Stocks Gain on AI Optimism Despite US Inflation Concerns

Global Markets & Technology

• Asian equity indices climbed for a third consecutive day, led by Taiwan's High-Tech Index (up ~3.6%) and South Korea's KOSPI (up >2%).
• U.S. NASDAQ futures surged following CoreWeave's Q3 earnings beat and a raised full-year revenue and profit outlook.
• CoreWeave reported Q3 revenue and profit slightly above market expectations, with CEO citing ~$9 billion in expected customer prepayments over the next three months to fund capacity expansion.
• Anthropic bankers are reportedly exploring a valuation increase for the upcoming IPO, targeting a range of $1.4–$1.5 trillion, with pricing anticipated next Wednesday.
• TSMC contributed significantly to regional gains (up ~5%), driven by 60% month-over-month sales growth and a commitment to invest $500 million each into Anthropic and OpenAI.
• OpenAI reported Q3 revenue of ~$10 billion with an annualized run rate of $50 billion, growing 50% sequentially but remaining below Anthropic's ~$17 billion quarterly revenue.
• SoftBank Group shares fluctuated significantly after reporting a $3.7 billion write-down on data center projects, resulting in a net loss; concerns were partially offset by broader tech sector optimism.
• Morgan Stanley issued downgrades for memory chip makers, noting weaker demand for older generation chips despite strong AI demand.

Corporate Earnings & Strategy: Siemens Energy

• Siemens Energy reported Q4 profit before special items of €1.54 billion, beating market estimates, while Q4 orders came in slightly below estimates at €14.82 billion.
• The company announced a €10 billion share buyback program and projects profit margins to reach 14–16% by 2027 and potentially up to 22% by 2030.
• CEO Christian Brue stated the company maintains a €16.4 billion profitable backlog, with less than 10% attributed to data centers and the remainder focused on classical infrastructure and electrification.
• Brue affirmed that nuclear power is complementary to gas generation, not a replacement, noting nuclear currently accounts for 10% of global electricity and will not exclude gas infrastructure growth.
• Despite Democratic midterm wins in the U.S. hinting at pushback on data centers, Brue cited physical construction constraints and long lead times as limiting factors rather than political shifts.
• The company generated close to €9 billion in cash flow in 2026, balancing capital allocation between shareholder returns (dividends/buybacks) and organic infrastructure investment.

Macroeconomics: Inflation & Central Banking

• U.S. short-term Treasury yields surged to their highest levels in 19 months following a hotter-than-expected CPI print and hawkish Fed commentary.
• Chicago Fed President Austin Goolsbee described the inflation report as "borderline disturbing," signaling that officials must address price pressures aggressively.
• Markets are now pricing in a Federal Reserve rate hike before year-end, with Goldman Sachs forecasting three potential hikes (December, January, and Q1 2025).
• A 50-basis point rate hike in December is deemed unlikely, but Fed officials are reinforcing that further tightening is necessary to combat stubborn inflation.
• Bundesbank President Joachim Nagel indicated that 2–3% inflation in Germany and 4% in the Eurozone are too high, suggesting further ECB rate hikes are necessary to prevent second-round effects.
• Latvian Central Bank Governor warned that further monetary tightening may be required if high energy prices spill over into broader inflation and services.
• Portfolio shifts show a move away from equities toward fixed income, with hedge funds adopting a defensive posture following a historically poor October.

Geopolitics & Trade

• U.S. and Ukraine leaders described recent trilateral peace talks as "constructive" and "substantive," with U.S. Secretary of State Marco Rubio emphasizing Europe's role in security guarantees.
• Key sticking points in negotiations include Ukraine's demand for credible security guarantees against future Russian aggression and Russia's refusal to allow Western troops on Ukrainian soil.
• U.S. Treasury Secretary Scott Bessent highlighted improved AI dialogue with China, including plans for direct channels to alert on serious incidents involving AI models.
• House Republicans blocked an impeachment attempt against Defense Secretary Pete Hegseth, with the measure effectively stalled until the Democrats take control of Congress in January.
• The UK government has ruled out automatic alignment of financial service rules with the EU, maintaining it as a "red line" despite ongoing talks for a summit later this month.
• Nissan reported a Q2 net loss of ¥43.47 billion, missing profit estimates, though the company maintains its full-year net income forecast at ¥20 billion amidst a restructuring effort.

Energy & Climate

• COP31 in Turkey is expected to lack major new global goals due to geopolitical tensions, with a focus instead on bilateral agreements and roadmaps for transitioning away from fossil fuels.
• Bloomberg reporting highlights significant gaps in climate models, with heat accelerating faster than predicted in Europe and the U.S. Southwest becoming drier than simulated.
• Turkey aims to electrify 35% of its energy sources by 2035, seeking to reduce energy import dependence which has cost the country up to $100 billion annually in peak years.
• Emirates President Tim Clark noted the airline is operating at 92% of pre-conflict capacity, with growth constraints driven by aircraft engine supply chains rather than demand or fuel costs.
• Clark stated Emirates will not engage in discounting to rekindle demand, focusing instead on premium product quality and capacity expansion as supply chain issues resolve.