GoAI Market Morning Wrap - 19th Nov

Stock Market  

Eastern Time Tuesday, investor concerns over excessive tech stock valuations continued to ferment, with all three major indices closing lower and both the Nasdaq and Dow falling more than 1%.  

 

(Intraday charts of the three major indices, source: TradingView)  

 

At the close, the Dow Jones Index fell 1.07% to 46,091.74 points; the S&P 500 Index fell 0.83% to 6,617.32 points; the Nasdaq Index fell 1.21% to 22,432.85 points.  

 

Lofty valuations and mounting debt accumulated to build data centers have led investors to start questioning the pricing of artificial intelligence (AI)-related stocks.

 

A latest survey shows that 45% of fund managers believe the “AI bubble” is currently the biggest “tail risk” for the market, and concerns over corporate overspending (especially on AI projects) have surged.

 

AI chip leader Nvidia dropped nearly 3%; the stock is already down more than 10% this month as the market awaits its fiscal third-quarter results to be released after the close on Wednesday.  

 

Magnificent Seven members Amazon and Microsoft also weakened, with Amazon down more than 4% and Microsoft down nearly 3%. Both companies had their ratings downgraded by Redburn analysts.  

 

“The S&P 500 could see an 8% to 9% pullback,” said Sam Stovall, chief investment strategist at CFRA. “If Nvidia reports results that merely meet analyst expectations, combined with weak but not recession-signaling employment data, the correction could even end earlier.”  

 

Stovall added: “If the industry leader posts better-than-expected earnings, revenue and margins while giving very bullish forward guidance, that would go a long way toward calming investors. The real question is, ‘When do we start to see payback on all this capex?’ It won’t be this quarter or next, but it’s not expected to be too far off either.”  

 

Bitcoin rebounded after briefly falling below $90,000 on Tuesday. Since many tech investors also hold large crypto positions, this pullback has raised worries that equities could face further downside.

Global Hotspots  

U.S. Senate Passes Bill Mandating Release of Epstein Files  

 

On the 18th local time, the U.S. Senate approved legislation forcing the release of Epstein case files. Earlier the same day, the House voted to require the Department of Justice to disclose all Epstein documents. President Trump has previously expressed support for releasing the files.  

 

Since the House reconvened on the 12th, Democrats and Republicans have taken turns releasing portions of the Epstein files, accusing senior figures from the opposing camp of ties to Epstein and even involvement in his sex crimes, including Trump, former Democratic President Clinton, former Treasury Secretary Larry Summers, and former White House counsel Kathryn Ruemmler from the Democratic administration.

 

Trump: Saudi Arabia to Receive F-35 Jets – Deal Already Reached  

 

President Trump said a defense agreement has been reached with Saudi Arabia under which it will receive F-35 fighters similar to Israel. On the same day, Saudi Crown Prince Mohammed bin Salman met Trump at the White House.  

 

On the 17th, Trump stated he plans to approve the sale of U.S.-made F-35s to Saudi Arabia. If completed, Saudi Arabia would become the first Middle East country after Israel to acquire the aircraft.  

 

Subsequently, the Israeli military submitted a position paper to government leadership strongly opposing any potential U.S. sale of F-35s to Saudi Arabia, warning it could erode Israel’s air superiority in the region.

 

Mexico Reiterates It Will Never Allow U.S. Military Intervention  

 

Regarding recent remarks by President Trump, Mexican President Sheinbaum stated on November 18 local time that any U.S. military intervention against Mexican drug cartels “will absolutely not happen.”  

 

Sheinbaum stressed that the Mexican government has repeatedly made clear its opposition to U.S. troops on Mexican soil and will never tolerate any U.S. military intervention in Mexico.

 

U.S. Labor Department: Weekly Jobless Claims Data to Be Released Thursday  

 

A Labor Department spokesperson said that with the federal government shutdown ended, weekly unemployment claims will resume normal release on Thursday. Reports originally scheduled between October 2 and November 13 will not be issued.

 

The spokesperson noted that due to a technical glitch the department website had prematurely released data for the week ending October 18. Full data will be published before the end of business Thursday. Earlier, initial claims for the week ending October 18 totaled 232,000.

Company News  

Google Launches Latest Gemini 3 AI Model, Emphasizing Immediate Monetization  

 

Alphabet’s Google released its newest Gemini 3 artificial intelligence model, stressing that the new features will be immediately deployed in multiple revenue-generating products such as its search engine.

 

Meta Wins FTC Antitrust Case – No Need to Divest Instagram or WhatsApp  

 

On Tuesday (November 18) local time, a U.S. federal district court judge ruled in favor of Meta in its antitrust lawsuit against the Federal Trade Commission.  

