Summary: Today, a look at the US market completing one of its most remarkable comebacks ever as it ramped off recently lows to hit new all time highs in such quick order, even as high oil prices linger. We note the types of names that advanced and the lack of market breadth, wondering how the market will develop from here now that volatility has been crushed and with the heart of earnings season on tap over the next two weeks. Also, a look at the remaining questions over Iran, latest action in currencies and much more. Today's pod is hosted by Saxo Global Head of Macro Strategy John J. Hardy.
So exactly how remarkable has the recent US market behaviour been? Can you build a Bloomberg terminal entirely with AI for free? Why US equity market valuations are where they are - and why it might change. A Substack posttrying to figure out why US sentiment readings are so poor in a supposedly okay economy. TLDR on stablecoins and US “reclaiming financial sovereignty” via their use. The new Iranian regime - even worse than the old one? The state of play in equity and private capital/direct lending. While the S&P 500 Index making all time new highs has justifiably grabbed headlines, especially on the neck-snapping reversal of momentum as the near-correction became an outright melt-up, it was the big market cap giants that have lead the way higher, with the median stock outperforming, a divergence that bears tracking in coming days for further development. Yesterday, for example, saw more losers than gainers on an overall solid 0.8% advance for the market. The chart below shows the S&P 500 Index versus the Equal Weight Index. The last two major divergence before this one were in early 2025 just before the meltdown into Trump’s Liberation Day tariff announcements - at that time with the standard index outperforming the equal-weight index, which was not posting new highs in February 2025. Then we saw a major episode of divergence just ahead of . This last episode may have been driven chiefly by AI-impact fears that struck larger market cap companies disproportionately (hyperscaling big cap-ex spenders plus the AI-disrupting-all-software theme). These latter have now come storming back relative to the median stock as represented by the equal-weight S&P 500, taking the standard index to an all-time high while the equal-weight index lags. Given how beaten down some major names still are, there could be room for further outperformance of the market-cap weighted index if benchmark chasers are forced to load up on passive instruments tracking the major index.
Very! Warren Pies breaks it down for us.
Michael Kao is trying - certainly not free in terms of the labor applied or the expertise needed to know how to go about this attempt. A great and superbly written substack post on the lessons he has learned along the way in building something quite remarkable and with some interesting conclusions. Try the product out here - it is amazing.
This Odd Lots podcast rhymes with the points made by Peter Garnry on his most recent Saxo Market Call appearance in Februarywhen he talked about “the great pool of profits” the Mag7 created, one that may be running much lower, at least in terms of growth and size relative to the economy.
A white paper for anyone not up to speed on this(I include myself to a degree in that group still - also a bookmark for me to read!).
This would fit with many of Robert Pape’s arguments. Is Iran just buying time here?
Golden observations from Howard Marks, a master investor - wish he could read them aloud in a more engaging way!Chart of the Day - Tick-tock as market cap heavies outperform
Outrageous Predictions
Chief Investment Strategist
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Chief Investment Strategist
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Chief Investment Strategist
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Chief Investment Strategist
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Global Head of Investment Strategy
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Investor Content Strategist
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Global Head of Macro Strategy
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Global Head of Macro Strategy
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Saxo Group
Outrageous Predictions
Global Head of Macro Strategy