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  • AI Stocks Fall as Amazon and Google Signal Massive Capex: Market Wrap (6 Feb 2026)

    Key Takeaways

  • Amazon and Alphabet beat revenue expectations but stocks fell on AI capex concernsSoftware stocks remain structurally weak despite oversold conditionsInvestors continue rotating out of US growth into value, small caps and ex-US marketsBitcoin rebounded sharply, but gold remains the preferred hedge

    • Amazon and Google Earnings Highlight AI Capex Risks

    Two AI hyperscalers reported earnings and gave guidance on CapEx spending. Amazon beat on revenues but miss earnings expectations, while Alphabet exceeded analysts’ estimates on both count. Both saw their stock price fall on concerns about their CapEx ROI. Amazon is planning to spending $200bn while Alphabet has $175bn in mind.

      Software Stocks Extend Selloff as Growth Expectations Reset

      Claude’s latest model sent the already weak sector into another round of selling. While it is true that the sector is oversold, investors should look at how the relative performance of the software sector has underperformed the market for a while. Growth expectations for this sector need to be reset, making the case for further underperformance.

      Rotation Out of US Large-Cap Growth Continues

      The week saw investors maintaining the trend of favouring Ex-USA stocks over the S&P 500, Value over Growth and Small Caps over Large Cap stocks. This is a healthy sign of market rotation as the global growth outlook remains intact. In fact, market breadth in US equity markets remains positive.

      Crypto vs Gold: What the Divergence Is Telling Investors

      Bitcoin crashed before staging a meaning rebound on Friday. Gold spent the week clawing back some of the losses after the previous week crash. The market’s disdain for technology could be a reason why investors are favouring gold over crypto, in the same vein as how value is outperforming growth.

  • Bank Pulse Check: What America’s Biggest Banks Are Telling Us About the Economy

    Banks sit at the intersection of households, businesses, markets, and cash flows. Their earnings calls, especially the Q&A, reveal what people are actually doing, not just what they say they feel.

    This latest round of earnings calls from large money-centre banks and major regional banks tells a surprisingly consistent story.

    The banks we looked at

    Money-centre banks

    • JPMorgan Chase
    • Bank of America
    • Citigroup
    • Wells Fargo

    Large regional banks

    • U.S. Bancorp
    • PNC Financial Services
    • Truist Financial
    • Citizens Financial Group
    • Fifth Third Bancorp

    Together, these banks touch most of the US consumer, SME, and corporate economy.

    No bank is talking like a recession is already here.
    At the same time, none are behaving as if growth is re-accelerating.

    What we hear instead is a classic late-cycle tone:

    • steady activity,
    • selective caution,
    • intense focus on credit quality and deposits,
    • and growing reliance on fee income rather than pure lending growth.

    Credit conditions: late-cycle, not crisis

    If there were real economic stress, it would show up first in:

    • provisions,
    • non-performing loans,
    • and sharp tightening of credit standards.

    That is not what banks are describing.

    Instead:

    • Credit costs are rising slowly, largely as expected
    • Banks are monitoring pockets of weakness, not broad sectors
    • Commercial real estate remains a concern — but it is contained and well-telegraphed

    Business activity: cautious, but still moving

    From JPMorgan down to Fifth Third, banks describe a similar corporate environment:

    • Companies are not aggressively expanding, but they are not freezing either
    • Capital markets activity (trading, advisory, underwriting) has improved from weak levels
    • M&A discussions are happening, even if execution is slower

    Importantly, loan demand is modest, not collapsing.

    If a recession is coming, the banks aren’t seeing it yet.
    What they see instead is an economy that is tired, adapting, and still standing.

  • Market Wrap For Week Ending 30 January 2026

    The “Sell America” Trade Gains Momentum

    The US Dollar Index fell to approximately 95.5, its lowest level since February 2022. This decline coincided with President Trump’s comments expressing comfort with a weaker dollar and concerns about tariff policies. International investors reduced exposure to US assets, with the Euro rising to around $1.04-1.05 and the Swiss Franc gaining ground.

