Quarterly Outlook
Q4 Outlook for Investors: Diversify like it’s 2025 – don’t fall for déjà vu
Jacob Falkencrone
Global Head of Investment Strategy
US & China check the key "trade war detente" boxes. Meanwhile, market narrowness a concern.
Saxo Market Call
Summary: Today, we look at the US and China clearly wanting to de-escalate trade tensions as both sides made concessions, with a one-year time horizon for some of the most important ones. Otherwise, we cover the extreme narrowness of the market's recent advance as most stocks have had a lousy couple of days on Tuesday and Wednesday. Thoughts on Fed Chair Powell's hawkish press conference and an unbelievably dovish Bank of Japan governor Kuroda press conference, many single stock stories, must reads and listens and more are also on today's pod, which is hosted by Saxo Global Head of Macro Strategy John J. Hardy.
Listen to the full episode now or follow the Saxo Market Call on your favorite podcast app.
Today’s Links
WSJ on “tens of thousands” of jobs disappearing, displaced by AI
The article delivers a lot less than it promises and between the lines, it looks like the US economic transformation will create demand for other kinds of jobs outside the office. But it is no doubt that in many places, wrenching changes are afoot, especially for the gentleman profiled and his heart-breaking story - he could be a candidate for Turchin’s revolution (link below).
The trader who never spoke…until now.
If you haven’t already read it, pick up a copy of Jack Schwager’s 1989 classic Market Wizards book that interviews an impressive cast of successful traders from the time. The specific market dynamics have moved on since then, of course, but the book contains so many nuggets of wisdom for the trader. One of the most compelling interviews in the book was with Ed Seykota, a very early and successful systematic trader, not to mention eccentric. One of his early acolytes was David Druz, someone who has been active in markets for decades but steered clear of the spotlight, until now. Top Traders Unplugged managed to sit the guy down for an interview - I am looking forward to this listen.
Amazon moving further down the enshittification curve
Cory Doctorow posts scathing commentary on Amazon’s job reduction announcements and what they may really be about - Amazon becoming “too big to care”. Ouch.
This is unsustainable, when’s the violent revolution?
Peter Turchin of “cliodynamics” fame weighs in on the Thoughtful Money on how things may develop in even revolutionary fashion in the US if the scale of inequality persists without escape valves that flatten the extremes again. I like many of his observations on the dynamics of what is going on, if not fully engaging in his framework. In a related story, the Pentagon has ordered states to prepare rapid-response outfits to be trained in crowd control and civil disobedience.
Chart of the Day - S&P 500 Equal Weight ETF
The chart is of Invesco’s S&P 500 equal weight ETF - others, including in UCITS forms are available (XTrackers has several that are listed on European exchanges). Interesting that yesterday saw one of the worst days for the average stock in the S&P 500 since the October 10 meltdown when Trump threatened the 100% tariffs on China. Also worth noting that the lows in this ETF price yesterday were near levels that traded way back in late July. In the case of the megacap heavy market cap-weighted S&P 500, we have advanced almost 8% since then. This increasingly narrow market advance should be at least a near term concern for the bulls, even if the narrative is that have cleared the decks of event risks once we get beyond earnings season here and can enjoy the “usual” end-of-year rally.
Weekly chart
Questions and comments, please!
We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.This content is marketing material and should not be considered investment advice. Trading financial instruments carries risks and historic performance is not a guarantee for future performance.
The instrument(s) mentioned in this content may be issued by a partner, from which Saxo receives promotion, payment or retrocessions. While Saxo receives compensation from these partnerships, all content is conducted with the intention of providing clients with valuable options and information.
Latest Market Insights
Quarterly Outlook
-
-
Quarterly Outlook
Q4 Outlook for Traders: The Fed is back in easing mode. Is this time different?
John J. Hardy
Global Head of Macro Strategy
The Fed launched a new easing cycle in late Q3. Will this cycle now play out like 2000 or 2007? -
Quarterly Outlook
Q3 Investor Outlook: Beyond American shores – why diversification is your strongest ally
Jacob Falkencrone
Global Head of Investment Strategy
-
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... -
Quarterly Outlook
Equity outlook: The high cost of global fragmentation for US portfolios
Charu Chanana
Chief Investment Strategist
-
Quarterly Outlook
Commodity Outlook: Commodities rally despite global uncertainty
Ole Hansen
Head of Commodity Strategy
-
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, ... -
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
-
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
-
Quarterly Outlook
Equity Outlook: The ride just got rougher
Charu Chanana
Chief Investment Strategist
Disclaimer