Quarterly Outlook
Q1 Outlook for Traders: Five Big Questions and Three Grey Swans.
John J. Hardy
Global Head of Macro Strategy
Strap yourself in for key market questions that must be answered in 2026.
New wave of an AI-led bullish nirvana or a bull trap?
Saxo Market Call
Summary: Today, much of the AI "pick and shovels" space is aflame on Meta CapEx plans and other announcements after the latter, Tesla and Microsoft all reported earnings yesterday. The average stock had a weak day yesterday, however, even as the S&P 500 touched 7,000 for the first time. Also, a look at the latest chaotic action in gold and silver prices and how the market is becoming increasingly dysfunctional and dangerous. Oil and gas prices, macro and FX and more also on today's pod, which features Saxo Head of Commodity Strategy Ole Hansen and 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
Silver and gold insanity driven in part by possible Chinese revaluation? WSJ: The deflation doom loop in China UPenn’s Wharton Business school with a huge white paper on stablecoins. Before raw-dogging your next flight, consider the purpose of boredom Trump’s destruction of soft US power in Europe Pax Silica - a key US strategic supply chain effort Reuters exclusive suggests price floor approach for materials may not persist? Always interesting when a stock does the opposite of the market on any given day, and Palantir is notable for its weakness yesterday as the stock fell -5% and is now challenging below its 200-day moving average for the first time since May of 2023. I scratched my head at the stock’s weakness on today’s podcast, but a quick news search and the light bulb goes off: perhaps its weak performance is on investors associating this company directly with the US Trump administration’s ICE anti-immigration crackdown, as the government uses Palantir software to derive the leaving PR-sensitive institutions not wanting to hold the name and individual names likewise. Read this article - it is disturbing. As well, non-US governments may second guess the risk of association or direct business with this company, which could be seen as a kind of creepy panopticon of the surveillance state. Is Palantir a sub-50-dollar stock?
Ed Dowd interview with Adam Taggart on Thoughtful Money, discussing equity market (over)valuations, US economy recession risks and much more, especially China internal revaluation needs.
Corporate profits in the economy are down, but debt continues to pile up - and it’s a classic balance sheet recession, with the only way out to either destroy the debt or destroy the unit (currency) that it is denominated in. The latter is usually the chief approach. That aspect of the situation not addressed very well in this article, but it’s still a good one for describing the dilemma. The Ed Dowd interview above does.
Fortunately, people are becoming more self aware on the degree to which the distraction economy and our devices are dangerous for our minds and even our organisms. But unfortunately, we may be doing the wrong thing by purposefully pursuing doing nothing. HT to FTAlphaville.
Pretty remarkable evidence that the US’ motivations are seen as very suspect by Europeans and that Europe wants to keep the US at an arm’s length after the recent antagonistic posturing from the Trump administration.
Pax Silica is the crystallization of the strategy for securing all parts of the semiconductor and AI supply chain, from basic materials and energy to the computing components themselves back with allies and back into the US. The Hudson Institute is doing a live webcast on the topic with key players later today:
Well - how to compete with non-profit Chinese mining and rare earth production outfits, intentionally not making profits to ensure Chinese control? Not sure I trust this story’s implications, but needs tracking.Chart of the Day - Palantir
Here’s a weekly chart of the stock - up from sub-6 dollar levels at the lows since its IPO.
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