News

The magazine cover old saw. The Economist magazine cover (dated May 2) that everyone is passing around as the holy grail for a turn lower in crude oil prices. So the editorial staff of the Economist have magic powers? Apparently so!

For The FX Trader The FX Trader piece from today, rounding up the week’s action, the JPY intervention and the focus for next week, as well as the latest trend status across G10, CNH and metals.

How much should one pay for SpaceX shares when they IPO? The investment valuation sage Aswath Damodaran takes a thorough look at how to value SpaceXand suggesting the rumoured USD 1.75 trillion valuation is too expensive, not that it won’t trade there and not that Damodaran isn’t interested in the company, provided it trades at an appealing price.

Wait - Brent Johnson still likes the US dollar? Every appearance sees him trotting out the same viewpoints - Johnson is very much a booster for the prospects of American power and global hegemony-ish, especially via the dominance of the US dollar, but he is still worth listening to for his thoughts on global markets.

The AI Apocalypse - is it closer than we think? There are lots of articles like this one demonstrating how AI agents are already “exhibiting self-preservation instincts” and talking up the profound risks, even existential ones, for humanity. Are we too complacent? Will it take an AI agent robbing my bank account or my identity or sabotaging my internet-linked car (thankfully, my car is too old for that, at least I hope it is) for me to feel real fear. Either that or something large scale that happens in the public sphere?

Significant middle east oilfield capacity has been shut in - how much will be permanent? Some are worried that this Hormuz Strait closure may have destroyed significant production capacity permanently for some of the fields that have been shut in due to the inability to export through the Hormuz Strait. If these fields are compromised for years, or even permanently, we will see the world moving on the more reliance on natural gas, electrified (EV) transport, etc., but there will be a sustained disruption for the near term until global alternative supply or demand can respond. It is worth noting that crude oil supplies are on the decline already, with booming natural-gas-liquids (liquids that condensate from gas production and are very useful) growing so rapidly that overall liquids production is still rising slightly.

Yeah, we’ve heard about the SaaSpocalypse, but the Apple-pocalypse is a new one. Here is Naval Ravikant making the case for both - with the latter triggered by the “commoditization of the OS”. I don’t know who is right about all of this, but it does feel like profound disruption is afoot for incumbent giants in many areas that are enjoying too fat profits for their rapacious monopolies.

Chart of the Day - USDJPY

USDJPY saw a chunky sell-off intraday yesterday from the 160.50+ levels that traded just ahead of the official “final” intervention warning from Japan’s currency diplomat Atsushi Mimura, which according to sources also saw actual intervention and dro ve price action a much as five figures lower to below 156.00. A second flurry of apparent intervention this morning saw the pair testing the lows briefly. If we look at where USDJPY trades, we are still less than a percent from the bottom of the 158.00-160.00 range that corralled most of the price action in recent weeks. The next steps for a proper breakdown are 1) a close below the daily Ichimoku cloud, which is around 156.26. Then we have the 61.8% Fibo retracement of the rally off the lows that comes in near 155.30. The 200-day moving average near 154.11 currently could weigh at some point, but the bigger breakdown level is the significant pivot low near 152.10. To the upside, if the price action backs up on a daily close above 158.00, it’s a real sign that the market wants to put up a fight with Japan’s officialdom on its intent to strengthen the yen.

Saxo Equity Strategist Ruben Dalfovo’s piece on X-Energy as it IPO’d last week. Ruben covers not just the X-Energy IPO, but a number of other players in the nuclear energy space. And here is a YouTube channel with X-Energy posts. Still not sure if I believe there is enough U 235 for scaling these kinds of power plants sufficiently to meaningfully power our economy - it makes up only about 0.7% of naturally occurring uranium ores and requires enormous processing overhead. Others want to go the thorium route, which has its own challenges.

Here’s a bold take that not only anticipates the crash of the AI bubble, but is a sort of public policy playbook on how to make the best of the situation out of the post-bubble wreckage for the public at large.

And the dangerous implications, with a great sidebar on the recent silly AllBirds shoe-company-to-AI-infrastructure pivot pump-and-dump.

Well, the “social” long ago left social media, but it is interesting to consider the level of disintermediation/disruption of incumbent platforms that might be possible in the age of AI.

Hussman continues to cling on to “the fundamentals mean something” campe years after the passive dominance has made life endless difficult for rational actors in global markets. It’s an admirable project and I fear the day they are proven right, if that day ever comes. The last time they flashed the “expected annualized returns” was in one of their January reports, which put annualized forward returns at something like -5% (that’s yearly…for twelve years"). Can fundamentalists stay liquid as long as the market can stay irrational/passive-Ponzi?

As both Democrats and Republicansmercilessly gerrymander voting districts to politically tilt the Congressional makeup in their states, which will also heavily impact the 2028 presidential election. Here’s an idea - stop it?

Chart of the Day - EURUSD

The EURUSD chart has conflicting short term and longer term technicals here. The local setup looks constructive for the bulls after the rally cleared the recent resistance above 1.1600 and then as buyers fully eliminated the reaction to the war in Iran by taking the price back to 1.1800 and above, around where the pair traded the weekend before the war broke out. And yet, in the bigger picture, that rally stopped short near the 61.8% retracement of the monster sell-off from the 1.2081 high to 1.1411 low, a sell-off that profoundly challenged the longer term bull trend, with that key turnaround Fibo still in place.

So for the short term bullish case: From here, bulls will need for the 1.1625-50 zone to hold ideally, with 1.1575 as a kind of last gasp area of support/downside swing level.

For the medium term bearish case: If the price action fails below the 1.1575 downward swing level, focus reverts to the cycle lows and to a possible “C-wave” that eventually focuses on 1.1200-1.1250, the “A-wave” correction of the huge former bull move having unfolded from 1.2081 to 1.1411.

For the longer term bull case. Recall that EURUSD cleared the long term 1.1200+ resistance line from 2023-24 in early 2025 and remains in longer term bull mode assuming the 1.1200-50 zone continues to support. I prefer to look at shorter- and medium term trends compared to these very long term technical situations.