That Nvidia bump was rather short-lived. U.S. equities tumbled on Thursday despite an early rally, with both the Nasdaq and the Dow recording +1,000 point moves from peak to trough. The tech-heavy Nasdaq’s 4.9 percentage point swing was its biggest intraday move since April’s tariff tantrum.
Why didn’t Nvidia’s record-high $57 billion third quarter revenue and rosy forecasts calm market fears about an AI bubble? Because, as ROI markets columnist Jamie McGeever explains, the chip behemoth’s latest figures actually highlight many of the concerns that have been roiling markets recently, namely massive AI spending, extreme concentration and sky-high valuations.
Indeed, investors are now clearly anxious about AI capex indigestion, particularly given the increasing use of debt to finance investments with very high thresholds for profitability, as ROI editor-at-large Mike Dolan wrote this week.
That other big news yesterday was the delayed release of the September U.S. jobs report. While nonfarm payrolls rose by 119,000, jobs, more than twice the consensus forecast, August figures were revised down by 4,000. And, more importantly for the Federal Reserve, the unemployment rate rose to 4.4%, the highest level since October 2021.
This release will likely do little to clear-up the labor market picture for the Fed, argues Mike Dolan, especially considering how messy economic data is likely to be in the wake of the longest-ever U.S. government shutdown.
Over in Asia, the Japanese yen was hovering near a 10-month low around 157 per dollar on Friday, as Prime Minister Sanae Takaichi approved a 21.3 trillion yen ($135.5 billion) economic stimulus package, raising the spectre of FX intervention. Jamie McGeever argues that the yen’s long-standing position as a global safe haven may now be in question.
Meanwhile, as the COP30 climate summit in Belem, Brazil continued this week, ROI energy columnist Ron Bousso did a deep-dive on the green transition, arguing that it will be a lot bumpier and more fractured than leaders expected when the Paris agreement was signed ten years ago. But Ron also cautions investors from being hoodwinked by the grim energy transition vibes.
Staying in energy markets, the U.S. has risen to the top of global LNG exporter rankings, prompting the narrative that shipments of "freedom gas" will continue climbing for years. But, as ROI energy transition columnist Gavin Maguire argues, American LNG vendors are at risk of rapid volume downturns if European buyers curb gas use, especially if U.S. firms fail to increase market share in Asia.
Speaking of commodity demand in Asia, ROI columnist Clyde Russell this week looked at China’s growing oil stockpiles, the slump in its steel output amid a rise in iron ore imports, and the spike in the country’s fossil fuel-powered electricity generation.
Finally, over in the metals markets, the global competition for critical minerals has reached the least glamorous part of the metallic supply chain, Aluminium scrap. ROI metals columnist Andy Home explains why this humble material actually should be considered “a strategic commodity.”
As we head into the weekend, check out the ROI team’s recommendations for what you should read, listen to, and watch to stay informed and ready for the week ahead.
I’d love to hear from you, so please reach out to me at anna.szymanski@thomsonreuters.com.
