Market Report.

⚙️ The two key factors could change everything this week: The upcoming quarterly report from Nvidia, a key player in the AI infrastructure buildout, is seen as a potentially pivotal moment for the AI trade. The release of delayed government data, including the September jobs report, will be closely watched for its implications on the Fed’s policy decisions.

🤝 Microsoft and Nvidia announced a combined $15 billion investment in Anthropic, with the OpenAI rival agreeing to purchase compute power from its new backers — a pattern increasingly common in the AI industry, where tech giants fund startups that then become major customers.

🔁 American Tech is a closed-circuit business. Follow the next money chain in a closed circle, where the inversion passes from one hand to another within the circle.

💰 Microsoft will invest up to $5 billion into Anthropic, while Nvidia will invest up to $10 billion, pushing Anthropic’s valuation to around $350 billion.

🖥️ Anthropic has committed to purchasing $30 billion of Azure compute capacity from Microsoft and has contracted for additional compute capacity up to 1 gigawatt.

⚡ Anthropic has also committed to purchase up to 1 gigawatt of compute capacity with Nvidia’s Grace Blackwell and Vera Rubin systems, and the companies will collaborate on engineering and design to optimize Anthropic’s models.

🤖 Microsoft has invested billions into Anthropic’s rival OpenAI, holding a stake in the startup’s for-profit business valued at $135 billion.

🧠 Anthropic was founded by former OpenAI research executives and is best known for developing a family of large language models called Claude.

☁️ Amazon Web Services has been named Anthropic’s primary cloud provider and training partner, but the company will continue to work with Microsoft and Nvidia as well.

📉 Meanwhile, the S&P 500 has fallen for a fourth consecutive session, its longest losing streak since August, as major firms such as Nvidia, Amazon, and Microsoft dragged markets lower.

🚀 Nvidia is expected to report strong growth in revenue and net income, driven by surging AI spending from tech giants like Microsoft, Amazon, Alphabet, and Meta. However, there are concerns that the high expectations around AI spending may become unreliable if the major players have to pull back on their commitments.

📈 A strong earnings report from Nvidia could provide a respite for investors who are growing concerned about the valuation of AI stocks and the vast sums being spent on AI infrastructure. The key will be the Nvidia’s Blackwell series, margin expansion, and forward guidance, as these will signal the sustainability of the company’s growth trajectory.

Geopolitics.

🇯🇵 On the geopolitical front, a diplomatic spat between Tokyo and Beijing threatens to deepen Japan’s economic troubles, with economists warning that sustained tensions could cost Japan 1.79 trillion yen over a year — roughly a 0.29% drop in GDP.

✈️ Japan is facing significant economic repercussions from a travel boycott by China, triggered by a diplomatic dispute over Taiwan. Within days of China urging its citizens not to travel to Japan, a Tokyo-based tour operator lost 80% of its bookings for the rest of the year, and tourism-related stocks have declined sharply.

💴 The boycott, stemming from remarks by Japanese Prime Minister Sanae Takaichi, could cost Japan approximately 2.2 trillion yen ($14.23 billion) annually, equivalent to a 0.36% reduction in GDP. Over 500,000 Japan-bound flight tickets have been cancelled, with more than 10 Chinese airlines offering refunds until December 31.

🧳 Chinese tourists accounted for around 20-25% of all inbound visitors to Japan in September, making them a crucial segment for the tourism sector, which contributes about 7% to Japan’s GDP.

🕵️‍♂️ The Russian gate returns? New speculation against Trump on the horizon. Apparently, Trump could not resist the appeal of investing in North Korea, please note the sarcarm. Two U.S. Senators, Elizabeth Warren and Jack Reed, are pressing the Department of Justice and Treasury Department to investigate a crypto company closely tied to the Trump family, World Liberty Financial (WLF), over alleged links to illicit actors in North Korea and Russia.

💣 The senators cited a report from a nonprofit watchdog group alleging that WLF sold its $WLFI tokens to entities with ties to a North Korean hacking organization, a sanctioned Russian “ruble-backed sanctions evasion tool,” an Iranian crypto exchange, and a known money-laundering platform.

📜 Congress voted overwhelmingly to compel the Justice Department to release its files on sex trafficker Jeffrey Epstein. The legislation passed the House 427-1 and was unanimously approved in the Senate, marking a political setback for Trump. Trump had previously opposed the release of the files but relented and directed Republicans to vote for the measure.

📊 Only 4 in 10 Republicans approved of Trump’s handling of the Epstein files, and independents disapproved by a nearly 6-to-1 margin. Trump’s handling of the investigation has exacerbated tensions within the Republican party and fractured his relationship with conservative media.

Market View.

😨 US markets continue to retreat, and a sense of fear is palpable.

📉 Mini S&P 500 futures have fallen back to the nearest support levels, formed in September, around 6,645 points. Nasdaq 100 futures have done the same, pulling back from the 24,550 area, where similar September support levels are found — leaving prices in a tense standby.

💵 The DXY dollar index is once again trading above 99.50, which has pushed EUR/USD lower, dropping below 1.16.

🇪🇺 In Europe, DAX 40 futures have fallen to 23,200 points, levels not seen since May. EuroStoxx 50 futures are also testing support formed since September, around 5,525 points.

🛢️ The crude oil market remains volatile, zigzagging around $65 per barrel for Brent crude.

🥇 Gold futures, which fell between Monday and Tuesday towards $4,000 per ounce, have since rebounded to around $4,095 per ounce.

💻 Bitcoin has yet to recover, continuing its decline. During yesterday’s session, it attempted to regain the $94,000 level but failed, dropping below $90,000 before rebounding to $91,918 at present.