Asia Tech Rally Defies SoftBank AI Concerns

U.S. Inflation and Federal Reserve Policy Shift

• October U.S. Core CPI rose 0.3% month-over-month, exceeding expectations and broadening price pressures beyond energy to food, used cars, and education.
• Fed Governor Christopher Waller stated a 0.3% core increase necessitates debate on a 50 basis point hike in December, warning that a 25 basis point move would risk credibility.
• Dallas Fed President Lori Logan and other officials signaled at least two more 25 basis point rate increases are needed, shifting market bets from a December pause to a confirmed hike.
• Market reactions include two-year U.S. yields briefly surging past 5% and 10-year yields retesting the 5% level as traders reassess fixed income positioning.
• White House Council of Economic Advisers Chairman Chris Faughn downplayed the need for a 50 basis point hike, citing a 24% drop in Brent crude prices in November as a potential deflationary offset.
• ECB Chief Economist Philip Lane indicated a rate hike in December would be prudent if energy shocks persist, while noting fiscal tightening and AI impacts as key variables.

AI Sector Valuations and Corporate Earnings

• Anthropic filed for an IPO targeting a $1.4 trillion fully diluted valuation, with the offering priced for November 18 and trading commencing November 19.
• Backers are reportedly considering raising the offer price above the initial $70–$78 range due to heavy investor demand, with total capital raising potentially exceeding $90.4 billion.
• SoftBank reported a $7.1 billion net loss in Q2, its first in nearly two years, driven by a $3.7 billion write-down on U.S. data center projects and doubled interest expenses.
• CoreWeave raised its annual sales forecast to $13.3 billion (up from $13.2 billion), indicating robust demand for AI compute despite broader market volatility.
• TSMC announced combined $1 billion investments in Anthropic and OpenAI, alongside a 59% increase in monthly sales, reinforcing its dominance in the AI hardware supply chain.
• Otter.ai announced a $320 million funding round and expanded language support to seven new Asian markets, aiming to commercialize its voice AI across enterprise sectors.
• Cohere achieved a $25 billion valuation following a funding round led by Nvidia and the Canadian government, focusing on sovereign AI and data sovereignty.
• Investors are scrutinizing "circular financing" dynamics within the AI sector, where chipmakers like Nvidia invest in AI labs that subsequently purchase their hardware.

U.S. Political and Geopolitical Developments

• The U.S. House voted 211-204 to block impeachment proceedings against Defense Secretary Pete Hegseth regarding military actions in Iran and Venezuela.
• Procedural hurdles prevent the resolution from reaching the Judiciary Committee; however, Democrats are expected to revive the effort upon taking control of Congress in January.
• Investigations are ongoing into Nvidia CEO Jensen Huang's personal relationship with a Singapore-based executive, raising concerns over potential export control violations and national security risks.
• Bloomberg analysts note that U.S. midterm election outcomes are influencing AI capital expenditure caution and calls for data center moratoria in the U.S.

Asian Market Performance and Economic Data

• South Korea's unemployment rate fell to 2.5% in October, adding 139,000 jobs, while first-ten-day export data surged 111% year-over-year, driven by the AI boom.
• Japanese equities remained resilient despite SoftBank's stock falling roughly 9% and Treasury yield pressures, with the yen trading near 158.8 against the dollar.
• Taiwan's market performance is decoupled from U.S. tech sell-offs, with TSMC driving gains despite some research downgrades and margin trader profit-taking.
• Gold prices fell up to 3% following the U.S. inflation data and rising yields, though silver showed minor gains as traders await further liquidity signals.
• Hong Kong IPO market sentiment has cooled, with recent listings showing mixed performance compared to the summer's one-way booms, as institutional investors demand better discipline.

Global Outlook and Strategic Shifts

• Analysts project U.S. rates at 4.25% by year-end, pausing in Q1 2027 before three quarters of cuts, potentially easing pressure on rate-sensitive assets like Hong Kong stocks.
• Bank of Japan officials have signaled a quicker pace of monetary tightening, with a 25 basis point hike in December now on the table for the first time in years.
• China's "Singles' Day" shopping festival data is expected to show slower growth (approx. 4.4% GVN), with a strategic shift toward instant retail (projected 50% growth) over traditional marketplaces.
• Sovereign AI and data center infrastructure remain critical investment themes, with "middle powers" like Canada and Australia emphasizing the need for diverse, values-aligned technology ecosystems.
• APEC and ASEAN leaders' summits are scheduled for next week, with anticipated discussions on AI governance, supply chain resilience, and geopolitical stability.