11ukM

London QT – 10 July – Nvidia, Nasdaq, Bitcoin ATHs: Bubble?

Equities 3 minutes to read
Neil Wilson
Neil Wilson

Investor Content Strategist

Note: This is marketing material. This article is not investment advice, capital is at risk.

London Quick Take – 10 July – Nvidia, Nasdaq, Bitcoin ATHs: Bubble?

Key Points

  • Nvidia hit $4tn market cap, first company to do so, Bitcoin hits ATH
  • S&P 500 rallies, Nasdaq Composite hits record high as investors focus on AI, not tariffs
  • Fed minutes showed split between hawks and doves over tariff impact
  • Gilt markets at risk from hedge fund leverage, says the Bank of England

Zeitgeist: We’re so back...Nvidia, Nasdaq, Bitcoin ATHs, Vix at 15, yields down...summer bubble risks seem elevated as positioning is lighter than at start of the year... melt-up in risk suggests first ramp then choppier Q3/4 ahead. 

Nvidia hit the $4tn market cap
level as shares rallied past $164, making it easily the world’s most valuable company. It took 24 years for Nvidia to reach a valuation of $1 trillion, but just nine months to double in size and little over 3 more to take it to $3 trillion last year. It's been a more up-and-down journey since then to get north of $4tn - we’ve had DeepSeek, sweeping and unsettling restrictions on chip exports, and of course the topsy-turvy journey of Trump’s tariffs. But investors have seen through all this to ride the AI wave. Revenues are forecast to hit $200bn this year, with over $100bn in net income. A major moment for the market – the question for everyone is does this mark the top? Until austerity kicks we could see further to run. 

The S&P 500 rose as Nvidia led gains among tech giants with gains also for the Nasdaq and Dow Jones...the market is still shrugging off tariff threats even as Trump sent more letters out slapping big tariffs on a number of countries, including 50% on Brazil and made good on his 50% copper tariff. Volatility continued to ease, as the VIX fell 5.2% to 15.94, and short-term gauges like VIX1D dropped below 10 for the first time this month. Looks like a 2018 rehash with Mar/Apr trough, summer melt-up and tougher run into the end of the year? SPX at 22x forward earnings, Buffett indicator at record, concentration and breadth way too narrow...earnings season is going to get interesting.  

Germany’s DAX rallied over 1.4% to exceed 24,500, hitting a record high, boosted by defensive stocks as trade negotiation updates are awaited. The FTSE 100 was up again to tap on 8,900, near its ATH, before kicking on 0.77% to 8,939 this morning. 9000 seems likely now in this melt-up phase.

Tesla
shares fell – X boss Linda Yaccarino is stepping down as CEO after two years...tough times at the old Twitter...will Musk take over the reins again? TSLA shareholders, already concerned about a new foray into politics, will be watching. Pharma stocks were mixed on the looming 200% drug tariffs, Palantir gained 2.5%, and Verona Pharma soared 20% on a $10bn takeover from Merck. Microstrategy and Coinbase were both +5% on Bitcoin rally.

Fed minutes showed policymakers are concerned that tariffs will cause “persistent inflation”, in a sign that they are further away from enacting cuts that the market expects, whilst also underlining the split on the committee between hawks and doves over the impact of tariffs on inflation and growth. Ten members expect two rate cuts this year, while seven expect none. Two forecast one cut. 

Ahead of the release of the minutes Trump had some more words of wisdom on Fed chair Jay Powell: “Our Fed Rate is AT LEAST 3 Points too high. “Too Late” is costing the U.S. 360 Billion Dollars a Point, PER YEAR, in refinancing costs. No Inflation, COMPANIES POURING INTO AMERICA. “The hottest Country in the World!” LOWER THE RATE!!!” 

Basis trade worries – the Bank of England said hedge funds’ leverage in the gilt market is raising the risk of destabilising selloffs. Basis trades, which exploit the difference between cash bonds and gilt futures, has been talked about a lot regards the US Treasury market but now the BoE is also seeing the problems in the UK. Last week’s gilt selloff was likely a case in point. A “small number of hedge funds” accounted for 90% of net gilt borrowing, said the BoE, which is consulting on ways to reduce financial stability risks in repo markets. Watch this regards fiscal problems in the UK. 

Sterling came off a more-than-two-week low to attempt to recapture 1.36 against the US dollar. Now in descending wedge after the rising wedge broke down...looking for break higher but GDP figures tomorrow could show slowing. UBS lowered its pound forecast, citing fiscal/economic risks. 

Finally, oil slipped off a two-week high after the largest inventory build since January. EIA data showed a 7-million-barrel rise in crude stocks, despite a 1.3mn drop in imports.

