Il Regno Unito è in grossi guai | Dubbi del mercato sull’intelligenza artificiale | Fiducia del G…

Il Regno Unito è in grossi guai | Dubbi del mercato sull’intelligenza artificiale | Fiducia del G…

Happy Monday everybody. Welcome to a new episode and a new week of market updates where we discuss leading financial and economic developments in Europe, Asia, and North America. My name is Tony. Let’s jump in. And first up, Britain’s economy is flirting with contraction again, underscoring the scale of the challenge facing Chancellor of the Excheer Rachel Reeves as she seeks to revive growth while shoring up the public finances. Official data showed gross domestic product unexpectedly shrank 0.1% in October, defying expectations for modest expansion and marking a second consecutive monthly decline. On a threemonth basis, output also fell 0.1% in the August to October period, the first such drop since late 2023. Both analysts and the Office of National Statistics pointed to uncertainty ahead of Reeb’s November budget as a key drag on activity. The UK’s dominant services sector contracted 0.3% in October while construction fell 0.6% only partly offset by a rebound in industrial production following September’s cyber attack related shutdown at Jaguar Land Rover. GDP is now growing in just one of the past seven months, leaving the economy at risk of its first quarterly contraction since Labor returned to power. Pre-budget nerbs appeared to have weighed heavily on households and businesses alike. Consumer card spending fell in November at its fastest pace since 2021. While retail sales disappointed as shoppers pulled back amid speculation that their taxes would go up. Although Reeves avoided increasing headline income tax rates, opting instead to extend the phrase on thresholds. Rising unemployment and fading real wage momentum are likely to keep consumers cautious. The weak data have strengthened expectations that the Bank of England will cut interest rates at its December meeting. Markets increased bets on further easing after the GDP release, although policy makers remain divided with the deputy governor warning of upside risks to inflation. Economists say incoming jobs and inflation data will be crucial ahead of what is shaping to be a finely balanced decision. All the debate over Britain’s growth malaise continues. Some commentators argue the country’s struggles reflect a long-running decline exacerbated by the global financial crisis and Brexit, while others contend the economy is performing better than gloomy headlines suggest. For now, Reeves has defended her 26 billion pound tax raising package while signaling a willingness to act again if needed. Yet, with momentum fading and confidence fraught, the search for durable growth through measures such as boosting small budget lending is becoming ever more urgent. Next up, we cross the Atlantic to North America. Wall Street’s view of the artificial intelligence boom is undergoing a notable recalibration with investor sentiment pivoting away from open AI and increasingly toward Alphabet Inc., The shift reflects growing doubts about whether the creator of chat GPT can sustain its central role in the AI race. While Google’s parent is emerging as a formidable, well capitalized rival with advantages across the entire AI value chain. Earlier this year, Open AI was widely seen as the undisputed leader in generative AI and any company linked to it enjoyed powerful stock market tailwinds. That narrative has now weakened. Investors are questioning OpenAI’s profitability, the pace at which it must grow to fund massive computing commitments, and whether it still holds a clear technological edge. Mixed reactions to the launch of Chat GPT5, and scrutiny of the company’s complex financing arrangements have further eroded confidence. As a result, shares of companies closely tied to Open AI, including Oracle, Corewave, AMD, and to a lesser extent, Microsoft, Nvidia, and SoftBank, have come under pressure. While stocks connected to Open AI are still up sharply this year, their gains lag far behind those associated with Alphabet, whose AI linked ecosystem has surged. Alphabet’s momentum has been fueled by strong reviews of its Gemini model and a broader reassessment of the strategic depth. Investors increasingly see the company as having all the pieces to dominate AI, vast cash reserves, a leading cloud business, in-house chip design through its tensor processing units, and unmatched distribution via products such as search, YouTube, and Android. Its AI ambitions are also reinforced by adjacent businesses like Whimo and a growing semiconductor manufacturing capability. The shift in perception has benefited Alphabet’s partners. Companies supplying optical components, hardware, and