If a cat has nine lives, how many lives does a bear have?
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Welcome to the Saxo Market Call. Before we get started, it's important we emphasize that the views and opinions expressed in this podcast are those of the hosts and guests and do not constitute investment advice or recommendations.

All information provided is for educational and entertainment purposes only. All right, so here we are. It is Friday, 2nd of May, 2025. It is Nonfarm Payrolls Day. It feels like a little bit more interesting than it has been in previous months after a couple of wobbly U.S. labor market data points earlier this week. We'll get to that. If you want to follow along with the slides today, do find the link in the podcast description below.

for this episode and quite a bit going on here. We saw a pretty big rally yesterday, to say the least, Jakob, with it felt like the key element here was news that's sort of flying directly in the face of what's been really

dogging the bears of late, and that is the AI spend coming through very fast and hard from both Microsoft and Meta for slightly different reasons. And we saw a pretty amazing boost, especially Microsoft was up something like 8%, 9% yesterday, and the broader market as well, NVIDIA enjoying that AI spend news as well. So

What's your assessment here? And we had a couple of Mag7 stocks reporting after the close yesterday and then further events overnight in Asia, which I'll get to. But I'll throw it over to you on your impression from the Mag4 that have reported so far.

This week? Yeah, it's been a quite busy week in terms of big tech earnings release. We also had Alphabet last week. But yeah, Microsoft, as you said, delivered very strong earnings on Wednesday. Meta as well, actually. But both Microsoft and Meta delivered very, very strong numbers showing, yeah,

beating top line and beating on revenues as well. And also without reconfirming this AI spend that, as you talked about, and those CapEx plans and something that has survived

sending NVIDIA up as well, as you said. We also saw that from Alphabet last week that they also confirmed this huge capex spending that we have talked about all over, both during the winter and during the spring, whether that was justified or how they could monetize it. And they're actually showing that they continue doing this and they actually also show signs that they actually start monetizing this, especially Meta posted some very strong numbers on the ad business where they're using...

AI quite heavily. I also came out with the news that they will release a new standalone app for their AI tool that will compete with ChatGPT and the likes. But I think, yeah, Microsoft shines very, very bright up, yeah, 9%-ish yesterday and also taking on the

spot as the most valuable company in the world um but i think i mean they delivered across the entire board uh also the azure cloud business was was stronger that was something that they disappointed a bit on uh last time around uh but this time they showed a pretty strong uh spend yeah so meta the interesting thing there being of course that they're actually employing ai to to up their up their profits and up engagement metrics and even apparently charging more

for their ads. I'm not so skeptical, I must say, on these AI glasses, but it seems like the company is not exactly hurting without that AI glasses business to add on top. But maybe I'm just too old and skeptical, but I just wonder if these devices that you basically strap on your face and they're sort of overlaying reality with various augmented reality features or whatever, I shake my head a bit. I think it'd be good for us to all get off of our phones.

But as much as we could. And speaking of phones, of course, Apple reporting yesterday after the close. Some disappointment there. The shares were a bit off. What's your take on that one and then Amazon.com? I think two companies that are situated so differently from Microsoft and Meta in terms of the whole trade war situation and rivalry or whatever, decoupling, whatever it's going to end up being between the U.S. and China. Yeah, I can say, I mean...

this week we have had an A and a B team, A team and Microsoft and Meta B team yesterday with the Amazon and Apple, both disappointing a bit. Actually, if you dig into the numbers, Apple delivered quite solid earnings, also beating expectations on revenue as well. But I mean, as you say, if we dig into the numbers a bit, there's a little bit trouble underneath the surface. Sales in China slipped more than 2%. And I mean, the

The big thing and the big elephant in the room is of course tariffs. Tim Cook was out warning that alone in this coming quarter, they could see increased costs from tariffs of $900 million.

which is of course quite a big thing uh also digging into the numbers at the the service segment that is kind of the high margin backbone with high growth in apple also disappointed a bit not much uh below expectations but but certainly a bit and that is of course something that is hitting apple as well and and then i think yeah they commented on this china thing as well that they they will

going forward, try to ship more than half of iPhones to the US from India instead of China. Yeah, and then there's threats to their services business as well because of the way they treat...

