Latest / Arctos x Teddy Sin - Coffee Break, Market Take / 30/10/2026 Fri - Big Tech's AI spending just became a bill
Transcript
- This is my AI voice. The script comes from my market research system, and a person checks it before it goes out. It's education, not personal investment advice. Good morning. Teddy here. It's Friday, the thirtieth of October. Grab your coffee. Today's story is about a bill. For two years, we've been told one thing about Big Tech. Spending more on AI means getting stronger. More data centres. More chips. More power. On Thursday, the market looked at that spending and asked a different question. Who is paying for it? Let's start with Alphabet. Google's parent fell about twelve percent in one day. That's its worst session since it listed in 2004. Nearly five hundred billion dollars of value, gone before dinner. Here's why. In one quarter, Alphabet spent fifty-one point three billion dollars on buildings, servers and chips. After that spending, its free cash flow was negative nine point one billion. That's the second negative quarter in a row. To keep building, it borrowed and sold new shares. Now compare Microsoft. It also spent heavily, about forty-five billion dollars. But its Azure cloud business grew forty-eight percent, and it still had eighteen point six billion dollars of cash coming in. The stock went up. Same industry. Same AI race. Very different result. One spends and earns. The other spends and borrows. Think of two families renovating the house. Both buy new furniture. One pays cash. The other puts it on the credit card. From the street, both houses look nice. The bank statement tells you who sleeps well. Then, after the close, Amazon reported. Sales grew twelve percent and AWS grew thirty-nine percent. But Amazon plans about two hundred and twenty billion dollars of infrastructure spending this year. The stock fell about ten percent after hours before trimming the drop. That reaction carries into tonight's US session. So where did the money go? It didn't leave. It moved. The Nasdaq fell one point three eight percent. The Dow fell only a quarter of a percent. And the Russell 2000, the small companies, actually rose about one percent. That's rotation, not panic. Worth remembering. Second story. Inflation won't sit down. On Wednesday, the Fed held rates between three point seven five and four percent. But two officials voted for a hike. Then Thursday's data gave them more reason. September PCE inflation rose to three point six percent. Core was three point one. The economy grew three point four percent last quarter, faster than expected. Strong growth plus sticky prices means rates stay high. The ten-year Treasury yield sat near five percent. That's a weight on gold, which dipped to about four thousand and thirty-eight dollars. It's also a weight on Bitcoin, which slipped back under eighty thousand dollars. Third story. Today is the Bank of Japan's turn. The BoJ announces its decision around midday, Malaysia time. The rate is one point two five percent. Most previews expect a hold, with firmer words about inflation. The Nikkei closed one percent higher on Thursday, at sixty-four thousand five hundred and ninety-five. That's three days up in a row. So the pressure there is two-way until Tokyo speaks. A quick look at the rest. Oil is stuck between peace talks and attacks. Hopes for US and Iran talks pulled prices down. Reports of Houthi strikes on Saudi facilities pulled them back. Brent settled at one hundred fourteen dollars eighty-eight. Pressure is two-way. Palm oil futures fell sixty-three ringgit to four thousand three hundred and ninety-one, on worries about rising stocks. The KLCI slipped point one seven percent to one thousand six hundred and eleven. One quiet positive: foreign investors were net buyers for a second day. Hong Kong's Hang Seng fell point six percent, back below twenty-three thousand. Tech names there fell almost three percent. In Europe, the ECB held rates. Christine Lagarde said a hike was debated. The DAX still rose one point three percent. So what do we do with all this? We go back to three things. Candles. Direction. Momentum. Candles tell you what price actually did, not what the headline said. Direction tells you which side the pressure sits on. Momentum tells you whether the move still has fuel. Today has two clocks to watch. The BoJ around midday. And the US open at nine thirty tonight, Malaysia time. It's also the last trading day of October, so moves can stretch further than the news suggests. And a reminder: US clocks change this Sunday. From Monday, the US open moves to ten thirty at night. Size your risk before you look for a setup. Not after. One thought to leave you with. A company can grow and still worry its owners. The same is true for us. Look at the cash, not the headline. This is educational market commentary, not personal financial advice. No outcome is guaranteed. Markets carry risk of loss. Size your risk before any trade. Survive first. See you tomorrow.