The chips are down
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Why are US equity markets dropping and how is AI influencing the sell‑off?
US inflation numbers are out today that might distract attention from the share market, which is clearly worried about AI again costing too much or decimating the software industry. Take your pick. Uh the UK economy is growing but only just. And the journey for Japanese government bonds. Uh now political certainty is established there. It's Friday, it's the thirteenth of February. Oh dear, twenty twenty six. It's the morning call from NAB. Good morning. US equity is quite a bit lower today, one point five percent off the Nasdaq. The SP is down one and a quarter percent. The DAX, meanwhile, close flat. The CACCARORANT up a third of one percent. I do like saying that. And the uh FTSE one hundred uh down naught point seven percent.
Bond yields are lower, down four basis points for ten year treasuries to four point one three percent, down one or two across Europe. Aussie ten years added five basis points yesterday to four point eight percent today on F. Futures though a few basis points lower. The US dollar is flat, the Aussie has lost naught point six per cent, just below seventy one US cents now. The yen has added another naught point four per cent. And oil down today, two point eight percent lower for Brent and WTI Brent just below sixty seven fifty. Spot gold is down two point two per cent, comic silver losing seven and a half per cent, and Bitcoin down one point six per cent, down over twenty.
What does the recent stability in Japanese politics mean for JGB yields and the yen?
In the last month in uh in dollar terms. Uh so how are things this morning? Well, here's Nabsray Atrill. US shares taking uh quite a hit. I mean, they have been doing very well, of course, so let's keep that perspective. But it is the AI story again. Fears of overinvestment or rising costs, whatever the reason. Um, we look and we see IT and financials down about two percent today. Apple. Down almost five percent, Cisco down eleven percent.
Yeah,
good
morning. It does definitely seem to be a very sort of tech sector led sell off. So um if I looked at the S P five hundred on an equal weighted basis, um you'd actually see that it's actually up about not point two percent. So very much a technology driven route, if that's what we want to call it. And as you mentioned, Cisco, um, you know, the software the networking company um uh putting out guidance that its margins are much less. think than than the market was hoping to hear uh as a result of higher chip costs in particular. Um so they've led the decline, but it is that software as a service sector. I was looking at an ETF of of software companies that's off over 4%. So you know going back a few weeks and obviously when you know Anthropic you know announced the the launch of its latest um Argentic AI system, we've seen software
companies under pressure since then and no more so than overnight. But uh as I say, this isn't really a a broad based route, even though, you know, if you look across other markets that we'll talk about, um, they're all consistent with uh you know, with a fairly pronounced sell-off as far as the major indices are concerned. So uh, you know, defensive qualities in bonds and and some safe haven currencies are very much showing through in the last twelve hours or so.
How are US jobless claims and continuing claims shaping the labour‑market outlook?
Including the Aussie dollar. Yes, absolutely. So yesterday, incidentally, we made a new post, I think it's June twenty twenty three high of seventy one forty seven. And uh and here we are back below seventy, and it's actually down about what, point five, point six um on the last twenty four hours is actually the worst performing G ten currency.
Yeah, for today. Uh but Japan, um, we've got the uh the rise in the yen and uh bond yields taking a bit of a journey since we've supposedly now got some stability in the government over there.
Well, yes, but uh, you know, for our money, we're not yet convinced that um, you know, all the concerns that were being expressed, you know, in the lead up to the election about desires for easier fiscal policy, with um, you know, that the government intent on ensuring that the Bank of Japan policy remains sort of ultra easy, um, have really gone away.
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Chapters
8 chapters
1
Why are US equity markets dropping and how is AI influencing the sell‑off?
0:01–1:18
2
What does the recent stability in Japanese politics mean for JGB yields and the yen?
1:18–3:02
3
How are US jobless claims and continuing claims shaping the labour‑market outlook?
3:02–6:10
4
Why is the UK’s GDP growth so weak and what does weak business investment indicate for future growth?
6:10–7:40
5
What are the key takeaways from RBA Governor Sarah Hunter’s speech on full employment and inflation?
7:40–9:25
6
What are expectations for the US CPI release and how could it affect the Fed’s disinflation path?
9:25–11:26
7
How might lower interest rates impact rent inflation and housing costs in Australia?
11:26–13:14
8
What does the latest New Zealand net‑migration data reveal about its economic recovery?
13:14–14:11