Checked FedWatch early this morning, and the probability of a rate cut in December is back around 58%. This number has been fluctuating over the past few weeks, indicating that the market still lacks consensus on the liquidity pivot. However, the direction is clearer than the timing. The current rate futures are no longer betting on whether there will be a cut, but rather on how much will be cut each time. This kind of expectation friction is a double-edged sword for the valuation anchor of growth stocks. Especially for stocks like $ZM, which have stable cash flow but are facing aging growth narratives; price elasticity becomes particularly sensitive.
Back to $ZM itself, it has risen 3.92% in the past 24 hours, landing at around 95.65. This increase is not particularly outstanding among tech stocks, as the QQQ has occasionally shown larger swings during the same period. Its sector beta position is a bit awkward; it is neither part of the Mag7, which is treated as a proxy for the AI arms race, nor does it have the hard cycle order data support like the semiconductor sector. It is stuck in the middle, more akin to a variety that responds to macro liquidity pivots with a delay. The remote work narrative has been told for four years, and the market has long been fatigued by it, but the logic of cost reduction seems more solid at the tail end of the rate hike cycle. This is not a growth narrative-driven rally; it is more of a valuation repair within the framework of cash flow discounting.
On-chain contract data provides a set of micro evidence. Funding rates have returned to zero, and open interest is around 466.81. Looking at these two numbers together suggests that bullish and bearish sentiments have not reached extremes. Bulls are not aggressively chasing the price higher and paying hefty funding fees, while bears are not being squeezed into paying to cover. The 3.92% increase combined with this lukewarm contract data raises a question mark on the sustainability of this rally. If it were a trend breakout, we would typically see funding rate anomalies or significant increases in open interest. Right now, both signals are quite mediocre; the rebound feels more like a trial rather than an aggressive move.
From a cross-asset linkage perspective, it becomes clearer. This rebound in US tech stocks is largely driven by the trading of renewed rate cut expectations and the soft landing narrative. However, during the same period, gold has not shown significant weakness, and the ten-year US Treasury yield is still tangled above 4%, indicating that the market's risk appetite rebound is selective and localized. Capital is rotating within tech stocks, shifting from pure AI concepts to some traditional software stocks with improved cash flows. $ZM is most likely to benefit indirectly from this rotation, but it is not on the main upward trajectory.
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How long do you think this macro narrative for ZM can hold up?
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