Regional equities experienced broad losses on Monday as heavy spending on data centers faced mounting skepticism over long-term profitability. Tech sentiment was further rattled by a 29 percent drop in Intel shares last week, focusing attention on upcoming reports from Apple, AMD, and Palantir. Broader market unease was also heightened by significant investor withdrawals from Binance following a multi-billion-dollar hack. Meanwhile, Western equity futures posted modest gains as traders awaited global interest rate decisions and U.S. employment figures.
Key points
Investor tolerance for high capital expenditure is waning as debt insurance costs rise an…: Investor tolerance for high capital expenditure is waning as debt insurance costs rise and data centers face potential political roadblocks.
Upcoming earnings from firms like Apple and AMD will determine whether technology valuati…: Upcoming earnings from firms like Apple and AMD will determine whether technology valuations can withstand slowing investment growth.
Markets are bracing for significant macroeconomic volatility with looming U.S. payroll da…: Markets are bracing for significant macroeconomic volatility with looming U.S. payroll data and potential rate increases from multiple central banks.
Sources checked by our analysis pipeline: 1
SYDNEY, Nov 2 : Asian share markets slipped on Monday as worries about the sustainability of the AI investment boom loomed over the tech sector, while the high price of oil limited the safe-haven appeal of sovereign bonds.
Concerns about negative cash flow and the sheer scale of AI capex saw the cost of insuring against corporate defaults blow out last week, while gold hit a one-year low amid talk stressed investors were selling to raise money for margin calls.
An added wrinkle is the midterm elections in the United States, where a win by Democrats in either or both houses could result in more political hurdles for data centres.
Adding to the air of unease were withdrawals from Binance as the world's biggest cryptocurrency exchange went back online on Sunday after hackers stole billions from the platform last week.
All of which raises the stakes for earnings this week with Apple, AMD and Palantir set to report in the wake of Intel's near 29 per cent tumble on Friday.
Analysts at Goldman Sachs expect capex by hyperscalers to almost…
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