韩国数据中心IPO破发致AI股回调，Softbank信用违约互换飙升

VONNIE: GOOD MORNING, LET'S GET YOU SET UP FOR THE DAY. IPO FLOP FOR THE SOUTH KOREAN DATA CENTER FIRM, PUTTING A PAUSE ON AN AI STOCK RECOVERY. PRESIDENT ZELENSKYY HEADING TO NORWAY FOR A NEW PEACE TALK AT THE FRICTION BETWEEN THE U.K. AND -- UKRAINE AND THE U.S. DEEPENS. AND A HOST OF EARNINGS REPORTS ON DECK INCLUDING SPACEX, NETFLIX, GENERAL MOTORS AND FENCE GIANTS RTX AND NORTHRUP. LET'S GET A CHECK ON MARKETS AROUND THE WORLD HEADING INTO THE SECOND TRADING SESSION OF THE WEEK.

LET'S START WITH OLIVIA WITH THE LATEST FROM ASIA. OLIVIA: GOOD MORNING. ANOTHER DIFFICULT DAY FOR ASIAN STOCKS, PARTICULARLY THOSE AI AND CHIP PLAYERS. SOFTBANK'S CREDIT DEFAULT SWAPS ROSE TO THE HIGHEST LEVEL IN NEARLY FOUR YEARS WHILE OF COURSE THAT THEY VIEW BY ELICE HAD STOCKS CLIMBED NEARLY 33%. THERE IS ONE BRIGHT SPOT AND THAT IS INDONESIA. STOCK EXCHANGE OPERATOR ANNOUNCING THAT THEY MAY TAKE EFFORTS TO EXPEL TIGHTLY HELD COMPANIES FROM ITS BENCHMARK INDEX, AND THAT IS ALL IN AN EFFORT TO AVOID EXCLUSION FROM THE EMERGING MARKETS INDEX.

ON THAT HEADLINE WE SAW INDONESIA'S STOCK MARKET JUMPING ABOUT 5%, SO THAT IS ONE BRIGHT SPOT IN AN OTHERWISE DISMAL SHOWING FOR ASIA. VONNIE: THANK YOU SO MUCH. THAT'S TAKE A LOOK AT EUROPE, NOT SO MUCH BECAUSE OF FRANCE, FRANCE NOT PARTICULARLY OUTPERFORMING TO THE DOWNSIDE, BUT THERE IS STILL A PULL OF UNREST ACROSS THE WHOLE OF THE REGION. WE HAVE THE STOXX 600 DOWN, JUST A FEW MOVES HIGHER LEADING THEM, HEALTH CARE.

THE FRENCH 10 YEAR YIELD AT 4.93, VERY CLOSE TO 5% AND THAT SPREAD BETWEEN FRENCH OATS AND GERMAN BOMBS HIT 150 BASIS POINTS, EVEN IF THE PROTESTS HAVE BEEN QUELLED JUST A LITTLE BIT. WE ARE SEEING THE EURO HOLD ABOVE 1.12, PRIMARILY BECAUSE OF IT WITH A BIT OF DOLLAR WEAKNESS TODAY. LET'S TAKE A LOOK AT THE U.S. OUTLOOK, AFTER EIGHT DAYS OF DECLINES. RIGHT NOW WE HAVE S&P FUTURES FIGURING OUT WHAT THEY ARE GOING TO DO, NASDAQ FUTURES COMING UP A LITTLE BIT AND RUSSELL 2000 FUTURES ALSO JUST BARELY HIGHER, SO WE WILL JUST WAIT AND SEE WHAT MOOD TAKES THE MARKET TODAY.

PLENTY OF THINGS TODAY JUST INCLUDING THAT FAILED IPO IN ASIA AND WHETHER IT BLEEDS ACROSS TO THE U.S. WE DID HAVE A NICE DAY YESTERDAY FOR THE NASDAQ 100. WE ARE DOWN A COUPLE OF BASIS POINTS. THE 30 YEAR YIELD HOLDING IN AROUND THE 5.45 MARK, ESSENTIALLY STABLE FOR YIELDS. THAT'S TAKE A LOOK AT SOME OF THE OTHER THING WE ARE WATCHING TODAY. WE ARE GOING TO BE SPEAKING ABOUT ALL OF THAT WITH JEANNE SUN WHO IS GOING TO JOIN US ON THESE MARKETS.