 

The case, originally filed by the FTC five years ago, centered on Meta’s acquisitions of Instagram and WhatsApp. The victory means Meta will not be required to spin off either business.

 

Microsoft, Nvidia and Anthropic Announce Partnership  

 

On Tuesday (November 18) local time, Microsoft, Nvidia and Anthropic announced a cooperation agreement.  

 

Specifically, Anthropic will spend $30 billion on compute resources to scale its Claude AI model on Microsoft Azure, with the compute “powered by Nvidia.”  

 

Anthropic committed to signing up to 1 GW of additional capacity consisting of Nvidia Grace Blackwell and Vera Rubin systems.  

 

As part of the deal, Nvidia pledged up to $10 billion in Anthropic, while Microsoft committed up to $5 billion.  

 

Sources say the investments value Anthropic at roughly $350 billion, a sharp rise from $183 billion in September. Terms of the next funding round are still being finalized.

 

Microsoft and Amazon Ratings Downgraded – Redburn Analyst Questions Generative AI Outlook  

 

Analysts downgraded two of Wall Street’s favorite tech names, Microsoft and Amazon, arguing the generative AI outlook is no longer clear-cut and urging caution on hyperscale data-center operators.  

 

This is the first time Alexander Haissl at Rothschild & Co Redburn has cut both stocks from “buy” to “neutral” since he began covering them in June 2022.  

 

Haissl wrote that the industry line of “trust us, generative AI is like cloud 1.0” looks increasingly misplaced, with the underlying economics “far weaker than anticipated.”  

 

He noted: “Generative AI profitability assumptions now stretch depreciation cycles to 5-6 years versus just 3 years in early cloud days. On a comparable basis this means significantly higher capital intensity and clearly weaker pricing power.”  

 

Redburn lowered its Microsoft target from $560 to $500 while keeping Amazon’s at $250.

 

Geely and Renault to Invest $714 Million in Brazil for Joint New Models  

 

Renault and Geely will invest 3.8 billion reais ($714 million) in Brazil to jointly develop new vehicles, aiming to strengthen their position in South America’s largest auto market.  

 

According to a joint statement Tuesday, part of the money will fund Geely’s new zero- and low-emission platforms for two models starting production in H2 2026. The rest will update an existing Renault model next year and launch another new one in 2027.

 

Toyota Plans $912 Million U.S. Investment Across Five States to Boost Hybrid Production  

 

Toyota announced a $912 million investment to increase hybrid component and vehicle production across five U.S. states, part of its $10 billion five-year U.S. commitment.

Forex & Commodities  

Global oil prices rose on the 18th.

 

At settlement, NYMEX December light crude futures for December delivery rose 83 cents to $60.74 per barrel, up 1.39%; London Brent crude futures for January delivery rose 69 cents to $64.89 per barrel, up 1.07%.  

 

COMEX gold futures fell 0.17% to $4,067.4 per ounce; COMEX silver futures fell 0.34% to $50.54 per ounce.  

 

The dollar index against six major currencies fell 0.04%, closing at 99.551 in late New York trading.

Key Events  

Russia Resumes Exports, Oil Prices Fall, Oversupply Looming  

 

Global oil prices weakened on November 18 after Russia’s main export port resumed loading following a brief suspension, easing fears of supply disruption while expectations of “historic surplus” continued to cap the market.  

 

Russia’s Novorossiysk port had been offline for two days after Ukrainian drone and missile strikes but restarted loading on Sunday.

Cryptocurrency  

Bitcoin 24h +0.03% to 92,299.41.  

 

Ethereum (ETH-USD) +2.43% to $3,092.71.  

 

XRP (XRP-USD) +2.24%, BNB (BNB-USD) +2.00%, Solana (SOL-USD) +7.25%.  

 

Dogecoin (DOGE-USD) +5.89%, Cardano (ADA-USD) +1.73%.

Key Events  

Unfazed by Crypto “Violent Swings”! Strategy Continues Bitcoin Accumulation  

 

According to a new report from veteran U.S. investment bank TD Cowen, despite recent crypto market turbulence, “Bitcoin whale” Strategy’s accumulation strategy remains unchanged.  

 

Strategy disclosed Monday that in the seven days ending Sunday (Nov 16) it bought $835.6 million worth of Bitcoin – the largest weekly purchase since July last year. This brings its total holdings to 649,870 BTC worth approximately $61.7 billion.  

 

TD Cowen says Strategy is adding Bitcoin even faster thanks to fresh demand from its recent large euro-denominated preferred and floating-rate preferred share issuances.