Third parties, they're selling things through apps and whether they can continue to charge whatever the rate is. They're charging these companies for selling things through their apps. And one interesting note I saw, they had a big rush on stores because people were afraid of big price hikes on iPhones. And that was not even in the quarter they reported. So it's for this quarter. So there could be a boost from that. But of course, then you're going to have to wonder about how it impacts or cannibalizes forward demand beyond that quarter.

And I guess on Amazon, what was the main sort of takeaway there? It was a little bit of disappointment in the outlook more than, I guess, just general level concern. We have this de minimis rule going into effect. I don't know how much that affects Amazon. I'll get to that de minimis in a second, but a bit of a tepid reaction to that one as well.

Yeah, I actually think digging into the numbers, I think the numbers were pretty solid. I think it was pretty much on line and they are pretty exposed to the tariff risk as well. And China, I think more than 25% of all the goods that they sell is coming from China. So they're, of course, heavily exposed. Yeah.

Digging into numbers, as I said, they were beating on both top line and the profits were up 62%, so quite big numbers. But it is on the outline. I think on the outlook that they are disappointing a bit. The midpoint is a bit below expectations, but not much. And I think what's also important to know is that Amazon actually were up more than 3% on the day when they released earnings. So I think...

They came in with a lot of expectations. So, I mean, it was hard to beat those. But yeah, I think what you need to track for Amazon is, of course, the tariff development and also the AWS cloud services. Sure.

All right, so and then in other markets, dollar-yen, really the bears really suffering there and that focus on the potential for yen strength return that has been very much a wild goose chase on my part with some really bad takes on the potential for that to turn around. It was really a dovish shocker from the BOJ lowering that forecast for the CPI and essentially saying to the world, we're finished hiking here.

And then we have, again, this de minimis issue on packages from China. All packages from China under US – $800 US will face the full tariffs now and not have this carve-out that they had before. A huge impact. Apparently, you're seeing anecdotally from news articles, this is like costing on the order of millions of Chinese jobs if this stays the lay of the land, which I would expect that it does.

Interesting to know, and you can get some really bad information out there. Even Bloomberg, as recently as posting videos as recently as yesterday, they were completely misleading in terms of the particulars here. At least I found them so. I don't want Bloomberg on my back about this. But I think a better one from New York Times and the BBC as well reporting a similar data points that basically these private carriers like DHL and UPS and others simply apply the 145% tariffs.

and may charge extra fees if there are extra categorical tariffs beyond those. But if you want to send it through the U.S. Postal Service, which I guess was possible before, it's $100 per item and a 120% tariff. It's essentially to me saying the Postal Service doesn't want anything to do with these things because why would you send it through that if it costs less to send it through the private carriers? And that $100 per package goes up to $200 on June 1st.

So, you know, we're all celebrating Yuha and there was even a headline overnight that China is saying that, hey, the U.S. says that they're interested in talking. So we're evaluating this if the U.S. shows, quote, sincerity. A softening of language there. We did see a rebound in risk sentiment overnight on that. But it's pretty, pretty flimsy, I must say. And then on the ground, de facto, we have these things like the de minimis going into effect that it's throwing millions of Chinese workers out of out of their of their employment.

By the way, on that de minimis issue, follow one of the links on the size of this issue for Europe as well. U.S. taking 1.36 billion of these U.S. parcels last year from the likes of Shane, Timo, etc. In Europe, what would you guess the number was, guys? 4.6 billion parcels.

So you can blame Americans for being consumers of cheap stuff. You're trumping America on this account, and you're extremely slow to deal with this. France apparently leading the charge, but we're talking rules expected to change in 2030. We're going to be at 20 billion parcels by then at the rate of current growth, and now they're talking about the 2028 being the rules. In the meantime, I think this is really impacting some European providers of products as well. So an interesting one to track there.

And, you know, speaking of a perfect storm for all the consensus trades out there, actually, before I get to gold, Ola, you're patiently standing by there. Just a couple of comments on the technical levels. So with yesterday's rally, I think we're digging into sort of the final resistance, you know, as I jokingly put it at the headline. If cats have nine lives, how many lives do bears have at this point?

