Last week, Alexander 'Alty' Altmann noted that capex headlines from hyperscalers overshadowed the FOMC decision. Statistical analysis confirms this, with JPMorgan's natural language model scoring Fed Chair Kevin Warsh lower on forward guidance than Jerome Powell. This lack of guidance may contribute to higher bond volatility and term premiums.
Altmann also highlighted that corporate spending alone may not justify AI valuations; consumer adoption is crucial. However, consumers are reluctant to spend on software, and even corporations like Goldman Sachs are restricting AI tool usage due to productivity and risk concerns. Elon Musk's Grok Bot and Meta's Muse are throttling usage, indicating demand-side challenges in the AI trade.
Meanwhile, Texas elections could impact AI infrastructure development, and the structured note market is booming across Asia and the US.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing