Investors make record retreat from shares as AI crash fears rise

Group 1: Economic and Market Trends - The UK equity funds experienced significant outflows, with £3.6 billion withdrawn over the last three months, indicating investor concerns about a potential market correction driven by high valuations [7][67]. - The excitement surrounding AI technologies has led to record highs in stock markets, particularly in the US, with notable gains from companies like AMD following a partnership deal with OpenAI [6][68]. - Despite the turmoil in France's government, Europe saw modest net buying, contrasting with the negative sentiment surrounding the UK economy, which is facing fiscal challenges and rising credit spreads [3][65]. Group 2: Company Performance - Mercedes-Benz reported a 12% decline in vehicle deliveries year-over-year for Q3, with significant drops in sales in the US and China, attributed to US tariffs and increased competition from domestic brands [26][27]. - The stock market reaction to the resignation of France's prime minister has led to increased volatility, impacting the Cac 40 index, which is currently underperforming compared to other European markets [12][66]. - UK-focused equity funds saw £692 million pulled out, reflecting investor hesitance amid concerns over the economic outlook and high stock valuations [63][64]. Group 3: Trade and Tariff Implications - The US-Canada trade relationship is under scrutiny as President Trump expressed willingness to renegotiate the USMCA, which is crucial for Canada's economy [8][16]. - Trump's tariffs on Canadian goods, including a new 25% tariff on heavy trucks, are expected to further strain trade relations and impact Canada's economic performance [17][29]. - The World Trade Organization has warned that Trump's trade policies could significantly reduce global trade growth, revising its forecast for goods trade growth down to 0.5% for 2026 [29][30].