Outrageous Predictions
Executive Summary: Outrageous Predictions 2026
Saxo Group
Read Saxo's Outrageous Predictions for 2026, our latest batch of low probability, but high impact ev...
You can access both of our platforms from a single Saxo account.
Equity valuations, Tesla’s capital raise, watch US tech earnings
Peter Garnry
Chief Investment Strategist
Summary: The rally in equities has taken equity valuations to the highest levels since October 2000 setting the equity market up for a high-risk period during the months of October and November with Q3 earnings and the US election. Tesla announced yesterday a $5bn capital raise to strengthen the balance sheet and support growth which makes a lot of sense given how little the $5bn dilute the existing shareholders. Finally, we are zooming in on five US technology earnings tonight after the US close with a lot of anticipation and speculation in especially MongoDB shares.
The relentless rally in global equities driven by the technology and health care sector has pushed equity valuation on the MSCI World Index to 1.31 standard deviations above the average since 1995. This is the highest level since October 2000. The jump in valuation is naturally driven by the combination of collapsing earnings and cash flows, and the strong bet on a sharp rebound in economic activity. This means that the Q3 earnings in October and November will be crucial for the equity market. The earnings season happens to collide with this year’s US election setting the market up for a high-risk period over this two-month period. The October monthly contract on VIX futures has moved up to 33.4 which is a quite elevated level for expected volatility.
Back on July 8 we tweeted that Elon Musk, the CEO of Tesla, should consider taking advantage of the high equity valuations of Tesla’s shares and issue equity capital to accelerate growth even further.
Less than two months following our thoughts Tesla announced an equity distribution pact worth $5bn meaning that the company can issue new shares “from time to time” with the intention to use the proceeds to strengthen its balance sheet and fund growth. The world’s leading EV-maker is expanding rapidly having just finished a manufacturing plant in Shanghai and is expanding with new factories in Germany and Texas. The news caused its shares to decline by almost 5% yesterday which is significantly above the dilution effect from the new shares. In the option market a lot of activity is still visible on the $500 strikes with heavy call option volume on the expiration date on Thursday. This means that today’s price action will even more exciting.
Today a small group of US technology companies will report earnings after the close. The companies are Crowdstrike, Copart, MongoDB, Guidewire and Smartsheet. What we have observed over the past couple of weeks is that US technology companies reporting earnings have seen speculative rallies into the releases, so potential behaviour could happen again in today’s session. Of the companies reporting today especially MongoDB stands out with a 31% rally since 10 August. It seems investors are betting heavily that analyst estimates are way off expecting revenue only to grow 28% from a year ago following a 46% growth in FY21 Q1 (ending on 30 April) which showed robust revenue generation despite COVID-19.
Latest Market Insights
Outrageous Predictions 2026
-
-
Outrageous Predictions
A Fortune 500 company names an AI model as CEO
Charu Chanana
Chief Investment Strategist
Can AI be trusted to take over in the boardroom? With the right algorithms and balanced human oversi... -
Outrageous Predictions
Despite concerns, U.S. 2026 mid-term elections proceed smoothly
John J. Hardy
Global Head of Macro Strategy
In spite of outstanding threats to the American democratic process, the US midterms come and go cord... -
Outrageous Predictions
Dollar dominance challenged by Beijing’s golden yuan
Charu Chanana
Chief Investment Strategist
Beijing does an end-run around the US dollar, setting up a framework for settling trade in a neutral... -
Outrageous Predictions
Obesity drugs for everyone – even for pets
Jacob Falkencrone
Global Head of Investment Strategy
The availability of GLP-1 drugs in pill form makes them ubiquitous, shrinking waistlines, even for p... -
Outrageous Predictions
Dumb AI triggers trillion-dollar clean-up
Jacob Falkencrone
Global Head of Investment Strategy
Agentic AI systems are deployed across all sectors, and after a solid start, mistakes trigger a tril... -
Outrageous Predictions
Quantum leap Q-Day arrives early, crashing crypto and destabilizing world finance
Neil Wilson
Investor Content Strategist
A quantum computer cracks today’s digital security, bringing enough chaos with it that Bitcoin crash... -
Outrageous Predictions
Taylor Swift-Kelce wedding spikes global growth
John J. Hardy
Global Head of Macro Strategy
Next year’s most anticipated wedding inspires Gen Z to drop the doomscrolling and dial up the real w... -
Outrageous Predictions
SpaceX announces an IPO, supercharging extraterrestrial markets
John J. Hardy
Global Head of Macro Strategy
Financial markets go into orbit, to the moon and beyond as SpaceX expands rocket launches by orders-... -
Outrageous Predictions
China unleashes CNY 50 trillion stimulus to reflate its economy
Charu Chanana
Chief Investment Strategist
Having created history’s most epic debt bubble, China boldly bets that fiscal stimulus to the tune o...