Core Viewpoint - Veteran investor Howard Marks does not currently label the artificial intelligence boom as a bubble, stating that while valuations are high, they are not excessively so [1][2]. Group 1: Valuations and Market Sentiment - Marks acknowledges the high valuations of AI-related stocks but emphasizes that high prices do not equate to a bubble [1]. - He notes that investor enthusiasm for AI stocks has led to historic highs in valuations for chipmakers and software companies, driven by fear of missing out [2]. - Marks believes that current investor optimism does not necessarily indicate irrational exuberance [2]. Group 2: Historical Context and Psychological Patterns - A comparison is drawn to the late 1990s internet boom, which transformed the world but also resulted in many worthless companies [3]. - Marks warns that psychological patterns seen in past bubbles often reappear, where investors assume current leaders will remain dominant and that even underperformers will succeed [3]. - He highlights the flawed logic of backing companies with minimal chances of massive success, labeling this as "bubble psychology" [4]. Group 3: Future Outlook on AI - Marks expresses confidence in the potential of AI, suggesting it is likely to deliver significant advancements, although the specifics remain uncertain [4]. - He concludes that the current AI rally does not exhibit manic behavior typical of bubbles [4].

Market Overview - The ongoing US government shutdown is impacting market sentiment and delaying key economic reports, with estimates suggesting that 640,000 federal workers may be furloughed, potentially raising the unemployment rate to 4.7% [2] - The S&P 500 Index is down -0.28%, the Dow Jones Industrials Index is down -0.16%, and the Nasdaq 100 Index is down -0.40% [5] - Market focus includes developments regarding tariffs, trade, and the US government shutdown, with upcoming releases of FOMC meeting minutes and consumer sentiment index [6] Corporate Earnings and Stock Performance - More than 22% of S&P 500 companies have provided guidance for Q3 earnings that are expected to exceed analysts' expectations, the highest in a year, although Q3 profits are projected to rise by only +7.2%, the smallest increase in two years [7] - Advanced Micro Devices (AMD) is up more than +5%, following a +23% surge, after being upgraded by Jeffries due to a deal with OpenAI [17] - Ford Motor is down more than -7% due to reported disruptions from a fire at an aluminum plant [14] Sector Movements - Chipmakers have retreated after an initial surge, impacting broader market performance, with notable declines in companies like KLA Corp, Lam Research, and NXP Semiconductors [13] - Homebuilder stocks are under pressure after Evercore ISI downgraded the sector, with major companies like DR Horton and Lennar down more than -2% [15] - Interest rates are influenced by hawkish comments from Kansas City Fed President Jeff Schmid, indicating a need to combat high inflation, which may affect T-note prices [9][10] International Market Developments - The Euro Stoxx 50 is up +0.02%, while Japan's Nikkei Stock 225 closed up +0.01% at a new record high [8] - European government bond yields are rising, with the 10-year German bund yield up +0.6 bp [11]

Economic Indicators - US MBA mortgage applications fell by -12.7% in the week ended September 26, with the purchase mortgage sub-index down -1.0% and the refinancing sub-index down -20.6% [1] - The September ISM manufacturing index rose +0.4 to a 7-month high of 49.1, exceeding expectations of 49.0 [6] - The September ADP employment change unexpectedly fell by -32,000, marking the largest decline in 2.5 years, while August was revised lower to -3,000 from +54,000 [5] Market Reactions - Stocks initially moved lower due to the US government shutdown, but later recovered, with the S&P 500 and Nasdaq 100 reaching new all-time highs [2][4] - The dollar index fell to a one-week low, while gold prices climbed to a record high amid risk-off sentiment [2] - Rising corporate earnings expectations are a bullish backdrop for stocks, with over 22% of S&P 500 companies providing guidance for Q3 earnings that are expected to beat analysts' expectations [8] Sector Performance - Pharmaceutical stocks rallied, with AstraZeneca closing up more than +9% and Eli Lilly up more than +8%, driven by hopes from Pfizer's deal with the US government [15] - Chipmakers and AI-infrastructure stocks also saw gains, with Super Micro Computer closing up more than +9% and Micron Technology up more than +8% [16] - Grocery retailers declined after Amazon announced a new private-label food brand, leading to Dollar Tree and Dollar General closing down more than -4% and -3% respectively [22] Upcoming Economic Data - Weekly initial unemployment claims are expected to increase by +7,000 to 225,000, and August factory orders are expected to rise by +1.4% month-over-month [9] - September nonfarm payrolls are anticipated to increase by +51,000, with the unemployment rate expected to remain unchanged at 4.3% [9]

