Bulls vs. Bears

AI demand is booming. So why are investors selling?This week on Bulls vs Bears, the MPC Markets team unpacks hyperscaler cash burn, soaring AI infrastructure spending and why strong earnings aren’t always enough to send shares higher.With Google, Amazon, Microsoft and Meta in focus, we debate whether the sell-off presents a long-term opportunity—or signals more pain ahead.Plus:• Earnings reactions across Intel, Caterpillar and ServiceNow• Why falling shares after good results can be a warning sign• The potential rotation from Big Tech into healthcare, small caps and real assets• Australian inflation, the RBA outlook and the rally in bank shares• The team’s buys, avoids and wildcardsIs the AI trade running out of steam, or are expectations simply being reset? Share your view in the comments.Explore MPC Markets and Mosaic:https://www.mpcmarkets.com.au/mosaic/Subscribe for more Bulls vs Bears market debates.General information and opinions only. This content does not consider your personal objectives, financial situation or needs and is not a personal investment recommendation. Consider its appropriateness and seek professional advice before acting. Investing involves risk.#BullsVsBears #AIStocks #StockMarkets

Everybody HATES Datacenters (NOT IN MY BACKYARD)NextDC can’t expand in Lane Cove or Footscray. The SOX is 27% off its highs and sitting on the 200-day. Up to 70% of the world’s websites just had a PHP vulnerability. Mark, Kai, Jonathan and Phil are all bearish.This week: the data-centre NIMBY backlash, whether the chip trade is oversold, the PHP security mess, Meta getting belted on its AI funding plans, and why next week’s hyperscaler earnings matter. Oil is at a five-month high. Power is the bottleneck everyone said it would be.General advice only. Not personal advice.

Hot inflation (fuel-driven PPI and CPI), a $1.9 trillion SOX drawdown and CoreWeave’s credit situation dominate this week’s Bulls vs Bears.

We look at why the inflation numbers feel higher in the real world than the headline, whether CoreWeave’s short-duration debt and CDS spike actually threaten the broader AI trade, and how the hyperscalers’ cash flows change the picture. Also covered: the ASX rotation into safer stocks while US tech sold off, WiseTech staying out of the headlines, US banks missing expectations, SK Hynix and Samsung under pressure, bond yields, and our buy/avoid/wildcard calls including Megaport, PLS and Goodman.

From the MPC Markets team.

OpenAI printed $50 billion. The figure in circulation was $68 to $70 billion. A $20 billion miss, against commitments that need 75 to 80 per cent compounding for three years. On their own numbers they were already about $300 billion short of those commitments by 2030.

Firmus was the local disaster. $43.7 billion was the valuation ASX investors would not wear. The "oversubscribed" line lasted until the price was cut to $8.25 and the float was pulled. Front page of Bloomberg. Front page of Reuters. Morgan Stanley and the lead brokers own that one. Valued above Transurban. This is why ASX tech is still three companies, and why the next proper float will list somewhere else.

SpaceX is raising another $40 billion. $10 billion bank debt, $30 billion from institutions. JT's version of the prospectus: two pages, an arrow, the universe. Ten gigawatts at about $50 billion a gigawatt, so this is a deposit. TerraFab, no TSMC, maybe Intel. Betting against Elon has been a horrible trade. The debt still has to get paid.

Kai likes the Cursor and Colossus angle and is the only bull for next week. Mark doesn't love banks flogging Oracle CDS. Philip wanted a proper ASX tech listing and got a debacle instead.

We also get into Firmus immersion racks and whether the patents are a moat, CCC credit spreads blowing out, global banks rolling over, Maas Group halted after the Firmus stake and contract book were marked down, and a Trump week that was an 11 out of 10 with midterm postal votes already open.

Buys and avoids:

JT buys Ampol and Viva, avoids the euro, wildcard Deterra.

Philip buys Telix, avoids NEXTDC, wildcard Clarity.

Kai buys EOS on the $700 million GCC contract, avoids Maas, wildcard JB Hi-Fi.

Mark buys a short-dated VIX ETF, wildcard is a manufactured geopolitical flare-up before the midterms.

Columbus Day Monday. US bank earnings from Tuesday. Hyperscalers at the end of the month. Greece is currently a better credit than France.

General information only. Not personal financial advice. MPC Markets Pty Ltd, AFSL 296877. mpcmarkets.com.au

CPI at 4%. A White House AI pact with zero legal force. And 59% of the S&P already more than 20% off its highs.This week Mark, Kai, Jonathan and Finn (Phil is on the boat) sit down with client and fifth-generation farmer Dan. He ran apples for 27 years, then switched to cattle because frost at blossom is not a cycle you can sit through. The inflation half is diesel, supermarket pass-through, feeder cattle off the Carcoar yards, US herds at 50-year lows, and why the export cow does not have to bargain with Woolworths. There is also a kelpie, a highland copperhead, and a bloke near Coonabarabran whose GPT writes the feed ration so he can stop driving across 7,000 acres to eyeball the mob.The super-intelligence half is less charming. Trump's morally binding agreement, Zuckerberg as spokesman, Jensen stuck in the front row, Dario scratching his leg. Sam Altman apologised to the Australian government and used the apology to disclose three more agencies past Medicare. Hugging Face sat on a breach for three days. The priority in the document was staying ahead of China. That was pretty much it.Micron grew profit 250% year on year, margins near 70%, and the stock closed up about 3%. French 10-year yields have gone vertical. US 10s hit 5.37%. The dollar index has broken out, which usually means the system is short of dollars, not long of confidence.Buys and avoids: Mader Group, BCOM, Micron, and a CITIC inflation-linked note (about 7x the index, funding nearer 2.5% than 7%). Avoids are the Aussie dollar, office property, Nike, and European credit. Wildcard from Mark: Newcastle by 20. Do not tell his family.

