英伟达等芯片股大跌，AI安全担忧与美债收益率飙升共振

THE COUNTDOWN IS ON. EVERYTHING YOU NEED TO GET THE EDGE AT THE END OF THE MARKET DAY. THIS IS THE CLOSE.

DARIO AMODEI HAS TRACED TO THE CALL AND IT'S COMING FROM INSIDE THE HOUSE. FROM STUDIO TO A BLOOMBERG HEADQUARTERS IN NEW YORK, I AM ROMAINE BOSTICK. ISABELLE: AND I AM ISABELLE LEE. THIS IS WHERE WE STAND. YOU ARE LOOKING AT A BIG CHIP SELLOFF WITH THE PHILLY SEMICONDUCTOR INDEX DOWN BY NEARLY 5%, DRAGGED BY THE LIKES OF NVIDIA AND BROADCOM COME AWAY ON THE BROADER MARKET. THE S&P DOWN BY .3%. THE NASDAQ DOWN .4%.

OF COURSE, IT'S REALLY ABOUT THE JITTERS WE HEARD OVER THE WEEKEND ABOUT THE EXISTENTIAL RISK OF AI. MUDDYING THIS PICTURE IS THE 10 YEAR YIELD AT .495. EARLIER TODAY, IT BREACHED THE 5% MARK AND THAT IS OF COURSE AS WE HEAD INTO THE FOMC MEETING ON WEDNESDAY, ROMAINE. ROMAINE: A LOT OF PRESSURE ON STOCKS. LET'S BE CLEAR. THIS IS NOT THE FIRST TIME THE ALARM HAS BEEN SOUNDED ABOUT AI SAFETY AND SECURITY CONCERNS BUT THIS TIME, IT ACTUALLY DOES FEEL A BIT DIFFERENT.

IT'S ONE THING FOR A RESEARCHER TO -- IT'S ANOTHER FOR THE CEO OF SAID COMPANY TO PUBLISH A MANIFESTO BASICALLY SAYING WE THINK THIS GUY HAS A POINT HERE IN ALL 30 MEMBERS OF THE CHIP INDEX IN THE RED. DELL, CORNING, CONSTELLATION ENERGY, ALL OF THOSE NOSE DIVING AS WELL. THIS IS THE UNWIND SOME FOLKS OUT THERE HAD FEARED NOT SO MUCH FOR THE FUNDAMENTALS BUT BECAUSE SO MANY WERE OVERWEIGHT AI STOCKS TO BEGIN WITH. EVEN THE SMALLEST SCARE OF A SPENDING SLOW WOULD CAUSE INVESTORS TO BAILOUT.

MAYBE IT IS SHORT-TERM NOISE. A BE OUT. INVESTORS HAD PUT 52 BILLION DOLLARS INTO TECHNOLOGY ETF'S ALONE AND THAT COMPARES WITH JUST 4 BILLION INTO THE REST OF THE STOCK MARKET. THAT IS THE LOPSIDED MISS THAT EVEN WITHOUT THE NOISE WAS DUE FOR A WRECKING. THE YIELD BACKDROP. A LOT OF THOSE WHO WERE FRESH CONCERNS ABOUT AI COMING AGAINST THE BACKDROP OF A MASSIVE RE-ACHE -- REAWAKENING IN ENERGY PRICES WHICH IS STOKING BROADER INFLATIONARY FEARS AND IS NOW FEEDING INTO A BOND MARKET THAT IS BACKING KEVIN WARSH INTO A BIT OF A CORNER AND TELLING HIM HE GOT TO DO SOMETHING, DUDE.

YOU NEED TO RESPOND TO THE PERSISTENCY OF INFLATION AND ACTUALLY THE MORE THEY ACT ON THE FRONT END, THE BETTER THEY PROBABLY CAN CONTROL THE LONG END. SO THOSE ARE THE THINGS I IMAGINE ARE WEIGHING ON THEIR MINDS AS THEY COME INTO THEIR DECISIONS THIS WEEK. ROMAINE: THE STUDIO BARCLAYS SPEAKING ON BLOOMBERG TELEVISION AS WE KICK YOU OFF TO THE CLOSE THIS MONDAY AFTERNOON. DEPUTY CIO OF THE SOLUTIONS AND MULTI-ASSET GROUP OVER AT MORGAN STANLEY INVESTMENT MANAGEMENT.