Market Trends - Intel's stock rise due to Nvidia investment lifts chipmakers [1] - AMD's stock sinks [1]

Market Overview - The S&P 500 and Nasdaq 100 have reached new all-time highs, supported by falling bond yields and expectations of a 25 basis point interest rate cut by the Federal Reserve [2][5] - Major US stock indexes, including the S&P 500, Dow Jones, and Nasdaq 100, posted record highs last week due to expectations of Fed interest rate cuts [5] Economic Indicators - The September Empire manufacturing survey showed a significant decline in general business conditions, falling by 20.6 to a three-month low of -8.7, which was worse than the expected 5.0 [4][10] - China's economic data indicated weaker growth, with industrial production rising 5.2% year-on-year, below the expected 5.6%, and retail sales increasing 3.4% year-on-year, below the expected 3.8% [6] Company Performance - Tesla's stock rose over 5% after Elon Musk purchased nearly $1 billion in shares, leading gains in megacap technology stocks [2][14] - Nvidia's stock fell more than 1% following a ruling by China that the company violated anti-monopoly laws related to its acquisition of Mellanox Technologies [3][16] - Texas Instruments saw a decline of over 2% after China announced an anti-dumping investigation targeting its semiconductor products [3][16] Upcoming Events - The market is focused on upcoming economic data releases, including retail sales and manufacturing production, as well as the FOMC meeting where a rate cut is expected [7][8] - The FOMC is anticipated to cut the federal funds rate target by 25 basis points, with markets pricing in a total of 70 basis points of cuts by year-end [8]

Core Viewpoint - The competition in artificial intelligence is intensifying globally, with companies outside the U.S. starting to catch up, particularly in chipmaking and AI engines, which may deter some investors for unfounded reasons [1] Group 1: Alibaba's Position and Market Reaction - Alibaba Group's stock has risen by 11% over the past month, contrasting with NVIDIA's decline of nearly 3% following Alibaba's announcement of developing its own AI chip [7][8] - The market's positive reaction to Alibaba's new chip development indicates a bullish outlook for the company, suggesting a compelling reason for investors to consider buying [8] - Analysts forecast a potential upside of 18.33% for Alibaba's stock, with a 12-month price target of $162.38, based on 14 analyst ratings [10][11] Group 2: Strategic Developments and Future Outlook - Alibaba's move to develop its own AI chip comes in response to NVIDIA's decision to halt sales of H20 chips to China, indicating a strategic pivot to fill the demand gap left by NVIDIA [6][8] - The company has established data centers across Asia, positioning itself to benefit from the region's growing middle class, which is expected to provide strong tailwinds for future growth [10] - Historical stock performance shows that Alibaba's shares reached an all-time high of over $310 three years ago, suggesting the potential for revisiting or surpassing previous highs [9] Group 3: Institutional Interest and Market Sentiment - Institutional buying activity has reached $7.3 billion over the past quarter, signaling confidence in Alibaba's future fundamentals [12] - Despite the current Moderate Buy rating among analysts, there is a perception that this rating is conservative, driven by market fears regarding Chinese stocks [11][13] - The overall sentiment suggests that Alibaba is well-positioned in the AI race, with significant upside potential as the market begins to recognize its developments [13]

