Global Markets React to AI, China Economic Concerns

DBS CEO Tan Su Shan reports that the bank's adoption of artificial intelligence (AI) is already yielding significant benefits, with an expected revenue increase of over $768 million this year. DBS has been implementing AI for over a decade and has seen a 'snowballing effect' of benefits from machine learning, particularly in financial services to institutional clients. The bank plans to continue accelerating its AI development to become an AI-powered bank, with the ultimate goal of developing generative AI into a trusted financial advisor for clients. Despite concerns about the return on investment (ROI) of AI initiatives, DBS is committed to continued investments in AI, including reskilling employees to work effectively with AI tools.

China's economy is experiencing a significant slowdown due to a deepening property downturn and soft consumer demand. Fixed-asset investment contracted 1.7% in the first ten months of the year, with property investment declining 14.7%. Industrial output expanded 4.9% in October, slowing from 6.5% in the prior month. Retail sales climbed 2.9% but fell to its lowest level this year. Economists expect policy-directed investment in infrastructure and advanced manufacturing to continue, but stimulus is not expected until next year. China's economic growth slowed to 4.8% in the third quarter, and the country is under pressure to stimulate domestic demand.

The article discusses the current state of the US stock market, which experienced a significant downturn due to a sell-off in AI-related stocks and uncertainty surrounding the Federal Reserve's decision on interest rates. The Dow Jones Industrial Average, S&P 500, and Nasdaq Composite all fell, with the latter experiencing a 2.29% decline. The article also touches on China's economic slump, with fixed-asset investment shrinking 1.7% in the January-to-October period. Additionally, it highlights the potential impact of Air India's losses on Singapore Airlines' profitability and notes that some stocks with zero revenue are trading at elevated prices. The CEO of DBS Group Holdings Ltd. is quoted as saying that AI adoption is already paying off for the bank.

The article discusses the recent downturn in US stock markets, particularly in tech stocks, due to concerns over high valuations and capital expenditure. The lack of economic data due to a government shutdown is complicating the Federal Reserve's decision on a potential interest rate cut in December. Other news includes Elon Musk's xAI raising $15 billion in funding and China's Singles' Day sales growing 14.2% year-on-year. The article also highlights concerns over stocks with high market caps but no revenue and the waning sentiment towards Oracle's AI buildout plans.

European stocks are expected to open lower due to concerns about an artificial intelligence bubble and the global economy. China's economic slowdown continued in October, with fixed asset investment contracting and retail sales softening. Investors are also reacting to comments from Federal Reserve officials that have reduced the likelihood of a December rate cut. Meanwhile, corporate earnings continue to be in focus, with German insurer Allianz reporting record results. US stock futures were little changed on Friday morning following Thursday's sell-off.

SoftBank Group's shares plummeted nearly 9% on Friday, continuing a three-day selloff after the company revealed it had sold its entire stake in Nvidia for $5.83 billion. The sale, disclosed in SoftBank's latest earnings report, surprised some investors, although it's not the first time the company has exited Nvidia. SoftBank's Vision Fund had previously accumulated and then sold Nvidia shares in 2017 and 2019, respectively. Despite the sale, SoftBank maintains business ties to Nvidia through various AI ventures. The selloff is attributed to broader market sentiment on semiconductors and technology stocks, with other tech stocks in the region also declining. The article highlights the significant impact on SoftBank's market cap, which saw almost $50 billion wiped out last week, its worst weekly loss since March 2020.

The stock market experienced a significant downturn on Thursday, with major U.S. indexes posting their worst one-day performance in over a month. The Dow Jones Industrial Average lost about 800 points, or 1.7%, after crossing the 48,000 level on Wednesday. Technology giants such as Nvidia, Broadcom, and Alphabet saw notable declines. Concerns about the artificial intelligence trade and elevated tech valuations contributed to the market pressure. The Federal Reserve's upcoming interest rate decision also added to the unease. Despite this, some strategists view the pullback as a healthy correction. In after-hours trading, StubHub lost 18% after failing to provide quarterly guidance, while Applied Materials slipped 4% despite beating earnings expectations.

Top tech executives at the Web Summit conference in Lisbon expressed concerns about a potential bubble in the artificial intelligence sector due to soaring valuations, despite remaining bullish on AI's long-term potential. CEOs of DeepL and Picsart cited exaggerated valuations and 'vibe revenue' as signs of a bubble. However, they and other executives, such as Lyft's CEO, emphasized the growing demand for AI services from enterprises in 2026 and the transformative impact of the technology. A report from Accel projected $4 trillion in capital expenditure on AI data center capacity by 2030, although some investors questioned the necessity of such large spending.

China's economic growth slowed in October due to a decline in fixed-asset investment, largely attributed to the struggling property sector. Despite steady consumer spending, investment cooled, and the National Bureau of Statistics (NBS) reported a 1.7% fall in fixed-asset investment from January to October. An NBS official attributed the decline to cautious investor sentiment and the slowdown in the property market, but expressed confidence that Beijing would achieve its annual growth target. The external environment is complex, with challenges from the trade war and domestic competition, leading to reduced investment returns and a more cautious approach from market participants.