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1. OpenAI going for world domination with another deal.

Broadcom flew after news it had agreed to supply OpenAI with massive amounts of computing power and specialized datacenter chips. Broadcom will supply server racks, and OpenAI’s other partners will run them, a detail that sent the whole industry higher Monday.

Each additional Gigawatt of power costs upwards of $35Billion a piece, according to Bloomberg. Altman told his staff in a leaked report from The Information that he wants his hands on 250 gigawatts of processing power by the end of the decade, a tall order with an estimated $10 trillion price tag. The company hopes to pull in just $13B this year.

Below: Tech roared green on Columbus Day.

2. Morgan Stanley’s says S&P 500 risks 11% drop on Trade War.

Chip stocks rose after Trump's more conciliatory tone that he wanted to help China, not hurt it.

But China could ride out any trade tensions since the U.S. is no longer as important a market as it once was for Chinese exports, notably in fast-growing sectors like lithium batteries, electric cars and chips.

Below: China exports of High Tech goods are rising. (Source BoA)

3. Investors will focus on earnings season this week with US stocks priced for perfection.

Analysts tracked by Bloomberg Intelligence expect profit growth of 7.4% for US stocks in the third quarter. However, a Citigroup index tracking US earnings revisions — the number of analysts upgrading versus downgrading estimates — turned flat for the first time since August.

If last season’s strong sentiment around earnings can’t be maintained, stocks may face “a period of digestion”.

High valuations also leave little patience for companies that don’t meet the bar. The S&P 500 trades at 22 times P/E, a big premium to the rest of the world.

4. Over-exposure to the US is no longer the favored equity allocation strategy, with Europe, Asia and emerging markets now credible alternatives.

Market participants point to a broad shift in mindset among foreign investors, who have started backing domestic champions in the face of President Donald Trump’s unpredictable trade and policy moves.

These have shaken confidence in America, weakened the dollar and helped stoke a powerful rally in gold. “The last two years have only been about the US and nothing else because tech earnings were surging while everything else was down to flat,” said Beata Manthey, head of European and global equity strategy at Citigroup.

“This year, the growth differential between the AI trade and the rest of the world has narrowed, and it’s going to narrow even more next year. So there’s are more themes to choose from.”

5. European Utilities are expected to continue outperforming the market into year-end from underowned & undervalued levels.

The sector remains at an unusual 9% discount to market P/E, despite better growth visibility and lower risks, and with European and International funds still positioned underweight vs benchmark.

Furthermore, energy policies remain more supportive than market concerns, power prices remain at attractive levels, attention is turning to rising European power demand, and we continue to expect bond yield declines ahead, which should act as a re-rating tailwind.

Below: YTD Utilities index has outperformed the market 7%

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