The Consumer Might Be Teetering

Speculation wasn’t this high prior to the COVID-19 crisis. Look at how little options speculation there was in the 1990s. These derivatives bets by retail traders can catalyze quicker losses than we saw in the late 1990s tech bubble. This is like the 1990s tech bubble on steroids.

Snowflake’s IPO on Wednesday is emblematic of the speculation in tech as the stock has a 134 TTM sales multiple using the open price from $190 to $195. The intended price of $120 will value the company at $33 billion which is almost triple the $12.4 valuation it got in its private funding round earlier this year. The IPO range was raised from $75-$85 to $100-$110. It was then raised to $120 because demand was so high.


Redbook same store sales growth is dropping. The unemployment benefits given out are a mixed bag. They certainly won’t boost spending like the stimulus earlier this year combined with the $600 in weekly benefits. Credit card charge offs and delinquencies weren’t high in August. The August industrial production report wasn’t good, but the Empire Fed manufacturing index was great. QQQ call option buying signals the frenzy in tech is still here despite the correction earlier this month.

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