WE DO HAVE TO START WITH THE YIELD PICTURE, PARTICULARLY GO BACK TO LAST WEEK WHEN WE SAW MASSIVE REPRICING AND EXPECTATIONS OF WHETHER THE FED WOULD HIKE RATES AS OF RIGHT NOW THAT STANDS JUST SHY OF 90%. DO YOU THINK KEVIN WARSH IS GOING TO HEED TO THE MARKET SIGNAL OR MAY BE TRY TO BOOK IT? -- BUCK IT?

WITH U.S. NOMINAL GDP GROWTH, SOME IS JUSTIFIED. I AM NOT TOO WORRIED GIVEN THE NOMINAL GROWTH TRAJECTORY BUT IF YOU LOOK AT INFLATION NUMBERS, YES, THE HEADLINE IS HIGH BECAUSE OF THE OIL PRICES BUT THE CORE MEASURES, SOME OF THE COMPONENTS ARE NOT VERY CONCERNING IN MY VIEW. WE HAVE EQUIVALENT RENT. THOSE HAVE BEEN COMING OFF SO I AM NOT REALLY WORRIED ABOUT WIDESPREAD INFLATION SCARE AND IN TERMS OF, YOU KNOW, THE FED, THREE HIKES ARE ALREADY PRICED IN.

ISSUES OCCUR IN MARKET BEHAVIOR AND MARKET REACTIONS WHEN THERE IS A DISCONNECT FROM WHAT IS IN THE EXPECTATION SO YES, THERE COULD BE ONE HIKE FOR NOW. I DON'T THINK THIS REALLY TIPS THE MARKET OUT OF BALANCE FROM A FUNDAMENTAL PERSPECTIVE. ROMAINE: GET TO THE IDEA OF THAT MAY BE ONE HIKE, MAY BE MULTIPLE BECAUSE THAT SEEMS TO BE MORE THE FEAR, NOT SO MUCH THAT WE GET A 25 BASIS POINT HIKE ON WEDNESDAY. THE IDEA AS TO WHETHER THIS IS THE START OF A HIKING CYCLE, IF YOU DO BELIEVE MAY BE THE ECONOMIC CONDITIONS DON'T WARRANT THAT IS THE MARKET POSITION FOR THIS IDEA THAT THIS MIGHT BE A ONE AND DONE OR MAYBE A TWO AND DONE AND WE GET BACK TO NORMAL?

JITANIA: THE MARKET IS CLEARLY POSITIONED FOR THREE HIKES CLASS. I JUST KIND OF ZOOM OUT A LITTLE BIT AND THINK ABOUT WHAT DOES IT MEAN TO HAVE THIS MUCH PUBLIC DEBT AND THIS MUCH OF AN INCREASE IN PUBLIC DEBT? THE LAST TIME WE HAD THESE KIND OF EXPONENTIAL MOVES IN THE DEBT TO GDP OF THIS COUNTRY WAS DURING THE CIVIL WAR, WORLD WAR I, WORLD WAR II, AND COVID. ALL THOSE TIMES, YOU REALLY NEEDED FINANCIAL REPRESSION AS A NEGATIVE REAL RATE TO GROW OUT OF THAT DEBT PROBLEM.

OVERARCHING WAY, I THINK THE BIGGER TEMPLATE IN MY MIND IS THAT THIS KIND OF A SITUATION IN DEBT, WHERE DEBT HAS INCREASED SO MUCH REALLY NEEDS THAT FINANCIAL REPRESSION STORY TO GROW OUT OF THIS. OTHERWISE WHEN RATE HIKE, SOMETHING BREAKS -- BRINGS THOSE RATES DOWN AGAIN. ISABELLE: WHAT ABOUT EQUITIES? HAVE YOU SHIFTED TO A MORE BEARISH VIEW OF EQUITIES IN A WORLD WHERE WE WILL SEE MORE ELEVATED YIELD CURVES? JITANIA: WHAT IS REALLY INTERESTING THIS TIME, THE EQUITY EARNINGS HAVE BEEN REALLY POWERFUL SO THAT IS KIND OF OFFSET SOME OF THESE INFLATIONARY CONCERNS.

BOTH IN THE U.S. MARKETS BUT ALSO GLOBALLY IN MARKETS LIKE KOREA AND TAIWAN WHERE THEY ARE ENERGY IMPORTERS BUT THEIR EXPORTS ARE FOUR TIMES TO FIVE TIMES MULTIPLE OF WHAT THE ENERGY IMPORTS ARE. THERE HAS BEEN THIS SHIFTING OF PROFIT POOLS GLOBALLY THAT HAS HELPED. I THINK ON THE EQUITIES SIDE, THE STORY IS CLEARLY AI BUT I THINK AI IS A FULL STACK CAPITAL CYCLE. WE HAVE SEEN TODAY THAT THE 17% OF THE INDEX IS SME'S IN AN EVENT LIKE WE SAW TODAY IS LEADING TO THAT CORRECTIONS ARE REALLY DIVERSIFYING BOTH WITHIN THE U.S.