    Precious Metals Hit Historic Highs, Then Retreat

    Gold broke through $5,000 per ounce on 26 January, reaching approximately $5,500-5,600 by 29 January before sharp corrections. Silver surged to near $120 per ounce, then suffered its worst single-day decline since 1980, falling 26-30%.

    Expect a period of consolidation or correction as speculators are cleaned out.

    Technology Sector Shows Diverging Fortunes

    Meta’s shares surged 8-10% on strong AI-driven results, whilst Microsoft suffered its worst single-day decline since March 2020 (approximately 10%) due to slower cloud growth. Reports confirmed major technology firms have channelled over $120 billion in AI data centre financing through off-balance-sheet arrangements, raising transparency concerns.

    Central Banks Navigate Currency Volatility

    The Federal Reserve held borrowing costs steady at 3.5%-3.75% on 28 January, noting inflation “remains somewhat elevated.” More dramatic was the Japanese yen’s rally from near 159 to 154-155 after Japanese officials warned about “excessive” currency movements and the Federal Reserve Bank of New York made enquiries that often precede intervention. It may be tough for the new Fed Chair to cut rates further unless we get a material slowdown in the economy.

  • Weekly Market Wrap – 16 Jan 2026

    US-Europe Tensions Over Greenland

    President Trump announced 10% tariffs on eight European countries (Denmark, Norway, Sweden, France, Germany, UK, Netherlands, Finland) effective February 1, escalating to 25% on June 1 unless a deal is reached on Greenland. This represents a significant escalation in transatlantic tensions.

    Leaders from Europe issued a joint statement, saying they stand united with Denmark and Greenland. They started discussing retaliatory strategies but given how fractious the bloc is, the response is likely to be delayed and watered down.

    The key point is that Trump is forcing Europe to move faster on the new security and economic arrangements, as the US focuses on the Americas.

    Broadening of Equity Market Leadership: The Great Rotation is underway

    The Russell 2000 has surged 5.8% year-to-date through mid-January, significantly outperforming the S&P 500’s 1.9% gain, marking a decisive regime shift. The S&P 500’s forward P/E has surged to 22.4x versus Equal Weight at 17.0x, a valuation gap that looks to be closing. After three years of mega-cap dominance, mid-caps and equal-weight strategies are breaking to record highs, signaling healthy market breadth.

  • Weekly Market Wrap: A Strong Start to 2026

    The first full trading week of 2026 delivered record highs, geopolitical shocks, and a noticeable shift in market leadership that has investors reconsidering their portfolios.

    1. Stocks Hit Record Highs Despite Mixed Jobs Data

    Friday’s close capped an impressive week for U.S. equities, with both the S&P 500 and Dow Jones hitting all-time highs. The S&P 500 gained 1% for the week, the Nasdaq climbed 1.3%, and the Dow advanced 1.2%.

    December’s employment report delivered a mixed but ultimately reassuring message. While job gains of 50,000 fell short of the 73,000 expected, the unemployment rate surprised to the downside, dropping to 4.4% from the forecasted 4.5%. Markets interpreted this as evidence that the labor market is cooling without cracking, exactly the soft landing scenario the Federal Reserve has been aiming for.

    2. The Venezuela Shock That Rocked Energy Markets

    In what will surely be remembered as one of 2026’s most dramatic geopolitical moments, U.S. Delta Force operators captured Venezuelan President Nicolás Maduro and his wife during a predawn raid in Caracas on January 3rd. The operation, which caught Maduro sleeping in his home, immediately sent shockwaves through global energy markets.

    Energy stocks surged on the news, with Chevron jumping 5% in a single session as investors anticipated the lifting of sanctions and potential access to Venezuela’s massive oil reserves. Oil prices climbed sharply, and the entire energy sector rallied as traders repositioned for a dramatically different supply landscape.

    3. Beyond the Magnificent Seven: A Healthier Bull Market Emerges

    Perhaps the week’s most encouraging development for market sustainability was the broadening of gains beyond big tech. As concerns about AI valuations prompted some caution, investors rotated into previously overlooked opportunities.

    Small-cap stocks led the charge, with the Russell 2000 notching a 1.4% gain, while the equal-weighted S&P 500 rose 1.2%, both outpacing the market-cap-weighted index. Value stocks outperformed growth, and defense shares reached all-time highs on the back of geopolitical tensions and budget expectations.