chips for Google’s AI infrastructure, including Lumenum, Celestica, and Broadcom, have posted outsized gains this year, reflecting confidence that Alphabet’s buildout is both scalable and financially sustainable. The divergence matters because leadership in AI carries major financial consequences. If users gravitate towards Gemini at the expense of chat GPT, Open AI’s already daunting task of funding its long-term compute needs becomes harder with knock-on effects for suppliers and investors. While Open AI remains a powerful innovator, markets are now adopting a more cautious wait and see stance. In contrast, Alphabet is increasingly viewed not just as a challenger, but as a potential long-term winner in an AI race where depth, integration, and balance sheet strength are proving just as important as being first. But of course, in such a dynamic and fast developing environment, anything could happen in a short period of time. As the old adage goes, only the paranoid will survive. Now, next up, we have one more development to cover as we move to Asia. But just quickly, if you’d like to continue to be on top of updates like today’s as we move into the new year, consider subscribing to Market Update. Hit the bell notification icon and you will be. And if you’re getting some value from today’s episode, don’t forget to hit the like button. Next up, confidence among Japan’s largest manufacturers rose to its highest level in four years, reinforcing expectations that the Bank of Japan, the country’s central bank, will raise interest rates at its policy meeting this week. The headline sentiment index for large manufacturers climbed to 15 in December from 14 in September, matching economists forecasts according to the Bank of Japan’s closely watched Tankan survey released Monday. Today, sentiment among large non-manufacturing remained robust, holding at 34, near the strongest readings since the early 1990s. A positive figure indicates that more firms see business conditions as favorable than unfavorable, highlighting the resilience of Japan’s corporate sector even as global uncertainties persist. The Tankan result suggests that Japanese companies have so far avoided significant fallout from US tariffs, an issue the Bank of Japan has repeatedly flagged as a risk. Improved profit expectations and steady longerterm inflation forecasts further strengthened the case for policy makers to proceed with tightening. Many analysts now view a rate hike on Friday as all but certain, which would mark the Bank of Japan’s first increase since January. Companies also signaled confidence through their investment plans. Large firms across industries expect capital expenditure to rise 12.6% 6% this fiscal year, slightly higher than projected in the previous survey. While net profit is still forecast to edge down 0.2%, that represents a notable improvement from the roughly 5% decline anticipated earlier. Such earnings trends are closely monitored by the Bank of Japan and its officials as an indicator of whether wage growth can gain sufficient momentum to make inflation durable. The weak yen continues to provide support for uh exporters, though it raises costs for service sector firms. Companies now expect the currency to average 147 yen per dollar this fiscal year, weaker than previously projected. Inflation expectations appear anchored with firms forecasting average price growth of 2.4% over the next 5 years, the highest since records began in 2014. With inflation running at or above the Bank of Japan’s 2% target since early 2022, labor markets remain tight, policy makers appear increasingly confident that conditions are in place for further normalization. Markets reflect that view with traders assigning about a 95% probability of a quarter point rate hike this week, signaling that Japan’s long era of ultra loose monetary policy is steadily drawing to a close. Okay, that is today’s episode of Market Update. Thank you so much everybody for watching. Have a good Monday. Have a productive week and I hope to see you for the next episode tomorrow.

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00:00 Introduction
00:12 UK Economy Slips Back Toward Contraction
02:48 Wall Street Reprices the AI Boom as Alphabet Rises and OpenAI’s Halo Fades
06:03 Japan Confidence Hits Four-Year High, Bolstering Case for BOJ Rate Hike

Channel Email: marketupdatechanneltony@gmail.com

Disclaimer: Market Update is NOT a financial advisory channel. Nothing I say should be taken as investment or any other kind of advice. Please speak to a professional before making any investment decisions. While I take great care in researching everything discussed in my videos, I do not guarantee that all claims are 100% accurate, all claims should be verified by viewers.