Bond Yields Hit 5.21%. Stocks Didn’t Get the Memo

Risk-on in equities. Bond yields up 20 basis points in a few days. That pairing is usually mutually exclusive.

The US 10-year hit 5.21 — highest since 2007 on the long chart they keep rolling out. Auctions were soft. Hyperscalers are now competing with the US Treasury for the same pile of debt. And in Australia the RBA is a 90% hike next week, with all four majors on board.

So why did stocks bounce? Meta. Muse launched, the stock was up nearly 20%, and that was enough to drag the S&P up about 0.7% and the Nasdaq about 1% while the Dow and Russell slipped. Muse put up the second-biggest post-launch download run we’ve seen, behind ChatGPT. Claude looks small next to it.

Mark, JT, Kai and Finn argue the thing the tape is ignoring: if the 10-year keeps going, the risk-free rate starts doing the job equities used to do, funding gets dearer, and a lot of private credit looks a lot less clever. Finn’s avoid is the whole private-credit-fund bucket. Mark’s buy is TBT — 2x long long-dated US yields. JT is the lone bull, mainly because last week’s breakout didn’t dump stocks and he needs to catch MG on the board.

Picks

JT: Southern Cross Gold (SXG) buy. ANZ and Temple & Webster avoid. Andean Silver (ASL) wildcard.

Finn: Genome ETF buy. Private credit funds avoid.

Kai: Zscaler buy. Uranium avoid. Southern Cross Engineering wildcard.

Mark: TBT buy. Avoid buying equities up here.

Three bears, one bull. Mark is bearish until at least 11 October. Micron reports next week if you needed another reason the market might refuse to fall.

Guest in the wings: Dan McClymont on cattle and soft commodities.

🔗 mpcmarkets.com.au for a free portfolio review.

General information only. Not personal financial advice. MPC Markets is a Corporate Authorised Representative (CAR 001309356) of LeMessurier Securities Pty Ltd (AFSL 296877).

Will they actually slow down AI? Dario Amodei, Sam Altman and Elon Musk say we should pace AI development — but we're not buying it. The three leaders of the AI race all agreeing on regulation? Smells like incumbents pulling up the drawbridge.

This week Mark, JT and Kai unpack the AI safety debate, $9 diesel in California and what it means for inflation, 924 Aussie construction firms entering administration off the back of the Bartholomew collapse, private credit risks that nobody wants to talk about, and why the Fed just changed the game with three more rate hikes on the table.

Plus — what the market's missing: passive ETF flows propping up prices, inflation expectations diverging from commodity prices, US government debt blasting through $40 trillion, and why we think real assets are the play.

All three hosts are bearish again. We scraped through last week's call by 0.25% and we're sticking to our guns.

Picks this week: Sigma, SentinelOne, silver miners on the buy side. Nine Entertainment, Aussie property and banks on the avoid. Wildcards include Arafura, HP Enterprise and a Tealix FDA win.

This is general information only and not personal financial advice. MPC Markets is a Corporate Authorised Representative (CAR 001309356) of LeMessurier Securities Pty Ltd (AFSL 296877).

Oil at $103. Treasury yields at 5%. Trump handing out $5,000 cheques. And former AI safety researchers say there's a 10%+ chance artificial intelligence ends humanity within the decade.

In Episode 136 of Bulls vs Bears, the MPC Markets team cuts through the noise on AI existential risk — is it a genuine warning or conveniently timed ahead of capital raises and IPO season? Plus: why analyst earnings forecasts have failed to warn investors ahead of every major crash, Uber burning through its entire annual AI token budget in four months, and the fertiliser angle no one's talking about.

All four hosts are bearish. Picks include Apple, Cloudflare, the VIX, shorting the NASDAQ, and selling crypto.

🔗 mpcmarkets.com.au for a free portfolio review.

General information only. Not personal financial advice. AFSL 296877.

Oil hit $93, Fed rate hike odds swung wildly, and Nvidia bought Hugging Face for $12.9 billion. Three simultaneous shocks heading into September, historically the worst month for equities.

This week we break down the oil breakout, the Warsh vs Waller showdown at the Fed, why open-source AI just became a closed shop, and what September seasonal weakness actually means for your portfolio. Plus stock picks, what the market is missing, and our bull vs bear calls for next week.

Featuring Mark Gardner, Kai Chen, Finn Judell and Jonathan Tacadena.

Key topics: Brent crude breakout, Fed September rate decision, Nvidia-Hugging Face acquisition, September seasonality, Berkshire cash levels, agriculture commodities, Robinhood blockchain, cybersecurity stocks, non-farm payrolls preview.

Free portfolio review → mpcmarkets.com.au Stock recommendations → Mosaic (mention the podcast for 3 months free)

General advice only. AFSL 296877 via LeMessurier Securities.

Jensen Huang has done it again. NVIDIA posted $59.7 billion in net income, more than 12 iconic companies combined, on 70% margins. Software stocks are surging, the SaaSpocalypse is dead, and we're only a quarter of the way through the hyperscaler capex cycle.

This week the boys break down NVIDIA's monster earnings, why ASX tech is lagging US software by 43%, Amazon's robotics play, the uranium setup heating up on US-Canada trade tensions, and warning signs in private credit. Plus the full Buy, Avoid and Wild Card picks for the week ahead.

Fear & Greed: 58 (Greed). Bull/Bear: 3-1 Bullish. Next week: Jackson Hole, Broadcom, ZScaler and Non-Farm Payrolls.