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Bubbliest of the bubbly companies on deck with earnings. FX heating up?
Podcast 25 minutes to read
Résumé: We are much of the way through earnings season, although some of the bubbliest of the big bubbly names are reporting earnings this week, including speculative favorite Palantir today, while Applovin reports tomorrow and Robinhood, the top performer of the S&P 500 this year, reports on Wednesday. Also today, we look at the state of play in commodities markets with Saxo Head of Commodity Strategy Ole Hansen, including soybeans, gold and crude oil, run through some more compelling developments in FX and much more. Hosting the pod is Saxo Global Head of Macro Strategy John J. Hardy.
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Today’s Links
Today’s Saxo Global Market Quick Take has the earnings reports highlights incoming this week as well as the daily market news roundup.
FTAlphaville with a great one on the “Fried chicken phase” of the AI bubble as Nvidia CEO Jensen Huang’s trip around Asia created a stampede into the stock of the fried chicken chain he visited. But there is a more serious analysis of bubble risks and circular capital flows as well.
Eurointelligence.com (scroll down if it isn’t on top) weighs in with Downwards with no speed limit, on the challenges the German car industry faces as the ICE is phased out in favor of electric vehicles.
Finally, an Axios story on the divisions in the Republican party, especially interesting as mid-term elections crank up in the months ahead (election is in November), although Trump will need to retire from politics, and possibly pass on to the next realm, before any all-out civil war in the Republican party develops.
Chart of the Day - Palantir
Palantir is set to report today after the close and may have significant gap risk to the downside if it reports anything less than stellar, given its nosebleed valuation (see above on today’s image caption) Of course, upside surprises are also a possibility, but options-related profit taking on any big gaps could at first reverse any directional move - note the pattern the last time where there was a significant gap with some follow-through, but all if it was backed out, starting the week after earnings were reported. 200-strike price calls and puts (near current share price) for this Friday expiry cost just over 10 dollars. At valuation of 135 times sales and with an analyst community largely shunning it, this is a stock clearly driven by intense retail speculation, much of it in the options market. It is perhaps the favourite of the retail space together with Robinhood Markets (the top performer of the S&P 500 Index this year a more than 290%, while Palantir is the fifth best at a “mere” 165%).
Weekly chart
Questions and comments, please!
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