 

 

 

Quarterly Outlook

01 /

  • Q3 Investor Outlook: Beyond American shores – why diversification is your strongest ally

    Quarterly Outlook

    Q3 Investor Outlook: Beyond American shores – why diversification is your strongest ally

    Jacob Falkencrone

    Global Head of Investment Strategy

  • Q3 Macro Outlook: Less chaos, and hopefully a bit more clarity

    Quarterly Outlook

    Q3 Macro Outlook: Less chaos, and hopefully a bit more clarity

    John J. Hardy

    Global Head of Macro Strategy

    After the chaos of Q2, the quarter ahead should get a bit more clarity on how Trump 2.0 is impacting...
  • Equity outlook: The high cost of global fragmentation for US portfolios

    Quarterly Outlook

    Equity outlook: The high cost of global fragmentation for US portfolios

    Charu Chanana

    Chief Investment Strategist

  • Commodity Outlook: Commodities rally despite global uncertainty

    Quarterly Outlook

    Commodity Outlook: Commodities rally despite global uncertainty

    Ole Hansen

    Head of Commodity Strategy

  • Upending the global order at blinding speed

    Quarterly Outlook

    Upending the global order at blinding speed

    John J. Hardy

    Global Head of Macro Strategy

    We are witnessing a once-in-a-lifetime shredding of the global order. As the new order takes shape, ...
  • Asset allocation outlook: From Magnificent 7 to Magnificent 2,645—diversification matters, now more than ever

    Quarterly Outlook

    Asset allocation outlook: From Magnificent 7 to Magnificent 2,645—diversification matters, now more than ever

    Jacob Falkencrone

    Global Head of Investment Strategy

  • Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?

    Quarterly Outlook

    Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?

    John J. Hardy

    Global Head of Macro Strategy

  • Equity Outlook: The ride just got rougher

    Quarterly Outlook

    Equity Outlook: The ride just got rougher

    Charu Chanana

    Chief Investment Strategist

  • China Outlook: The choice between retaliation or de-escalation

    Quarterly Outlook

    China Outlook: The choice between retaliation or de-escalation

    Charu Chanana

    Chief Investment Strategist

  • Commodity Outlook: A bumpy road ahead calls for diversification

    Quarterly Outlook

    Commodity Outlook: A bumpy road ahead calls for diversification

    Ole Hansen

    Head of Commodity Strategy

None of the information provided on this website constitutes an offer, solicitation, or endorsement to buy or sell any financial instrument, nor is it financial, investment, or trading advice. Saxo Capital Markets UK Ltd. (Saxo) and the Saxo Bank Group provides execution-only services, with all trades and investments based on self-directed decisions. Analysis, research, and educational content is for informational purposes only and should not be considered advice nor a recommendation. Access and use of this website is subject to: (i) the Terms of Use; (ii) the full Disclaimer; (iii) the Risk Warning; and (iv) any other notice or terms applying to Saxo’s news and research.

Saxo’s content may reflect the personal views of the author, which are subject to change without notice. Mentions of specific financial products are for illustrative purposes only and may serve to clarify financial literacy topics. Content classified as investment research is marketing material and does not meet legal requirements for independent research.

Before making any investment decisions, you should assess your own financial situation, needs, and objectives, and consider seeking independent professional advice. Saxo does not guarantee the accuracy or completeness of any information provided and assumes no liability for any errors, omissions, losses, or damages resulting from the use of this information.

Please refer to our full disclaimer for more details. Past Performance is not indicative of future results.

Saxo
40 Bank Street, 26th floor
E14 5DA
London
United Kingdom

Contact Saxo

Select region

United Kingdom
United Kingdom

Trade Responsibly
All trading carries risk. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more
Additional Key Information Documents are available in our trading platform.

Saxo is a registered Trading Name of Saxo Capital Markets UK Ltd (‘Saxo’). Saxo is authorised and regulated by the Financial Conduct Authority, Firm Reference Number 551422. Registered address: 26th Floor, 40 Bank Street, Canary Wharf, London E14 5DA. Company number 7413871. Registered in England & Wales.

This website, including the information and materials contained in it, are not directed at, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in the United States, Belgium or any other jurisdiction where such distribution, publication, availability or use would be contrary to applicable law or regulation.

It is important that you understand that with investments, your capital is at risk. Past performance is not a guide to future performance. It is your responsibility to ensure that you make an informed decision about whether or not to invest with us. If you are still unsure if investing is right for you, please seek independent advice. Saxo assumes no liability for any loss sustained from trading in accordance with a recommendation.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc. Android is a trademark of Google Inc.

©   since 1992