亚洲科技股遭抛售，美债与日元成避险首选

Technology under pressure. Across Asia, investors are questioning the price of the AI boom, the returns on the massive spending and how much longer investors can withstand the stretched valuations. Live from Sydney I'm Paul Allen. This is insight where we dive deeper into the stories that matter with crucial context and shop analysis. Well, investors question the price of the AI boom. Is the technology truly transformative enough to justify the huge spending?

Martin Sorrell, chairman of S4 capital, joins us on how the technology is reshaping businesses on the ground. The rush for safety sends investors into bonds, treasuries holding most of their biggest rally in more than two years after the ten year yield tumbles and the yen rallies to its strongest in more than a month. The Japanese currency is shining again after struggling to benefit from its traditional haven status in recent years.

Meanwhile, India's software stocks are turning from eye casualties to beneficiaries. The nifty IT index has surged in October as investors bet on I implementation rather than just the infrastructure place. Investors rushing for safety as the tech selloff deepens, sending stocks of lower bonds higher and the Japanese yen surging. Let's assess the damage with Averil Hong joins us from Singapore. Anthony Stevens is in Hong Kong.

So let's start with you on the safe side of things. Where are investors heading for cover? Yeah, Paul, I have to say this is quite in line with Anthony and myself, our personalities. But there's a lot for investors to worry about, right? The I rule the situation and then the French market turmoil. So investors are flocking to the havens. You saw how treasuries rallied overnight. Unpack that a bit. But look at how we're seeing GBS along with Aussie debt rallying as well across the curve on GBS.

On the ten year, we're seeing a move of about 11 basis points lower on the yield. And the yen has been rallying as well. Petering off a bit for the moment, but its extension from yesterday's move more or less, and it is one of the top performers earlier in the session. Among the G10, there are some wobbles also among the carry trades for the yen, which I'll unpack also in just a bit. Interesting to see the way gold is performing today amid the precious metals selloff.

But treasuries were really the big mover overnight. We saw almost 20 basis point move on the yield on the short end of the board. When it comes to the ten year, we saw the yield moving below five and it was the biggest move in a single day. So the board if we can that we've seen it in more than two years. Now some of this is positioning. You got that short covering. And we saw in terms of that wave of buying and Treasury futures, but we also saw traders pulling back the bit of fed rate hike.

So it speaks to maybe this is not just a flock to safety. This is worries about cracks to growth. How sustainable is I investment which of course has been a major driver of U.S. growth and is remarkable that the rally in treasuries has been coming along with the spike in oil prices, is almost like a reminder that in times of trouble, investors ultimately flock to U.S. government debt. Now, said the board again. And take a look at what we're seeing in the yen carry trades.

Given the rally, we've been seeing it hitting the Mexican peso, for example, very hard. And given how we're seeing really low volatility on the Japanese cars still. And as our Bloomberg Economics colleagues have been highlighting that hawkish shift from the BOJ since September, we could see even further pressure on these yen carry trades Paul All right. Thanks very much, April. Uh, Anthony Avril, uh, was, uh, over in the safety zone there, but, uh, you're looking at the danger zone.

What's going on with equities today? You know, we've seen, uh, confidence really shaken across the board. Well, and let's get granular about it. We've seen the hyperscalers under pressure. SoftBank down six. We've seen the kind of passive component makers that were supposedly in a structural bull market getting challenged down six and a half to seven for Murata and TDK. And lastly, this score which actually came out at pretty decent numbers, very strong guidance.

But they did highlight some of these growing, uh, capacity constraints. And that stock is getting hit down 6.5% almost. Now flip the board. And we can kind of see the start of contagion potentially in the broader economy. Just because banks are so leveraged now to the eye trade, whether it's deal flow, whether it's lending, whether it's overseas expansion, banks in Asia are very exposed to the eye trade and especially so in Japan and Korea.

And you're seeing that play out here as the trade gets repriced and you have SMG up down around 5%. That's a big move. Normally in Japan when tech drops banks rates today everything is going down together. And we're seeing a very similar dynamic in Korea with Hana and Woori also seeing sharp losses. Actually, their losses are sharper than that of the big tech companies. Hynix and Samsung. Now flip the board and we can see what is winning.

And what is winning is kind of depressing, frankly, right. We're seeing tobacco do really well. Uh, Uniqlo in Fast Retailing we are seeing beer stocks do okay. Uh, and also fast food across the across the region is doing well. You know, that makes for a cheap budget holiday in Tokyo. But it's not really what people want to be playing this late in the I cycle. All right. Thanks, Anthony. Cigarettes and alcohol rallying.

Uh, that's a trade for the times, isn't it? Uh, Wall Street's eye bubble debate Against that backdrop is a raging on black stone. President John Gray is downplaying the risks. He's calling it demand for the technology almost parabolic. He also believes this time is different from the likes of the 1990s telecom bubble. When you think about a bubble, you think about building capacity and then hoping the demand comes with IE, you're building capacity and you're hoping you can keep up with the demand.

Today, there's really an indisputable shortage of compute, and it's hard to deliver that compute. And that's what's preventing some of the excesses we've seen in past what they call bubbles. Billionaire Ken Griffin earlier this week, though, warned that eye bubbles almost certainly exist right now as corporations grapple with AI spending and its economic impact. These bubbles, if we're going to use that word, often coincide with these giant technological transformations, or the railroads, for example.

But what's left in the wake of these problems, if we want to use that word, is often game changing for the world. And the companies that are on the other side of that bubble are the market leaders for decades to come. Well, joining us now with insights is Martin Sorrell, chairman of S4 capital. And Martin, we just heard a couple of opinions there from two gentlemen with tremendous reputations, both taking opposite views.

Do you have a sense that we're entering a bit of a crossroads here? What's your opinion on whether or not parts of the market are in an eye bubble? Well, I probably steer between Gray and Griffin, if I can put it that way between the two guys. Um, I would be what we're seeing. And I'm talking about marketing transformation. So I as it affects the advertising and marketing services, which is not a huge industry. You know, a Blackstone uh, would, would be or Blackrock will be managing $14 trillion in our industry this year, excluding mainland China would be about 1.35 trillion.

So it's a relatively small industry relative to the investment industry through in mainland China, you'd be up about 1.55 trillion. But if you look at that, industry is being transformed, uh, mainly by consumers. Actually, what we're seeing and why I would steer of course, down the middle is where we've seen I adoption in marketing is by consumers. So for example, muse which was launched the the agent uh, launched by