AND OUTSIDE THE U.S. IS THE WAY WE HAVE BEEN BUILDING PORTFOLIOS, JUST TRYING TO GET ANTI-CORRELATED SOURCES OF ALPHA SO WE ARE NOT DEPENDENT ON ONE HIGHLY CORRELATED TRADE. REAL ASSETS LOOKS LIKE A GREAT OPPORTUNITY BOTH AS A MONETARY HEDGE BUT ALSO AS A GEOPOLITICAL HEDGE IN PORTFOLIOS. THAT IS ANOTHER AREA THAT IS VERY IMPORTANT BUT POCKETS OF JAPAN WITH THE YEN STRENGTH, MARKETS OF EUROPE WITH ALL OF THE SPENDING THAT IS HAPPENING THERE, THE DELEVERAGED CREDIT CYCLES GLOBALLY AND SOME OF THESE OPPORTUNITIES ACROSS SMALLER MARKETS WHICH HAVE COMMODITIES TO HELP TERMS OF TRADE AND THAT IS SPILLING OVER TO DOMESTIC ECONOMIES POSITIVELY TO DRIVE DOMESTIC CYCLES.

THESE ARE OTHER EQUITY OPPORTUNITIES THAT ARE LOOKING INTERESTING. WORDS LESS SYNCHRONIZED BUT MORE INVESTABLE. ISABELLE: THE EARNINGS WILL BE AS HIGH. THEY WILL BE HALF ACCORDING TO SOME ESTIMATES. A LOT OF EXPANSION IS ALREADY EMBEDDED IN THE EARNINGS FOR NEXT YEAR. HOW ARE YOU GOING TO SQUARE THAT? JITANIA: IT'S IMPORTANT TO REALLY BE DISCERNING IF YOU HAVE THE HARDWARE SIDE WHERE THE EARNINGS, YOU KNOW, THE ANALYSTS HAVE MOVED THE EARNINGS OUT.

WE HAVE TO REALLY LOOK OUTSIDE THE AI ENABLERS WHICH HAVE BEEN THE INFRASTRUCTURE SEMI-COMPANIES FOR THE AI ADAPTERS AND WE ARE ALREADY SEEING THAT IN SOFTWARE THAT IS DOING ACTUALLY VERY WELL. CYBER THAT IS DOING VERY WELL BECAUSE WHO IS GOING TO USE THESE AI'S, THESE AGENTS AND BUILD THEM INTO BUSINESS MODELS TO REALLY HELP THE BROADER CORPORATE AMERICA TO GET SYNERGIES ON COSTS ON BUSINESSES? THE PROFIT POOLS WILL SHIFT LIKE THEY ALWAYS DO.

SO IT REALLY KIND OF THINKING ABOUT WHICH DIGITAL PLATFORMS AND WHICH SECTORS WILL DO WELL. ROMAINE: GOT TO LEAVE IT THERE. DEPUTY CIO OF THE SOLUTIONS AND MULTI-ASSET GROUP AT MORGAN STANLEY INVESTMENT MANAGEMENT, KICKING US OFF TO THE CLOSE AS THE HEAD OF THE SEASON KICKS OFF IN THE U.S. AND SO TOO DOES HIGH SEASON FOR SPORTS BETTING. WE WILL CATCH UP WITH THE CEO OF THAT IN GM, ADAM GREENBLATT, IN JUST A SECOND. ISABELLE: A NEW VISION FOR YOUR WARDROBE.

WHAT NOT TO WEAR STAR BENNETT -- TALK TO A NEW WAY TO MANAGE APPAREL. ALL OF THAT, COMING UP. THERE IS ONE MORE FOR YOU. ROMAINE: WE ARE GOING TO CATCH UP WITH THE CEO OF AUTHENTIC BRANDS. STICK WITH US. WE WILL BE RIGHT BACK HERE ON BLOOMBERG. ROMAINE: ANTHROPIC'S CEO: ON AI PLATFORMS TO SLOW DOWN THE DEVELOPMENT OF THE MOST ADVANCED MODELS. IN HIS THINK PIECE, HE SAID I HAVE BECOME CONVINCED