September 25, 2025 10:58 AM GMT Source: Morgan Stanley Research, Factset MS Capex Tracker aggregates forecasts across hundreds of companies, separating the data into 14 key verticals. The MS Capex Tracker has further accelerated through Q3 w/ NTM capex now tracking +20%, a step function higher from the already healthy +10% base growth entering 2025 (Exhibit 1). However, as we peel back the onion it becomes clear that positive rate of change is almost entirely driven by US Hyperscalers (Exhibit 2) – in line ...

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Market Overview - Asian stock markets are mostly lower, influenced by negative cues from Wall Street and new tariffs announced by U.S. President Donald Trump on various goods starting October 1 [1] - The Australian stock market is slightly higher, with the S&P/ASX 200 index above 8,750, supported by gains in iron miners and financial stocks [2][3] Australian Stocks - The S&P/ASX 200 Index is up 7.30 points or 0.08 percent to 8,780.30, after fluctuating between 8,746.30 and 8,781.10 [3] - Major miners like BHP Group are gaining almost 2 percent, while Mineral Resources and Rio Tinto are up more than 1 percent each [3] - Oil stocks show mixed performance, with Origin Energy down almost 2 percent and Woodside Energy down 0.4 percent, while Santos and Beach Energy are slightly up [4] Technology and Financial Sector - In the tech sector, Afterpay-owner Block is down 3.5 percent, and other tech stocks like Zip and Appen are also declining [4] - Among the big four banks, Commonwealth Bank, Westpac, and ANZ are up 0.1 to 0.5 percent, while National Australia Bank is gaining almost 1 percent [5] Japanese Market - The Japanese market is modestly lower, with the Nikkei 225 Index down 125.14 points or 0.27 percent to 45,629.79 [7] - Major companies like SoftBank Group are losing almost 3 percent, while automakers Toyota and Honda are slightly up [8] Economic Indicators - Overall inflation in the Tokyo region of Japan increased by 2.5 percent year-on-year in September, slightly below expectations [13] - Core CPI also rose by 2.5 percent year-on-year, missing forecasts for a 2.6 percent increase [14] Other Markets - South Korea and Taiwan are down 2.2 and 1.9 percent, respectively, while Singapore is up 1.1 percent [15] - On Wall Street, major averages ended lower, with the Nasdaq down 113.16 points or 0.5 percent [16] Notable Company News - Vulcan Energy Resources shares jumped more than 15 percent after signing a $179 million contract for a geothermal power plant in Germany [6]

Core Insights - Southern Company is a major energy provider in the U.S., operating through various subsidiaries, including Southern Telecom, and competes with Duke Energy and NextEra Energy in the utility sector [1] Financial Summary - On September 25, 2025, Morgan Stanley's David Arcaro set a price target of $92 for Southern Company, indicating a slight overvaluation as the stock was trading at $93.80, reflecting a -1.91% difference [2] - The current stock price is $93.77, showing a decrease of approximately 0.68% from the previous day [2] - The stock has declined by $0.65 today, with a trading range between $93.63 and $95.06 [4] - Over the past year, the stock has fluctuated between a high of $96.44 and a low of $80.46 [4] - The company's market capitalization is approximately $103.15 billion, with a trading volume of 2,891,135 shares today [4][5] Strategic Developments - Southern Telecom, a subsidiary of Southern Company, has partnered with Seimitsu to launch SouthernWaves, a new fiber-optic network service aimed at enhancing digital infrastructure in the Southeastern U.S. [3][5] - This partnership combines Southern Company's dark fiber offerings with Seimitsu's lit services, supporting initiatives like the South Downtown Atlanta project [3]

Group 1 - The energy system is essential for modern society, fulfilling the everyday needs of individuals and businesses globally while adapting to evolving political, technological, and environmental priorities [3] - The past year has seen significant geopolitical tensions, notably due to the war in Ukraine, conflicts in the Middle East, and the increasing use of sanctions and tariffs, which have shifted focus onto energy [4] Group 2 - The team responsible for this year's Energy Outlook worked diligently over the summer to compile the report, highlighting their commitment and effort in producing valuable insights for the energy sector [2] - The launch of this year's Energy Outlook attracted a large audience, both in-person and virtually, indicating strong interest in the current state and future of the energy industry [1]

