Public Markets 8-Hour Briefing
×Market Selloff Accelerates
US stocks tumbled as AI disruption fears intensified, with the S&P 500 sinking and software shares plunging. The selloff was fueled by Citrini Research warning about AI risks to the sector, while Nassim Taleb cautioned about potential bankruptcies in software companies.
IBM Plunges on AI Disruption Fears
IBM shares suffered their worst day in over 25 years after Anthropic touted its Claude Code tool's ability to modernize COBOL programming. The AI startup's announcement sent IBM stock tumbling 10%, highlighting growing concerns about AI's impact on legacy technology companies.
Bond Market Rallies
Treasuries jumped as investors sought haven assets amid trade war uncertainty. The flight to safety came after President Trump vowed to press ahead with his tariff regime, injecting fresh volatility into global markets and driving yields lower across the curve.
ETF Industry Developments
A new GENIUS ETF saw massive $17 billion inflows, while active ETFs continue gaining traction as asset managers race to bring actively managed products to market. The ETF industry is also exploring new frontiers including space economy and prediction markets.
Private Markets Under Pressure
Private equity returns slumped for the fourth straight year as the industry struggles with $3.8 trillion in unsold assets. Meanwhile, Blue Owl is becoming a cautionary tale in private credit, highlighting risks in exotic products.
Corporate News and Deals
Global Medical Response has selected banks for a US IPO, joining other companies looking to access public markets. In Canada, Apotex Inc. is targeting a C$1 billion IPO in the first half of the year.
Software Sector Under Siege
The software sector faced renewed selling pressure as concerns about AI disruption intensified. Citrini Research warned about AI risks, while options traders piled into bets against software-exposed loan ETFs, anticipating further sector weakness.
Payment Stocks Hit
PayPal attracted takeover interest after its stock slump, while broader payment stocks were hit by the AI scare trade. The sector's weakness reflects growing concerns about how AI could disrupt traditional payment processing models.
Manufacturing and Trade
US factory orders fell 0.7% in December, while durable goods orders dropped 1.4%, signaling potential weakness in manufacturing. Trade uncertainty continues to rattle markets as companies grapple with tariff implications.
Energy and Utilities
Eversource Energy raised $1.5 billion from its first hybrid bonds as the New England utility looks to refinance debt. Meanwhile, natural gas futures fell to four-month lows as a blizzard in the Northeast created mixed demand signals.
Technology and AI
Nvidia is set to report strong results ahead of its annual GTC event, though the broader AI trade is punishing other Big Tech names. The sector faces a potential "dystopian AI-driven job crisis" that some see as another catalyst for AI adoption.
Banking and Financial Services
Thames Water's senior creditors are seeking approval for a crucial rescue plan to prevent insolvency. In the US, Scott Bessent said Treasury is closely monitoring the private credit market amid growing concerns.
Real Estate and Infrastructure
High Star plans a $100 million bond sale for a luxury Utah resort, while F2i SGR nears €1 billion as demand grows for private infrastructure financing in Europe. The frozen housing market continues to pressure US manufacturers.
Healthcare and Pharmaceuticals
Novo Nordisk faced another setback as its next-generation obesity shot delivered less weight loss than Eli Lilly's rival, dealing a blow to the Danish company's attempts to regain ground in the weight-loss market.
Automotive Industry
Mazda is among global automakers facing renewed pressure after Trump announced a new 15% global tariff, raising fresh questions about costs, pricing and demand across the industry.