    4. TSMC Crushes Revenue Expectations on AI Chip Demand

    Taiwan Semiconductor Manufacturing Company delivered a powerful signal about AI’s momentum on January 9th, reporting fourth-quarter 2025 revenue of NT$1.046 trillion (approximately $33.1 billion). The number beat analyst expectations of around NT$1.036 trillion and represented a robust 20.45% increase from the same quarter a year earlier.

    As the primary chip manufacturer for AI giants like Nvidia and Apple, TSMC’s results offer a direct window into the health of AI infrastructure spending. The strong performance came despite normal seasonal softness in other segments like smartphones, underscoring just how powerful AI demand has become.

    TSMC’s Taipei-listed shares gained over 44% in 2025, and this revenue beat reinforces the bullish thesis. But investors aren’t celebrating just yet as they wait for management’s guidance for 2026.

    The Bottom Line

    The first full trading week of 2026 reflected resilient risk appetite and a willingness to look past geopolitical developments in favour of solid fundamentals. The broadening of market leadership is particularly encouraging, suggesting this is not just another AI-driven melt-up.

    Still, concerns about valuations, particularly in technology and artificial intelligence, have not disappeared. They have just been overshadowed temporarily by positive momentum and improving breadth.

    The market has shown it can handle surprises, but 2026 is young, and there’s plenty of year left for things to get interesting.

  • Thoughts on Venezuela

    1. What’s Happening in Venezuela Now?

    The situation in Venezuela has dramatically shifted at the start of 2026. A U.S-led military operation resulted in the capture of President Nicolás Maduro, with the United States now actively asserting control and signalling intent to involve U.S. energy firms in reviving the country’s oil sector. 

    This follows months of escalating pressure:

    The U.S. imposed new sanctions on Venezuelan oil firms, tankers, and traders throughout late 2025.  A blockade and seizure operations targeted sanctioned oil vessels, part of a broader strategy to choke revenue flows to the Maduro government.  Switzerland froze assets linked to Maduro after his capture, adding to international punitive measures. 

    Taken together, these moves signal escalation.

    2. Macroeconomic Conditions: Still Fragile

    Venezuela’s economy remains deeply unstable and disconnected from normal financial markets:

    Official figures show significant currency depreciation, with the bolívar drastically losing value against the U.S. dollar.  Inflation is highly elevated and macro conditions are deteriorating, reflecting long-standing structural weaknesses rather than strengthening stability.  There is no reliable evidence of broad macroeconomic recovery or sustained de-facto dollarisation enough to anchor stability.

    In short, the economy is far from a stabilised, investible environment.

    3. Oil Production and Global Market Implications

    Venezuela still holds the largest proven oil reserves globally, estimated at around 303 billion barrels, but output has collapsed due to decades of underinvestment and sanctions. 

    Recent news suggests U.S. policymakers and markets are contemplating opening the country’s oil industry to Western investment, which could lift production over time. However:

    Revival of Venezuela’s oil infrastructure faces major technical, legal and political barriers. Analysts stress that production growth will likely be a long, costly process, even if U.S. firms engage.  Oil markets have largely shrugged off Venezuela-related volatility in the short term, with price moves modest and market focus still dominated by global supply dynamics. 

    Investor reactions this week have been mixed, energy stocks have rallied on optimism about future access (+2.74%), but oil prices have not priced in a near-term supply shift.  

    4. Financial Market Impacts

    Energy equities: U.S. oil and service stocks have gained as markets price potential future involvement in Venezuelan production. 

    Risk sentiment: Geopolitical uncertainty, especially involving U.S. intervention and sanctions escalation, has lifted safe-haven assets in some trading sessions. 

    Emerging markets and commodities: Venezuela remains too isolated to be a core theme for EM allocations; its influence on broader risk appetite is unfortunately insignificant .

    5. Bottom Line for Investors

    No clear path yet toward reintegration of Venezuela into global financial markets. Oil export restoration is a long-horizon structural question, not a catalyst for immediate price shifts. The key investment signal is geopolitical risk.

