This downturn feels unusual.. All the previous concerns might be coming to a head
Energy prices surge ahead of the US midterm elections
This is evidence that the US government is unable to control inflation: the Consumer Price Index (CPI)
has surged sharply, exceeding market expectations.
As a result, the possibility of an additional interest rate hike by the US Federal Reserve (Fed) in October has resurfaced rapidly.
The possibility of US Treasury yields rising to the 6% range -> Inflation -> Interest rate hikes
If interest rates rise, the interest burden on debt taken out for Big Tech AI will increase, and we're screwed.
Rising interest rates ➔ Increased financing costs for Big Tech ➔ Concerns over slowing AI semiconductor demand ➔ Stock price decline
Recently, the International Monetary Fund (IMF) warned about the proportion of 'zombie companies' and debt risks in Asian countries.
Asian government bond yields (and global bond yields) are rising.
Concerns over an AI bubble are spreading: "Inflation > Interest rate hikes > Big Tech interest rate bomb"
Uncertain ROI (Return on Investment) compared to astronomical Capex (Capital Expenditure)
Is it actually making money?: Excluding Big Tech affiliates (such as cloud revenue growth, etc.), the AI adoption performance of general companies is minimal.
High interest rates (5% range Treasury yields) and the AI debt seizure
If US Treasury yields rise to the 6% range and the Fed implements additional rate hikes,
the concern that the interest burden on Big Tech companies that borrowed massive amounts to invest in AI will explode, causing a major blow to the market,
is currently one of the hottest topics in the financial markets.
Recently, experts including Wall Street mogul Jamie Dimon have warned about the 6% Treasury yield scenario.
If all of this breaks, it looks like the end of the stock market season. Shaking...
Anyway, it seems like AI is in a checkmate position. It can't stop now, and even knowing all the bubbles and concerns,
it's like a runaway train that cannot slow down.
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