Overview
- ECB Vice-President Luis de Guindos warned that highly valued U.S. tech stocks and AI hype could trigger a market correction, with concentrated exposures heightening the danger.
- De Guindos cautioned that open-ended funds’ liquidity risks and high hedge fund leverage could force fire sales in a downturn, pressuring euro-area non‑bank balance sheets.
- Goldman Sachs argued valuations have run ahead of macro reality and that returns could falter if growth slows or optimism fades, even as the bank stops short of calling a bubble.
- Credit markets are flashing caution, with tech bond spreads wider and Oracle’s bonds down about 5% since mid-September as Moody’s flags reliance on a few large customers.
- JPMorgan estimates global AI infrastructure spending will exceed $5 trillion, while reported studies find most firms have yet to see measurable profit gains and power constraints are slowing data‑center expansion.