agree with how that if we are headed that direction with interest rates under this under such a scenario that this would be very risky for a hydration assets meaning the stock market so so that that's I think that the the story matches up with higher yields being something that's very very much a threat for the the stock market so it just goes to show you these are you know people that are you know very serious as we attempt also to be and very deeply in the weeds on all of their support for their positions and they come up with two entirely and diametrically opposed it's just characteristic of what you're seeing out there and all along bumbling all along we have this whole AI trade I came across some macro research that was kindly sent to me that was proprietary so I won't discuss who it was from but just really high level stuff that was discussed in that I think you can find in the generally the news flow out there the general ocean was that this AI boom is certainly sets to continue the one of the signs of that being the very strong prices for GPU GPU pencils so that's of course an index where you can track what are people paying for data crunching at data centers that there's still very high prices that this frontier model sort of all the poop pulling around that the people actually can move to these cheaper models whether it's SLMs or whether it's commodified Chinese lower cost models etc is a bit overdone because there's a section of sort of very high end users that are using these frontier models quite intensively And then that the circular financing stuff, and here I I think there's some irony because it's a sort of a circular argument around the power of circular financing. Basically, let's take an Nvidia throwing off these endless tens and hundreds of billions of profits in the coming year plus has plenty to plow back into, of course, more circular financing. But if that's the whole circular financing argument in a nutshell, it's the origins of the first people doing the financing that is the key here. And that's the key question. Meanwhile, we have a drop of galloping towards its IPO. It is outlit and recently with this projections of a $30 trillion total addressable market, Pipping, or how we say it, slightly exceeding SpaceX's own estimates of the total address of the market for its, for AI. So basically, $30 trillion total addressable market, yeah, and be working towards what will be very much an infocus IPO when that is hitting the markets. All right, everyone, I have some big questions to answer in the coming few days. And big questions on whether those questions get answered as well through the end of this week. We'll take it one day at a time. Stay careful out there, and I'll be back tomorrow with the next Saxon market call. [MUSIC] [BLANK_AUDIO]