We reached almost that 61.8% retracement on the cash level, just above 20,000. The 200-day moving average, so critical, lurking just above that level. And there's a little flatline level of two. So those next couple hundred points are really where the bears need to take a stand. Otherwise, I don't see what prevents us from somehow retracing and climbing the wall of worry all the way to the top of the cycle.

But we do have a perfect storm on all the trades that were working before, including gold. We've seen a pretty decent correction, about $300 there at the maximum correction point. Solid bounce back. What are you looking for here? We have Asia offline. That was a key element that I mentioned on the last podcast through Monday. But what else are you looking at besides whether Asia is on holiday or not?

Well, basically, if the economic data continues to show the weakness that we've seen recently, this week we were presented with just both Chinese and US data showing the emerging impact of these tariffs. And if that continues, then obviously something's going to give at one point. But I think the

You mentioned the Chinese demand, and it has been a constant factor and a constant driver now for quite a while. I highlight here on slide eight some of the five major ETFs in local currency in China, and we can see how the one-month inflow has just been phenomenal.

But also there was some profit taking ahead of their long holiday, which I believe they're not returning until May 6th. So that really will be key to see how Chinese investors respond to this weakness that we've seen while they've been holidaying. Because elsewhere, the speculative interest in the COMEX gold market is still fading. I put a small insert there from the...

from the recent week which was i believe the week to the 22nd of april and another week where markets was where the net long was coming down even though prices were rallying so there is a bit of a hesitancy from hedge funds right now getting getting ever getting extended so that's one is worth watching as well but

But generally, John, economic data, the debt situation, the prolonged impact of these tariffs, I think these are all still playing its part for investors looking for some kind of alternatives and just adding a little bit of a safe haven to their portfolio. Key technical level, though, that $31.65, double implications there with the previous major high, and it's that key Fibonacci retracement. So I'm really curious if we –

do see gold under pressure, what shapes up around that level? Yeah, exactly. That will be the level that if we should drop to that, say we have a number today that supports a move to that, that's really where the first key test will be in what has otherwise been quite a solid gold rally where the rotation has been relatively small and not giving investors that great a deal of headache.

Solid gold rally. I'll release you to the trading floor again if we just wind one slide back to the crude oil market, which you're showing correlates somewhat with the bear market and equities until recently. So an interesting mismatch there you're pointing out. Yeah, I just set out a

I shared with my colleagues yesterday, someone apparently in the crude market didn't get the memo that everything was okay again because we've seen stock markets rallying quite strongly this week and crude oil has been selling off. And yesterday was the weakest close, I believe, in four years.

seeing a small rebound here, but it just highlights that the crude market is most certainly still focusing on the risk of demand fading in the coming months and with Saudi Arabia sending quite a strong signal that they are prepared to suffer lower prices in order to regain market share than the

the prospect for a strong rebound is relatively small this time. But I think it's still interesting just to see this massive divergence that perhaps there's maybe a bit too optimism being cooked into the stock market at this point in time. One supporting factor is U.S. production. I just inserted that as well there, and you can see it's basically starting to roll over. And if prices stay at these relatively low levels, then we could potentially see

U.S. production start to contract instead of increase as has been the expectations up until recently. I'm fascinated at what price the forward curve goes more into contango than is the case currently because it seemed like at 50 bucks you'd start to see some contango and below that especially.

Yeah, we have quite a funny-shaped curve right now where the spot price is still the highest, and that does basically indicate that right now the fundamentals as we have them right now is actually still gold. Sorry, oil-supported because demand is keeping up, but the forward curve is indicating that

trying to price in this slowdown that everyone expects is coming. So if we are seeing this slowdown starting to play out, then obviously the front is priced too high at these current levels. All right. Thanks, Ole. And Jakob, we have earnings season ongoing. I've penciled in the names reporting next week here on slide three.

And we have, you know, Berkshire Hathaway, they always get a lot of attention from sort of the popular market. They're with their annual meeting in Omaha, Nebraska this Saturday. But some big names coming up next week. Palantir on Monday, one of those speculative favorites. And AMD, you know, another key sort of AI stock.