  • 2026 Investment Outlook: Investors Need More Discipline

    Looking back at 2025, the world adapted to trade wars under President Trump as inflation moderated and AI adoption accelerated. The global economy ends the year positively with central banks easing policy. Despite alarming headlines, geopolitical shocks remained mild whilst valuations became the key focus as AI-related stocks struggled in the final quarter. Looking ahead, investors need greater caution as strains emerge in parts of the global economy.

    United States Economic Outlook: Uneven but Sustained Growth

    The US expansion continues but unevenly, with strength concentrated in specific sectors and income groups. Consumer spending, representing 70% of GDP, increasingly depends on higher-income households supported by strong equity markets and accumulated wealth, even as lower-income consumers face tighter credit and higher costs.

    Business investment in artificial intelligence, data centres, semiconductors and automation lifts capital expenditure across manufacturing, healthcare, finance and logistics. Companies are also mobilising capital to strengthen supply chains and critical materials amid national security concerns.

    Monetary policy becomes less restrictive as the 10-year Treasury yield falls from 4.8% to 4.2%, easing pressure on households and businesses, though inflation risks remain. Fiscal policy stays supportive through Trump’s One Big Beautiful Bill, boosting 2026 growth via tax cuts that enhance household incomes by 5% on average, alongside infrastructure and manufacturing incentives.

    The labour market cools but doesn’t collapse, with slower job growth and moderately rising unemployment. Trade policy and geopolitics remain key uncertainties that could add costs and weigh on confidence.

    China Economic Outlook: Quality Over Quantity

    China shifts from property-driven growth towards economic quality and resilience. Beijing prioritises technological resilience and domestic demand through income support, better safety nets and service access. Consumer spending in services, travel, healthcare, education and leisure provides a stable growth base, though households remain cautious.

    Innovation-led growth drives investment into AI, automation, semiconductors, robotics and advanced manufacturing for productivity gains and geopolitical resilience. Exports contribute meaningfully in high-tech and green industries, but policymakers emphasise quality over volume to reduce vulnerability to trade tensions.

    Policy remains supportive but targeted towards consumption, strategic industries and infrastructure rather than broad credit expansion. The property sector remains a structural headwind following China Vanke’s near-default and a 39% Q4 sales drop for listed developers, reinforcing Beijing’s urgency to nurture new growth drivers.

    European Economic Outlook: Stabilisation and Balance

    Europe’s economy shifts towards stabilisation with more balanced, internally driven growth. Household consumption re-emerges as the primary engine as eased inflation allows real wage recovery and near-record employment supports confidence.

    Investment improves through lower interest-rate pressure, EU Recovery and Resilience Facility disbursements, and Germany’s fiscal loosening supporting infrastructure, digitalisation, energy transition and defence. Labour markets remain stable with historically low unemployment and positive wage growth supporting productivity gains through technology adoption.

    Monetary policy becomes more predictable as inflation nears the ECB’s target, offering businesses and households greater visibility. Exports contribute modestly whilst exposure to global trade uncertainty limits upside, though cheaper imports help contain inflation.

    Japan Economic Outlook: Self-Sustaining Momentum

    Japan shows signs of durable expansion as household consumption emerges as a genuine growth engine. A tight labour market delivers meaningful wage gains whilst moderating inflation towards the Bank of Japan’s 2% target should improve real incomes and support discretionary spending.

    Corporate Japan enters 2026 with healthy balance sheets and elevated profits, channelling capital expenditure into automation, digitalisation, AI and green technologies. Labour shortages accelerate productivity-enhancing investment whilst governance reforms encourage better capital allocation.

    The Bank of Japan’s gradual policy normalisation will anchor inflation expectations and reduce market distortions. Lower, more stable inflation should support household purchasing power despite modestly higher borrowing costs. Exports remain important in semiconductors and precision machinery but won’t be a major driver given global uncertainty.

    Global Stock Market Outlook 2026: Selectivity Over Momentum

    Global equities enter 2026 with restraint rather than exuberance in a more selective, fragile regime. Monetary policy settles at structurally higher neutral rates that can support equities with durable earnings and pricing power, making valuation discipline critical.

