Is There a Potential AI Oversupply Problem?
What’s in Today’s Report:
- A Potential AI Oversupply Problem?
- Weekly Market Outlook – Looming IPOs and Key Inflation Data in Focus
Futures are mildly higher as tech/ semis lead (SOXX up ~3% pre-market after a 10%+ decline Friday) despite escalating geopolitical tensions over the weekend.
Geopolitically, military strikes between the U.S/Israel and Iran intensified this weekend, sending oil and yields higher despite President Trump’s calls for immediate ceasefire by all sides earlier this morning.
Economically, German Manufacturing Orders fell -3.8% vs. (E) -2.0% M/M in April, rekindling EU growth worries which is helping cap the early rise in bond yields.
Looking ahead to today’s session, there are no noteworthy economic reports due to be released in the U.S. and no Fed officials are scheduled to speak. However, the Treasury will hold 3-Month and 6-Month Bill auctions at 11:30 a.m. ET which could impact equities and other markets as Fed policy expectations took a hawkish turn last week (strong demand for the short-duration T-Bills would be a positive for stocks).
Finally, there are a few noteworthy earnings releases to watch: CPB ($0.48) and MTN ($8.97), but with geopolitical tensions on the rise and CPI data looming Wednesday, earnings are likely to take a “backseat” as far as market catalysts go in the sessions ahead.