Opening without major changes (Eurostoxx futures -0.1%, S&P -0.1% and Nasdaq 0%), after a day yesterday in which concerns about financing weighed again on AI trade, with the focus on the expansion of CDS. Nevertheless, results continue to support the fundamental demand for computing and capex in AI. Other positive topics include cyclical and industrial recovery, pricing power, and solid consumption, although doubts are growing about input cost pressures. Despite the negative tone towards AI, the rotation, more than a widespread aversion to risk, is offering some selective cushioning, especially in defensives and in sectors sensitive to rates.
On the corporate front, OpenAI is looking to raise around 30 billion dollars in a new round and, in the final stretch of negotiations, is aiming for a valuation of 1.25 trillion USD, according to sources familiar with the process. The figure represents a cut of 150 billion compared to the 1.4 trillion that were being considered. Discussions remain open and conditions could change.
Regarding the situation in the Middle East, tensions are rising amid signs that the United States is contemplating a new round of attacks against Iran. Trump stated last night that he is not negotiating and that “something” will happen relatively soon. For its part, Iran claims to have attacked four tankers and that three others collided with mines near the Strait of Hormuz. Regional mediators are working to reactivate negotiations, although recent headlines about diplomatic advances have largely proven to be empty. Brent rises with the escalation above 114 dollars/barrel, and European gas at a four-year high above 91 dollars.
Flight to government debt
Yesterday we saw a flight to American government debt (T-bond -17 bp to 4.96%) and German (Bund -9 bp to 3.33%) acting as a safe haven, as well as the yen; however, gold falls below 4,000 dollars an ounce and marks a three-month low dragged down by widespread selling in the stock market. A movement that suggests a sell-off for liquidity for margin hedges and capital requirements typical of sharp declines in equities. It seems that the level of 3,900 dollars appears as a key support to watch, although short-term sentiment remains cautious, in a context where pressure in France continues to intensify, with the 10-year yield at 5.1% and the differential vs Germany increasing +15 bp to 174 bp. Today Moody’s, after market close, will review the rating, currently at Aa3 with a negative outlook.