Market Overview - Wall Street experienced broad losses, with major indices retreating as investors adopted a risk-off approach due to concerns over high valuations, seasonal challenges, and fiscal strains [1][2] - The CBOE Volatility Index (VIX) surged nearly 20% to 19.2, marking its third consecutive advance, indicating increased market fear [1] Major Indices Performance - The Nasdaq 100 led the decline, falling 1.7%, while the S&P 500 decreased by 1.4% in its first session of September, historically the weakest month [2] - The Dow Jones lost over 500 points, or 1.1% [2] - The Vanguard S&P 500 ETF (VOO) slipped 1.5% to $584.49, and the SPDR Dow Jones Industrial Average (DIA) fell 1.1% to $451.04 [6] Sector Performance - Chipmakers were significantly impacted, with NVIDIA Corp. dropping 3.6%, Arm Holdings plc sinking 5%, and ASML Holding NV and Qualcomm Inc. each losing about 3% [2] - The Consumer Staples Select Sector SPDR Fund (XLP) outperformed, down only 0.3%, while the Technology Select Sector SPDR Fund (XLB) lagged, down 2% [6] Economic Indicators - The ISM Manufacturing PMI indicated a sixth consecutive month of contraction, suggesting that tariffs meant to protect domestic industries are increasing costs and delaying investments [3] - Safe-haven assets saw strong demand, with gold reaching record highs above $3,500 an ounce and silver surpassing $40 [3] Bond Market Activity - Long-dated yields rose across advanced economies, with 30-year U.S. Treasuries increasing five basis points to 4.97%, just below the 5% mark [4] Notable Stock Movements - Top gainers in the S&P 500 included Ulta Beauty Inc. (+6.45%), Biogen Inc. (+3.84%), and Ralph Lauren Corp (+3.36%) [5] - The worst performers included TransDigm Group Inc. (-7.50%), Constellation Brands Inc. (-6.97%), and Kraft Heinz Co. (-6.96%) [7]

Technology & Policy - Chinese government reiterated that it will not let TikTok's parent company sell its algorithm [1] - AI company Anthropic has partnered with startup Binti [1] Market Trends - Chipmakers experienced significant losses on Wall Street Wednesday [1]

Market Overview - U.S. stock futures declined on Wednesday following mixed trading on Tuesday, with major benchmark indices showing lower futures [1] - The S&P 500 and Nasdaq 100's retreat was attributed to failed peace talks involving President Trump and European leaders [1] - The Dow Jones index ended slightly higher, while the S&P 500 and Nasdaq Composite saw declines of 0.59% and 1.46% respectively [6][7] Economic Indicators - Investors are focused on Federal Reserve Chair Jerome Powell's upcoming speech for signals on interest rates, with an 82.9% likelihood of a rate cut projected for the September 17 decision [2] - The 10-year Treasury bond yielded 4.31%, while the two-year bond was at 3.76% [2] - U.S. housing starts increased by 5.2% to an annualized rate of 1.428 million in July, while building permits declined by 2.8% to an annualized rate of 1.354 million [5] Company Performance - Intel Corp. saw a 7% rally, extending its monthly gains to 27% after a $2 billion investment from SoftBank Group [5] - Palo Alto Networks Inc. jumped over 3% after reporting strong quarterly results [5] - La-Z-Boy Inc. dropped 24.57% after reporting weaker-than-expected financial results for Q1 of fiscal 2026 [15] Sector Performance - Real estate, utilities, and consumer staples stocks recorded the biggest gains on Tuesday, while information technology and communication services sectors closed lower [4] - Small-cap and value stocks have shown a tight correlation with interest rate expectations, becoming increasingly reactive to the Fed's next move [10][11] Analyst Insights - Economist Jeremy Siegel emphasized that Powell's speech could significantly influence market direction, with two primary scenarios outlined [9][10] - A dovish tone from Powell could signal a 25-basis-point rate cut, potentially benefiting small-cap stocks [14] - Conversely, a hawkish signal could lead to negative reactions in risk markets [14]

Market Dynamics & Geopolitics - The chip industry is navigating the impact of political factors, particularly concerning access to the Chinese market, which is one of the largest chip markets in the world [3][4][5] - Companies are trying to understand the "rules of the game" to maintain access to the Chinese market, potentially involving compromises or deals [2][5] - Restrictions on chip exports to China could impact the long-term growth and valuations of companies like AMD and NVIDIA [11][12] - China's potential shift towards domestic chip production could further impact the global chip market [11] Company Strategy & Risk Management - Companies are adopting a "read and react" approach to policy changes, rather than relying on forecasting [7] - Access issues to the Chinese market are expected to increase costs and complexity for chipmakers [13] - The fundamental narrative for investing in companies like AMD and NVIDIA remains strong despite these challenges [13] Intel's Situation - There are questions surrounding Intel's leadership and its ability to develop the right types of chips [14] - Potential leadership changes at Intel could be influenced by political factors [15][16] - Intel faces significant challenges in terms of corporate structure and innovation [17]