Owning the future

Valuations out of control but liquidity good

In this report: Jackson hole- what happened? Meta whistleblower and spending, How inflation is financial violence and the context of history on valuations.

Calendar

Big hitting days this week. NVIDIA earnings Wednesday after the close. Followed by GDP and jobless claims Thursday. Finishing off with the big PCE Friday. Bank Holiday in The UK Monday.

Earnings for the week of August 25, 2025 $NVDA $BABA $SNOW $MRVL $DELL $CRWD $OKTA $IREN $MDB $KSS $ULTA $S $PDD $HPQ $DG $BBY $SMTC $VEEV $BOX $ANF $NTNX $URBN $HEI $NCNO $AFRM $PVH $PSTG $FIVE $GAP $BMO $BNS $AMBA $TD $CM $NTAP $ESTC $BEKE $ATAT $ECX $ELMD $NSSC $PAHC $LI $DKS $COO $BURL $BBWI $A $SJM

Lets get Jackson Hole out of the way. The markets absolutely loved it. A ‘BUY EVERYTHING’ cry across all markets priced in US Dollars.

• The Fed is back to basics: keep inflation near 2%.

• No more special rules from 2020 about letting inflation run hot.

• Expect interest rates to stay higher than before COVID.

• Rate cuts may come, but don’t expect cheap money like the 2010s.

• Bottom line: the Fed’s priority is price stability first, jobs second.

For markets?

• Equities: Despite Powell signalling “higher for longer,” stocks ripped higher. That tells you positioning was leaning defensive into Jackson Hole and traders interpreted the shift as opening the door to cuts sooner rather than later. Risk-on relief rally.

• Bonds: Yields fell hard (bonds bid) — markets heard Powell say “we’ll stay flexible” rather than “we’re locked into higher rates forever.” Classic dovish read despite the Fed’s intended hawkish framing.

• Gold & Silver: Precious metals surged as real yields dipped and the dollar cracked. Traders leaned into the idea that the Fed will blink at growth risk and tariffs, reviving the inflation hedge + store-of-value trade.

• DXY: Dollar weakness was the cleanest tell. The market front-ran a pivot toward easing — weaker dollar equals easier financial conditions, consistent with the bond/equity rally.

In summary. This sets-up a pretty crappy looking picture. The markets are pricing in a cut, despite there being little evidence it will happen. If they cut in September under those conditions (overstretched valuations, weakening jobs, sticky inflation), I think you get short-term euphoria but long-term instability. You can bet your ass the most popular thing people will be writing about then is comparing USA today with the downfall of The Roman Empire.

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Meta

Newsquak real-time feed

Meta have been fudging their ad success rates. This announcement was quickly smoothed over by the Meta PR team in Tuesdays Newsquak flow. It was quickly followed up with an official Meta announcement about how happy they were about the bond sale. This will bubble up over the coming weeks. The market did not like it.

I tweeted about Meta pulling the spending on A.I during last week. The overlords have been spending like drunken sailors. Meta along with Apple and Google are now going to the corporate bond markets, raising long term cash by selling up to 40yr bonds. Meta just raised $10.5Billion at a 1.3% yield. As long as this cash train continues, liquidity for their expansion and growth can last. However, they are also executing efficiency on their books by cutting back on staffing. Something bulls always like to hear.

The competition for owning the A.I future is only starting to mature.

Article here

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Is there any value in stocks?

Valuations are out of control. That doesn’t mean it’s an all-clear to short. You would get run over. But it does mean the market is front-loading too much of the future into today’s prices. Take Palantir: at over 200x forward earnings, or 518x on trailing PE, it’s like buying a rental property with a 0.5% yield. You’d be waiting centuries to earn your money back at today’s pace — unless rents (earnings) explode higher. That’s the sort of speculative stretch we live in.

How about we look at this in historical context below. Taking the 4 top long term valuation metrics,