    Sustainable equity performance requires profits to broaden beyond technology leaders into financials, industrials, healthcare and services. AI’s role evolves from building to effective deployment, rewarding companies translating it into tangible productivity gains and higher margins.

    Governments direct investment towards defence, infrastructure, energy security and strategic supply chains, creating spending multipliers. Valuation discipline returns as investors become more cost-conscious, favouring earnings quality and value stocks.

    Investment Risks 2026

    Significant tail risks include a disorderly US fiscal event from elevated debt triggering Treasury auction failures or yield spikes. Geopolitical disruption to semiconductors or rare earth supply chains could hit margins directly and revive inflation. Financial stress in private credit, hedge funds and non-bank lenders could trigger forced selling across risk assets.

    Conclusion: Investment Strategy 2026

    The global economy appears resilient but increasingly uneven in 2026, with growth driven by narrower forces. Markets enter a regime where earnings quality, balance-sheet strength and valuation discipline matter again. The key risk is complacency: elevated debt, geopolitics and hidden leverage demand investors prioritise selectivity, diversification and discipline over momentum.

  • Market Wrap for Week Ending 28 November 2025

    Global financial markets ended the final week of November on firmer footing. Softer US economic data, easing bond yields, and a rebound in technology shares helped restore confidence after a turbulent month. Although risk appetite improved, underlying fragilities remain, especially in credit markets and currencies.

    Equities: A Broad-Based Recovery

    Equities staged a notable recovery. The S&P 500 rose as investors gained conviction that the Federal Reserve may cut rates in December. The Nasdaq 100 outperformed thanks to a rebound in AI and cloud-infrastructure leaders. Small-cap stocks, represented by the Russell 2000, also delivered solid gains as falling yields favoured broader participation.

    Across the regions, Japan’s Nikkei 225 surged nearly 2 per cent mid-week, mirroring the global risk-on tone. Hong Kong’s Hang Seng Index steadied after early losses, and European markets posted modest gains despite subdued regional data.

    Fixed Income: Yields Ease as Caution Builds

    Bond markets reacted quickly to shifts in macro expectations. US Treasury yields fell early in the week before edging higher again on Friday. Weak US data reinforced the narrative that interest rates may soon decline.

    Meanwhile, credit investors are watching the surge in AI-related bond issuance with growing caution. The rapid funding cycle behind data centres and infrastructure has prompted questions about whether credit spreads could widen if supply continues to build.

    Currencies: A Softer Dollar and a Volatile Yen

    The US dollar weakened against major currencies as markets priced in a greater likelihood of a December rate cut. The Japanese yen remained volatile amid speculation over potential intervention. The euro and sterling firmed slightly, driven more by movements in the dollar than by domestic economic strength.

    Commodities: Gold Extends Gains

    Oil prices were subdued, held back by stable OPEC+ production expectations and fading geopolitical pressures. Gold extended its fourth straight monthly gain as investors sought safety in a lower-yield environment. Industrial metals traded sideways, balancing soft manufacturing data against long-term optimism for AI-driven investment.

    Crypto: Quiet Strength in Digital Assets

    Bitcoin and other major cryptocurrencies edged higher, reflecting improving risk sentiment. However, trading volumes remained light, suggesting that investors remain selective despite the rebound.

    Top Five Market-Moving Events This Week

    Growing expectations of a December Federal Reserve rate cut boosted global equities and pushed yields lower. AI-driven technology stocks rebounded, lifting the Nasdaq and improving overall market sentiment. Asian equities rallied, with Japan’s Nikkei leading the region. US indices posted both weekly and monthly gains despite the shortened trading week. Rising concerns around heavy AI-related corporate debt issuance kept credit markets on alert.

    Five Smaller but Significant Developments

    Crypto prices improved in line with broader risk appetite. FX volatility stayed elevated, particularly for the US dollar and Japanese yen. Gold held firm, continuing its multi-month upward trend. Small-cap US equities outperformed, enhancing market breadth. Persistent uncertainty around US economic data left markets sensitive to surprises.