JEANNE SUN OF CITI. SO THIS GET BACK TO THE MARKET STORY OUT OF ASIA. JOINING THIS IS EXECUTIVE EDITOR PAUL DOBSON. PAUL, THIS FAILED IPO, THIS IS THE SECOND ONE OUT OF ASIA NOW IF YOU COUNT THE AUSTRALIA IPO THAT DIDN'T HAPPEN A COUPLE OF WEEKS AGO. IS THIS A PARTICULARLY ASIA STORY, OR JUST A BROADER MARKET STORY? PAUL: YEAH, SO I THINK THAT THIS ADDS MORE FUEL TO THE FLAMES AROUND THE AI AND THE DATA CENTER TRADE AT THE MOMENT.

IT IS ONLY A RELATIVELY SMALL IPO, $150 MILLION, BUT THE MARKET TRADING AS IT GOT GOING TODAY WAS JUST ABOUT THE WORST PERFORMANCE FOR ANY SIGNIFICANT FUNDRAISING IN SOUTH KOREA, SO THAT SORT OF SPEAKS TO THE EXTENT OF THE JOB WHICH WAS AS MUCH AS 38% AT ONE TIME, BACK TO 32% TO CLOSE. IT IS PART OF THIS TREND THAT WE ARE SEEING IT, INVESTORS PUSHING BACK AGAINST THE VALUATIONS OF THE DATA CENTER-RELATED COMPANIES. WE SAW THAT AS YOU WERE SAYING IN AUSTRALIA, WHICH REARRANGED THE TERMS FOR ITS OWN FUNDRAISING AND THEN THE PUSHBACK IN EUROPE AS WELL.

YOU GET SIMILAR NEGOTIATIONS GOING ON WITH SOME OF THE FIRMS LOOKING TO LIST. SO IT SORT OF ADDS TO THAT FEELING OF UNEASE THAT THERE IS AROUND THE VALUATIONS THAT THESE COMPANIES ARE LOOKING TO RAISE AT THE MOMENT IN THE MARKET AND THE BUSINESS MODELS THAT THEY ARE PURSUING. ALL OF THAT IN ADVANCE OF THE BIG IPO WE ARE WAITING FOR FROM ANTHROPIC LATER IN THE YEAR, WHICH WILL REALLY BE ONE OF THE BIGGEST TESTS FOR INVESTORS ON THE AI THEME.

VONNIE: ARE ALL THESE NECESSARY? IN THE U.S., COREWEAVE IS THE OBVIOUS POSTER CHILD, YOU SEE BONDS TRADING IN DISTRESS AT THE MOMENT. BUT THERE ARE LOTS MORE AND EACH ONE HAS MAY BE SLIGHTLY NICHE OFFERINGS FOR THEIR CUSTOMERS, BUT ALSO EACH ONE HAS JUST A VERY SMALL NUMBER OF CUSTOMERS. I MEAN, IS IT A RECIPE FOR DISASTER? PAUL: WELL, IT SORT OF DEPENDS WHETHER YOU BELIEVE THAT THE BUILDUP IS GOING TO WORK, WHETHER THE DEMAND IS GOING TO BE THERE.

COREWEAVE IS QUITE INTERESTING. WE SAW FROM J.P. MORGAN AND FROM GOLDMAN SACHS AND FAVORABLE COMMENTARY OVER THE PAST FEW DAYS TALKING ABOUT THE BUSINESS MODEL. MOST OF THE FUNDING IS SORT OF SECURED LENDING THAT THEY ARE LOOKING AT, THAT THEY THEN HAVE LOCKED IN AT THE OTHER END IN TERMS OF THE RENTING OF THE DATA CENTER SPACE, SO IT IS JUST BASICALLY A SPREAD TRADE IN SOME WAYS, TAKING THE MONEY THAT IS GUARANTEED AND EARNING ON THE FLIPSIDE ONCE YOU'VE INVESTED IT , IT SHOULD BE RELATIVELY STRAIGHTFORWARD, IT IS AN EASY BUSINESS MODEL TO WORK.

BUT THE DATA CENTERS THEMSELVES ARE GETTING DELAYED IN GETTING PUSHED BACK EITHER ON THE ENERGY SIDE OR THE PLANNING SIDE, ON THE CONSTRUCTION SITE AS WELL. AND THERE'S ALSO JUST THIS CONCERN THAT THE BUILDOUT IS SO AGGRESSIVE THAT THEY ARE TALKING ABOUT BEING SO AMBITIOUS AND SO STRIDENT THAT THE VALUATIONS THAT THEY ARE SEEKING RAISE THOSE MISGIVINGS WITH INVESTORS AND LEAD TO A SORT OF ROCKY RECEPTION IF THEY GO TOO HARD IN THE IPO MARKET.