Novo Nordisk, a huge one for us here in Denmark, and we do have a lot of listeners here in Denmark. So let's spend a couple of seconds on that. We had Eli Lilly, of course, the main competitor to Novo Nordisk on this obesity medication front with a really nasty session yesterday. What was the news driving that? And is there any upside for Novo Nordisk or is it a bad news on the sort of, is it called GLP-1 front, these drugs? What's going on there?

Yeah, Eli Lilly was down, I think it was like 12% yesterday, just slipped all day. The numbers were actually pretty strong that they delivered better than expected, but it was the forecast again.

For next quarter, that was worse than expected, and that was what they sold off on. On top of that, there was this news that you were referring to. I think it was called this CVS, health insurance in the US, and they announced that they will shift from Eli Lilly Zetbaum to Novo Nordisk Vigori. So that means that they will promote much more heavily Novo Nordisk Vigori.

But was that based on – wasn't there something about that was based on price? And then there was also this Novo Nordisk story about them marketing their drug together with this –

It seems like they're going aggressively on the price front. I guess that's great news if they're able to increase volumes. But it's an interesting move when the whole price of these things has been a big issue. Yeah, I think, as you say, I mean, I think we're down to the price here. Looking at the weight loss effects here,

it's basically the same kind of drugs right uh we are talking very marginal differences in in small percentages over a 12-week period in a lab test so so i think overall now we are down to the price and i think nova has has cut down the price quite significantly it seems at least to get in into this deal with the cvs and as you say uh the other day there was this news as well that they're partnering up with himson hearst doing like this a copy uh

in the US to promote novel nervous disorders

drugs across the US. They have previously been doing that, but that was due to a shortage. But that kind of deal ended here, or ends now, and then they keep on doing that too. And they have massive incoming investments or current investments in production facilities. I know there's a gigantic one coming up here in Denmark. So I guess they're planning on the volume will be available, and they can maybe adjust the price point to deliver on those volumes.

Interesting as that stock, Novo Nordisk, by the way, has fallen more than 60% from its highs. It's in a bit of a rebound phase, but interesting to see how this news affects the stock today and come after it reports next Wednesday. And I don't know if you have anything that jumps out at you or the other names. I just think some really interesting companies reporting, some of which are really speculative favorites and have seen remarkable growth recently.

Palantir, the number one bubble stock, in my view, just the craziest valuation and hype around that stock. AMD, again, on the AI front. I put in this CRH. I don't really want to spend much time on this, but it's just an interesting company because it was listed over in Europe, I believe in London, as most of its business was in the U.S.,

It decided to relist on the New York Stock Exchange or make that its primary exchange. And you can see the massive move in valuation higher driven much more, I think, by that fact of its relisting more than its growth and its fundamentals with poorer liquidity over in Europe, et cetera. It just goes to show you that there is a premium situation.

being associated with being listed in the U.S., you start to get your company's equity included in all kinds of ETFs and other things that bring extra buyers that would not have been there before. So just a reminder that there is this premium for U.S. equities still outstanding. And Applovin was a big speculative favorite. I know absolutely nothing about that. Feel free to pipe up if you do, Jakob. And then MercadoLibre, a spectacular growth story.

This is a Latin American. Somebody say it's sort of like a combination between eBay, Amazon, and somebody else. This is a stock that's actually trying to challenge its all-time highs here recently. So obviously a key inflection point for its stock next Thursday. And then Heinmetall, sort of the superhero among European defense stocks. I believe they announced some kind of a collaboration with Lockheed Martin to produce something here in Europe. And then Siemens Energy, another one.

Yeah, there's certainly a lot going on in their earnings front. And I think just to sum up, I looked into some macro numbers on it. I still think

It's actually looking better than expected when we went into the earnings season. Around 75% of all companies is beating on an earnings. So it's looking pretty good. I mean, the fundamentals are keeping up strong. And also, I think the overall guidance is also a bit better than what we could have at least feared. So, yeah.

