By Mike Dolan
Oct 27 (Reuters) – Tech stocks staged a decent rally on Monday, seemingly taking AI darling Anthropic’s IPO filing and Meta’s additional equity raising plans as a vote of confidence in the AI boom, rather than what it clearly is – a deluge of new supply.
Either way, the jump in prices across the AI and chip sectors has steadied the ship ahead of the big hyperscaler earnings releases later this week, lifting tech names in Asia overnight too. Only China’s recently ailing tech sector was an exception.
Beyond the fact of filing itself, there was little new in the blizzard of numbers in the prospectus for Anthropic – a loss-making company with explosive but slowing revenue growth, a quarter of which comes from just five customers.
Its spending plans ahead top half a trillion dollars at least. The filing doesn’t have a listing date, so a big question remains about whether the numbers entice enough interest at a valuation now targeted around $1.5 trillion and whether it allows the sale to get away before year-end.
And it promises to be a noisy year-end from the stream of political and economic events stacking up.
Oil prices flirted with six-month highs again on Monday and rose again on Tuesday, despite further mediation efforts in the Iran war, this time led by the “Mecca” alliance of Turkey, Saudi Arabia and Pakistan.
Israel goes to the polls on Tuesday, with Israel’s longest-serving leader, Benjamin Netanyahu, trying to cling to power. What happens in the Iran conflict after that, and after next Tuesday’s US midterm elections, is now key.
Brazil’s markets on Monday plunged back to pre-first-round poll levels after President Lula’s reelection on Sunday kiboshed bets on a win for Flávio Bolsonaro. But they were off their worst levels of the day.
And ahead of this week’s Federal Reserve meeting, the US Treasury on Tuesday will sell 5-year notes – a tenor that experienced some difficulty at auction last time.
CHART OF THE DAY
The Fed’s policy meeting this week is expected to pause what markets assume will be a series of interest rate rises that started last month.
Yet inflation has remained above target for more than five years and is moving higher, while the labor market still appears robust despite numerous potential shocks from energy prices, geopolitics and the rapid development of artificial intelligence.
The US unemployment rate has now been below 5% for 64 consecutive months – the longest such stretch since the 1965-1970 period.
TODAY’S EVENTS TO WATCH
• US September durable goods (8:30 a.m. EDT), October consumer confidence (10 a.m. EDT), September new home sales (10 a.m. EDT)
• US 5-year note auction (1 p.m. EDT)
• Fed begins its October policy meeting
• Israeli elections
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