VONNIE: JUST TO MOVE TO A DIFFERENT ASSET CLASS FOR A MOMENT, THIS VERY STRONG JAPANESE BOND OPTION THAT WE SAW, IS THAT A GOOD OR BAD SIDE? IS THIS A FLIGHT TO SAFETY IN JAPANESE ASSETS OR IS THIS JUST A HEALTHY MARKET? PAUL: I THINK AS FAR AS JAPAN IS CONCERNED, IT'S A GOOD SIGN. IF THIS FINALLY MORE DEMAND COMING IN FOR JAPANESE GOVERNMENT BONDS, IT BIT OF A SPREAD WITH A RECORD FOR THE 20 YEAR SECTOR. QUITE IMPRESSIVE.

IT SHOWS YOU THAT NOW WE'VE GOTTEN IS MUCH HIGHER YIELDS IN JAPAN. AND WHAT I THINK IS REALLY SIGNIFICANT IS THAT WHEN YOU LOOK AT THE BREAKDOWN OF THE BIDS, A LARGE SECTION WAS CLASSIFIED AS UNKNOWN. UNKNOWNS IT IS MORE LIKELY EITHER FOREIGN DEMAND OR INSURANCE DEMAND THAT IS SUPPORTING THOSE SECURITIES, SO IT IS JAPANESE INVESTORS WHO HAVE BEEN EYEING CAREFULLY THE OPPORTUNITY TO BRING MORE MONEY HOME, FINALLY STARTING TO SNAP THINGS UP A LITTLE BIT MORE.

BUT I THINK THE BAD NEWS MIGHT BE IF YOU ARE LOOKING FOR THE FLIPSIDE OF THAT, WHERE IS THE MONEY COMING FROM, WHERE IS IT ESCAPING FROM? MAYBE EUROPE. THE FRENCH GOVERNMENT, WE HEARD ABOUT CUTTING BACK ON THEIR FUND HOLDINGS. WE KNOW THAT ASIA IS OUTPERFORMING EUROPE AS WELL AS THE MOMENT. MAYBE THAT IS WHERE ELUDED OF THAT FLOW IS TAKING PLACE, AND OPPORTUNITY TO REPATRIATE MONEY WITH A DECENT YIELD NOW AND TO AVOID SOME OF THOSE RISKS WER ARE SEEING IN THE EUROPEAN GOVERNMENT BOND SPACE.

VONNIE: PAUL, THANK YOU SO MUCH. STAYING ON TECH AFTER HAVING A DEAL FALL THROUGH WITH MICROSOFT, NSCALE IS BACK WITH A BLOCKBUSTER, AND TALKS TO SELL ITS COMPUTER POWER TO ANTHROPIC IN A DEAL THAT COULD BE WORTH $45 BILLION. MATT BLOXHAM JOINS US NOW. IF THIS DOES GO THROUGH, A DEFINITE WIN FOR AN SCALE BUT IT IS VERY DEPENDENT ON THAT ONE CUSTOMER, ISN'T IT? MATTHEW: IT IS ALL INCREDIBLY CONCENTRATED. THE WEEKEND NEWS WAS DISAPPOINTING WHEN THEY LOST MICROSOFT AND A PLANNED U.K.

FACILITY. ANTHROPIC WOULD GO SOME WAY TO BALANCE THAT OUT. PITCHING THE IPO OUTLOOK WOULD CERTAINLY BE A STRONG FORWARD PIPELINE FOR THEM TO KIND OF HELP INVESTORS FEEL MORE COMFORTABLE ABOUT THE FORWARD REVENUE OPPORTUNITY. LIKE A HUGE PART OF THE NSCALE STORY, THIS IS ABOUT BUILDING NEW FACILITIES AND THEY HAVE BEEN RUNNING INTO SOME OBSTACLES BOTH IN THE U.K. WITH A POWER SUPPLY ISSUE AND IN NORWAY WHERE THEY SEEM TO BE SOME ISSUES IN TERMS OF EXIT SHOULD.

THERE IS STILL A LOT RIDING ON THE ABILITY TO DELIVER THESE FACILITIES ON TIME AND TO BUDGET BECAUSE QUITE OFTEN, THE CONTRACTS GIVE THE POTENTIAL CUSTOMERS IF THE DEADLINES SLIP. VONNIE: OBVIOUSLY IT HAS NOT IPO'D YET. WHAT HAPPENS NOW WITH ALL OF THE DIFFICULTIES? WOU