Great stuff. Thanks, Jakob. And a few more items to get to today as I look through the rest of what we have to talk about today. I think let's rewind to slide three. We have, sorry, slide four on the FX. You can see how the trending readings are showing the yen really slipping into a, in broad terms at least, into a downtrend on the individual pairs. AUS-YEN teasing a flip to a positive trend. I actually haven't looked at that chart, but the Sterling-Yen chart,

Also did flip to a positive trend according to our trend scoreboard here. However, it's still within range. So I think arguably the only thing that's sort of showing signs of a breakout here is Euro-Yen. So that Ichimoku indicator I talked about last time around or the previous one, whichever one it was, so far being broken. I think the critical test, though, also for Dalian,

where the resistance zone is really critical here, the 145 up to about 146.50, just sort of existential in the sort of short-term sense for Dahlian bears. I think the more structural Dahlian bears are still resting and waiting to see if 150 would be tested. And even 151.65 is sort of the ultimate give-up level for, technically speaking, for I think the Dahlian outlook lower bears.

Well, the key test here is the U.S. jobs report today and what that does to U.S. long rates as well as to just sentiment in general, both in FX and across the board in all assets.

And I'll get to what the Fed outlook is in a moment. But I think, you know, softening up here, potentially this U.S. labor market after we saw that jobless claims, initial jobless claims number jumping to a new high since February, the continuing claims number suddenly after sort of seesawing back and forth to the range, suddenly leaping to a new high since 2021. And that long sort of turnoff

terms sense that this indicator is remaining elevated, suggesting that people that are losing their work are having a hard time getting back in.

is a concern. ADP was soft this week. There's never any correlation, not never any correlations, less correlation than one would hope month to month on that data series relative to the official one. We all know that the non-farm payrolls data is statistically massaged, yet we still follow it. And it's still important in the bigger scheme of things when the market is looking towards the status of the US economy. So

it is a key release and again its effects are really important here for the dollar outlook rolling forward i decided to pull out euro dollar just to focus on a couple of levels here so this one 1308 sort of dropped or failed yesterday

And we've risen back above that level in today's trade and sort of wondering here, euro dollar bulls, where are the key levels? And arguably that 113.08 is very short term speaking an important number, especially we get a solid rally post the US jobs report today. Looking lower though, the sort of 112.50 is a key FIBO retracement level of the latest rally wave off the March lows chart.

1.1213 was a prior major high back from September of last year. And existentially speaking, of course, 1.10 is a big psychological level, but I would say 1.1050 even is just as important. It's the 61.8% retracement of that same late March rally to the 1.1573 high. So

I'm, you know, I would say that $110.50 gives up, then we're sort of lost in the woods here for a while in the short term to figure out what is going on with this currency pair. And it has been, let's be honest, a monumental move off of the $101.23 lows. So we may have to be patient here.

But I think if it does keep the price action tight here, we do see a solid rally quickly today that sort of erases the last few days of selling. The bulls may be back in business even in the short term. Now, a small focus on the Fed expectations, which are still high.

Looking lower, of course, we have about 90 to 95 basis points of easing priced in through the December FOMC meeting. So they need to get busy pretty soon on their rate cutting if that's to be the case. Not expected for next week's meeting, but that could change based on today's jobs report if it's particularly ugly, I would say. And you can see the development of Fed expectations on slide six there.

And I pulled out one interesting comment from the –

the ex-verse, not the Twitter-verse, but the ex-verse, I guess you could call it, from Renaissance Macro Research saying that, look, we have the Fed funds rate above where we have growth in wages and salaries. This is just untenable. The U.S., even Trump is right this time, the Fed funds rate is simply too high. And we even have Treasury Secretary Besant weighing in saying two-year yields below 10-year yields is a signal that the Fed should cut rates.

So an interesting one there that, you know, does the Fed feel the pressure from the situation as much as or less so than political pressure to signal something very soon? And does the data take care of that instead?

Upcoming data, slide nine. Of course, today's stuff, most of you will be listening to this or many of you will be listening to this after the fact. But looking ahead to next week, ISM services, the market never knows what to do with this. It could be directionally important, of course, if it surprises, especially if it surprises negatively. And U.S. Treasury auctions could be interesting for the U.S. Treasury market, the direction of yields and therefore the direction of the dollar.

