1. US stocks slide as tech earnings disappointments.

Results from Amazon and Intel added to concerns over mounting AI infrastructure costs, spurring a slide in their shares in late US trading. The declines underscored growing unease surrounding the AI trade, as investors increasingly question whether shareholders will earn an adequate return on the enormous capital being deployed.”
“Investors are no longer dazzled by strong cloud growth when the spending bill keeps climbing and cash flows are coming under increasing pressure,” said Hebe Chen, senior market analyst at Vantage Global Prime Pty Ltd.
Alphabet Inc.’s stock lost more than 13% on Thursday, erasing more than $500 billion in its biggest-ever market plunge, after the firm reported disappointing search and advertising sales.

Below: Earnings growth is broadening beyond the MAG7.

2. AI spending concerns overshadow steady economic data.

Beyond inflation, the US economy continues to show signs of resilience. Advance third-quarter GDP growth came in at 3.4%, topping the 3.2% Reuters poll estimate, while initial jobless claims of 194,000 were below the 198,000 estimate.

Below: S&P on track for 26% earnings per share growth in the third quarter.

3. The US is experiencing a battery boom.

Electricity storage changes the equation. Batteries have been on the grid for years, mostly to prevent small and damaging power supply fluctuations. Cratering prices, however, have expanded their appeal. Battery costs have fallen by more than 90% in three decades, and the price per kilowatt hour tumbled another 8% last year according to BloombergNEF. Excess power can now be shifted in time to when there’s a deficit. The idea is simple: fill up batteries when prices are, say, $30 a megawatt hour, and then empty at $100. The owner pockets the difference, minus the energy lost in charging the battery, depreciation and other costs. The lower the cost of power, the more attractive the arbitrage becomes.
Samsung SDI (Korea) has secured >60Gwh of US ESS orders through October, and targets to secure another 60Gwh by the year-end. The average broker target is 38% higher than today.

Also, Chinese battery makers are locked out of access to the U.S. power grid and energy storage market due to security scrutiny.

4. Gold should remain supported by robust central bank purchases and physical demand.

Analysts cut their 2026 gold price forecast for a second straight quarter because of high Treasury yields, a strong US dollar and expectations that rates will stay high for longer, but still expect a recovery in 2027.
"We expect prices to consolidate and recover in coming months as market focus shifts to de-dollarisation and currency debasement," said a Standard Chartered analyst.
"Prices are likely to be underpinned by steady improved physical demand from India and China," said a StoneX analyst.
Continuing purchases by central banks "are sending the markets a message about managing risk" they added.
We are buyers at this level.

5. BCA believes the AI capex cycle could get extended.

“Rental rates of older-generation Nvidia GPU’s continue to rise, suggesting that the shortage of compute remains acute.

We are heading for an AI capex bust but probably not until 2028.”

Not a subscriber yet?