Core Insights - The artificial intelligence sector is showing signs of a potential significant correction, with AI stocks, particularly the "Magnificent Seven," making lower highs since December 2024, diverging from broader market performance, a pattern that historically precedes major corrections [1][20]. Hedging Strategies - The I/O Fund has been 100% hedged since December 27, 2024, as investors seek alternative opportunities amid high AI unicorn valuations of $2.7 trillion despite limited revenue and profits [2][20]. - Volatility ETFs, such as the ProShares Ultra VIX Short-Term Futures ETF (UVXY), offer leveraged exposure to short-term VIX futures, making them effective during market stress, with current VIX hedging premiums at 2.2% for a one-year put option on the S&P 500 [3]. - Inverse ETFs like the ProShares UltraPro Short QQQ (SQQQ) provide direct negative correlation to major indices, with SQQQ surging 30% during recent Nasdaq declines [5][6]. Defensive Instruments - Long-duration Treasury bonds, particularly the iShares 20+ Year Treasury Bond ETF (TLT), benefit from flight-to-quality dynamics during equity corrections, averaging 2.1% gains during significant VIX spikes [7]. - Treasury Inflation-Protected Securities (TIPS) offer protection against inflation and downside protection during market stress [8]. Defensive Sector ETFs - Consumer staples and utilities sectors provide stability during market corrections, with the Vanguard Consumer Staples ETF (VDC) offering exposure to recession-resistant companies [9][10]. Sectors Positioned for Growth - The energy sector is expected to benefit from AI's power demands, with companies like Constellation Energy anticipating 10% annual earnings growth through 2028 driven by AI demand [11]. - The demand for copper is expected to rise significantly due to infrastructure development for AI, with the iShares Copper and Metals Mining ETF (ICOP) providing exposure to copper mining operations [12][13]. - Small-cap value stocks are showing historic outperformance versus tech stocks, with the Russell 2000 Value index performing strongly as investors rotate from expensive tech stocks [14][15]. Geographic Diversification - Emerging market equities provide low correlation to US tech stocks, offering diversification benefits during AI corrections, with ETFs like the Vanguard FTSE Emerging Markets ETF (VWO) gaining popularity [16][17]. Current Market Dynamics - Hedge fund positioning indicates increasing caution toward US stocks, with major funds adjusting their portfolios despite the AI boom [20]. - Market technicals suggest the S&P 500 must hold above 5860–5885 to avoid confirming a drop into the 5600 region, with a break below these levels potentially triggering a larger correction [21].

live. It's time now for the big picture. Let's welcome in the team from Charles Schwab.Joe Maza, head trading derivative strategist. Charles Schwab and Cooper Howard, director and fixed income strategist, Schwab Center for Financial Research. Let's start with you, Joe.We've been talking about a lot of um a lack of breadth in this market. You know, concentration risk. There's just a handful of names that, you know, continue to help chug things along.Why is that important. Why are you watching that. Well, I I ...

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Government Policy & Regulation - The Trump administration intends to continue utilizing emergency powers to prevent the closure of coal-fired power plants [1]

Market Overview - Stocks experienced further downside during trading, with major averages showing a lack of direction early but sliding into negative territory as the day progressed [1] - The Dow fell by 171.50 points (0.4%) to 46,121.28, the Nasdaq decreased by 75.62 points (0.3%) to 22,497.86, and the S&P 500 dipped by 18.95 points (0.3%) to 6,637.97, reflecting uncertainty in the artificial intelligence sector [2] Company Performance - Nvidia (NVDA) saw a decline of 0.9% after a 2.8% drop on Tuesday, while Oracle (ORCL) fell by 1.7%, indicating concerns about valuations in the AI sector [3] - The NYSE Arca Computer Hardware Index dropped by 2.3% after reaching a record closing high, highlighting significant weakness in computer hardware stocks [5] Sector Analysis - Gold stocks faced significant weakness, with the NYSE Arca Gold Bugs Index slumping by 2.2% due to a pullback in gold prices [6] - Airline stocks also experienced pressure, leading to a 1.6% decline in the NYSE Arca Airline Index, while energy stocks performed well amid rising crude oil prices [6] Economic Indicators - Traders expressed uncertainty regarding interest rates, with Federal Reserve Chair Jerome Powell indicating that near-term inflation risks are tilted to the upside, creating a challenging economic environment [4] - In the bond market, the yield on the benchmark ten-year note rose by 2.7 basis points to 4.147%, marking a nearly three-week closing high [8]