  • Market Wrap for Week Ending 14 Nov 2025

     

     

    Tech Stocks Lost Their Shine

    For most of the year, technology shares, especially those tied to artificial intelligence,  powered global markets higher. But this week, that confidence cracked.
    A sharp sell-off in major tech names dragged markets down, as investors began asking whether the “AI boom” has pushed valuations too far. Even giants were not spared after news of a major stake sale (Softbank selling NVIDIA) triggered a wave of profit-taking.

    When tech stumbles, the entire market feels it. Investors may start shifting towards more defensive sectors or value stocks if the AI trade cools further.

    The Federal Reserve May Not Cut Rates Soon

    Markets had been counting on the Federal Reserve to cut interest rates before the end of the year. This week, those hopes faded. Government bond yields crept higher as traders dialled back expectations for an imminent rate cut. With inflation still not fully tamed, investors now expect the Fed to stay cautious. If interest rates stay higher for longer, borrowing costs remain elevated — affecting mortgages, business loans, and the valuation of growth stocks. It also encourages investors to keep money in safer assets like bonds or cash.

    The UK’s Budget Shocked Markets

    Across the Atlantic, the UK government’s fiscal stance triggered market alarm. A decision to scrap planned income-tax hikes set off concerns about how the country will plug its budget gap. The reaction was swift: the British pound weakened, and UK government bond yields rose as investors questioned fiscal credibility. This episode is a reminder that even major economies can face sudden shifts in investor confidence. When governments surprise markets, borrowing costs rise and that can ripple through the broader economy. For global investors, it reinforces the importance of monitoring fiscal policy, not just monetary policy.

    Investors Are Moving Into Safer Assets

    This week saw a clear shift in investor behaviour. Money flowed out of equity funds and into bond funds for yet another week, marking a long streak of risk-off sentiment.
    Investors appear nervous about everything from expensive tech valuations to global economic uncertainty, and they are choosing safety over risk. When large numbers of investors move into bonds, it usually signals caution. It can also hint at slower growth ahead, as people choose safety over chasing returns.

    China’s Economy Is Showing Signs of Strain

    China posted a rare decline in fixed-asset investment, a key measure of spending on infrastructure, factories and property. This raised fresh concerns about the country’s economic health. With China being one of the world’s biggest growth engines, signs of weakness tend to make global investors uneasy. A slowing China affects everything from commodities to Asian markets to global supply-chains. If Chinese growth continues to stumble, the knock-on effects could be wide-ranging. Still, Chinese leaders are holding off large scale stimulus, as Xi tolerates slower growth in China’s richest province, a sign that indicates acceptance of slower growth rates as the economy grapples with the ongoing problems with the property sector and global trade tensions.

    U.S. Stock-Market Breadth Is Weakening (and That’s a Red Flag)

    • The NYSE Advance Decline Index for common stock has stalled, neither going up nor down. This indicates a tension between the bulls and the bears.
    • As of 14 November 2025, roughly 58% of S&P 500 stocks are trading above their 200-day moving average. The trend has been coming down since September.
    • The High Low index has also stalled. Like the Advance Decline index, it is consolidating, with no clear direction.

    These readings suggest the current rally is relatively narrow. A recovery in market breadth is necessary for the bull market to continue.

  • Market Wrap for the Week Ending 7 Nov 2025

    US Consumer Sentiment Plunged

    The University of Michigan consumer sentiment index fell to 50.3 in November, down from the previous month 53.6. The drop comes as the US federal government shutdown drags on, heightening household anxiety.

    AI Stocks Are Under Pressure

    AI stocks have been coming under pressure recently with a notable decline in their valuations and stock prices. The sector has faced selling pressure due to concerns about high valuations, potential bubble risks, and skepticism about whether the massive investments in AI will generate sufficient profits. Major AI-related stocks like Nvidia, Palantir, Oracle, and others have seen significant drops in their share prices over the past week, with declines ranging from around 7% to over 10%. This has contributed to broader tech sector weakness and market volatility.

     

    US FED Operating Under Data Fog

    Continuing US government shutdown means a lack of crucial datasets like the employment and the CPI reports. While private sector surveys are available, they are not as comprehensive as government ones. The risk of policy error rises, the longer the government shutdown prevails. The good news is that there is a glimmer of hope as some moderate Democrats are working with the Republicans to re-open the government.