And the FOMC meeting, quite highly anticipated, and a chance for them to freshen up their guidance, of course, if we get a weak data point to sort of confirm what's going on. So a really pivotal one just to sort of test whether the degree to which they're recognizing the impact of whatever data we're about to get here rather than that sort of the Fed is establishing the agenda. So it's tactically an important meeting. I think it's more important to, of course, pay attention to what Trump says

And the U.S. administration is saying in the shape of the U.S.-China relationship over the longer-term horizon, but this one definitely important next week, setting up the likelihood or certainty or otherwise of a June cut, which is only a little bit more than 50-50 priced in.

Bank of England, we'll talk about these before the fact next week. Bank of England and others, central banks on Thursday. And yeah, it's going to be an interesting week ahead after today's interesting day. Appendix, the must-reads, must-listens, some highly recommended ones here for sure.

We have a U.S. Treasury report. We don't do a lot of crypto on this call, but the crypto market is extremely interesting as a potential tool for the U.S. administration to actually help stabilize and fund the U.S. Treasury. If these stable coins are to be recognized in the U.S., then maybe they have to hold U.S. Treasuries as their backing for their stability versus the U.S. dollar.

There's a very interesting report. It's a bit dense, a bit difficult to read, and I never like referencing Zero Hedge, but Zero Hedge with a good summary here on X of what this report is all about, saying, look, stable coins already hold over $100 billion in T-bills, and there's been a rapid growth. It could mean something like $900 billion in additional holdings of T-bills, up to $2 trillion by 2030.

It could be at the expense over the long term of bank deposits, so an interesting challenge for banks and could be disruptive. A very interesting report, but it also would suggest, given the Trump way and the U.S. way of looking at things now, that if you want your stablecoin to be recognized in the U.S., of course, it has to only hold U.S. instruments in

and be U.S. dollar based. And that could be an interesting angle on things and could mean, of course, if you're sitting in another country where you're dubious about the quality of the economy there, the quality of the politicians, the policies and the currency domestically, you would also be interested in having a digital presence for your savings in the form, at least to some degree of stable coins, it reinforces the value of the U.S. dollar for the longer term.

And then a good link, or an interesting link, a good read anyway, a partial read at least. The full piece is only available for subscribers. But thelastbearstanding.com, check it out.

with some colorful metaphor usage of the Matador, where are we in bulls versus bears? I think it's just a good basic outline for the bearish case for equities. Some interesting twists on the AI space and even a couple of specific comments on companies and their AI presence. And the one that opened my eyes the most as a non-

expert on the equity side of things here was Oracle and his criticism of how Oracle is going really full tilt on AI. So of course, the upside has been tremendous for that company and could obviously stay that way if the AI momentum remains. But on the flip side, the risk is great if AI momentum fades. I think that's a good piece there. And then eurointelligence.com on this small parcel tsunami. That's an interesting read there.

Have a look at that one. I think it's very interesting to see how Europe deals with China and some of the same issues that are really not so positive for Europe while trying to pretend it's going to remain in the old rules-based order of the past rather than this new rivalry that we're in. And in fact, the EU trade representative or commissioner, Shevkovich, I think his name was,

Offering sort of the first set of terms from the European side to the U.S. on trade.

what a trade deal could look like offering basically the U.S. And I suspect this is the U.S. is going to find this unacceptable, but basically 50 billion euros in additional purchases in basically agricultural goods and LNG at the same time saying, look, you know, there's a big services deficit we have with the U.S. And if we do these 50 billion additional in purchases, the overall deficit with Europe from the U.S. perspective would only be 50 billion euros.

At the same time, it finds the 10% unacceptable, the current 10% tariffs for all countries, et cetera, et cetera. So yeah, my suspicion is that type of language is more or less dead on arrival, but

But we'll have to see if the U.S. language or stance or posture changes a bit here. Probably, you know, with equities having come back to the degree they have and risk sentiment had likewise, you probably have Trump feeling more confident and taking a more aggressive stance again. Who knows? Let's see where this Friday leaves us. I think it's kind of pivotal as we hit into the end of this week after this job support and a remarkable rally off of the lows.

where Ascentimate is leaving this week as we head into an interesting FOMC week ahead. When you get there, have a great weekend, and we'll be back next week with the next Saxo Market Call.