WATCH THE FULL EPISODE: Very few people are willing to be bearish on the biggest tech companies in the world. And you’ll find almost no one who says they are an outright short. But in this episode of In the Money with Amber Kanwar, legendary Wall Street strategist Larry McDonald, founder of the Bear Traps Report and author of the new book How to Listen When Markets Speak, explains why the next big rotation is already underway from overvalued tech stocks to overlooked hard assets.
On second thought: Futures are indicating a higher open driven by tech stocks thanks to a monster quarter from Oracle (+30% in the pre-market). More on Oracle below, but the resilience of the markets is even more stunning when you consider yesterday the Bureau of Labor Statistics basically undid previous ideas that the US job market was healthy. The BLS revised jobs down by 911,000 for the last 12 months through to March. This means there were about 76,000 few jobs per month than expected, which is a record high revision. “In simpler words, it means that the US jobs market is in much worse shape than we thought,” wrote Ipek Ozkardeskaya of Swissquote. That didn’t dent markets, however, because expectations of a rate cut are continuing to boost markets. This morning we just got a read of producer prices that was significantly below expectations, which fueled futures even more because it means inflation won’t get in the way of the Fed cutting rates. Oil is also higher this morning and could help propel the TSX to another fresh record. While some fret about oversupply in crude, traders are focusing on geopolitics after Israel launched attacks in Qatar targeting senior Hamas leaders.
The Oracle Has Spoken: Shares of Oracle are soaring 30% in the pre-market to a fresh record high. Thanks to AI infrastructure spending, Oracle says their backlog of business stands at an eye watering $455 billion, four times higher than it was last year and four times higher than Google’s. Not only did sales grow at the fastest pace in two years, but the company’s forecast suggested growth would accelerate. Analysts are tripping over themselves to raise estimates and upgrade the stock. After a 30% one day move is there still room to run? “After-hours move is significant but may still be underdone,” wrote Tyler Radke of Citi in his upgrade this morning. “With our positive view on AI infrastructure demand, we believe ORCL shares still have upside from here with top/bottom-line growth significantly accelerating in the years ahead, further establishing Oracle as a unique megacap AI winner.”
It’s a good day to IPO: Buy-now-pay-later platform Klarna is expected to debut today after raising $1.37 billion in an IPO that values them at $15 billion. This will be one of the biggest IPOs so far of 2025. The IPO was well oversubscribed with 20x more orders than available stock. The deal is priced at $40/share which is higher than the initial range of $35-37/share. Unlike some other tech unicorns that come to market, Klarna is profitable. It also carries AI fairy dust using artificial intelligence technology to rapidly approve payment plans. If performance by rival Affirm is any indication (Affirm is up 45% so far this year), investor demand for this space is high. It also helps that Oracle knocked it out of the park with earnings and a rate cut is expected next week supporting a risk-on mood ideal for IPOs.
Back to your roots: I’ll watch shares of Roots at the open after the Canadiana retailer posted a third quarter in a row of positive sales growth. It also posted a narrower loss than last year. The stock has been on a tear, up nearly 50% so far in 2025. No small feat in a sector littered with casualties (cough Lululemon cough).
Good as gold: RBC is upgrading Equinox Gold, Newmont, and Iamgold to outperform on the back of stronger gold prices. After years of operational challenges at Equinox Gold, RBC says the worst is behind them. In case you missed our interview with Equinox founder Ross Beaty, you can watch here. Beaty gets very candid about all that went wrong with Equinox but explains why he is confident that they are about to turn a corner (and maybe even pay a dividend). RBC isn’t bullish on all gold stocks, downgrading Centerra on relatively lower gold exposure.
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