Bloomberg Daybreak: Asia Edition US Government Shutdown Looms as Jobs Data Awaits, APAC Stocks Mixed
13 snips
Sep 29, 2025 James Abate, Managing Director at Horizon Investments, delves into the potential impact of a looming US government shutdown, highlighting how it could delay vital job data and affect market sentiment. He discusses the shifting dynamics in equity leadership, particularly the dominance of growth stocks. Abate expresses concerns over AI infrastructure spending and its implications for capital returns. Additionally, he analyzes inflation trends and their effects on interest rates, emphasizing the intricate ties between economic data and political developments.
AI Snips
Chapters
Transcript
Episode notes
Concentration Creates Style Distortion
- Market leadership is concentrated in a few mega-cap growth names that now act like defensive stocks.
- This style distortion raises the potential for a rotation and elevated volatility when economic growth inflects.
AI Capex Risks Return On Capital
- Heavy AI infrastructure spending may outpace realistic revenue, pressuring returns on capital for tech firms.
- Falling asset efficiency could trigger derating in once-prized growth names if profitability doesn't follow capex.
Monitor Stock Reaction To AI Capex
- Watch for negative stock reactions when companies announce increased AI capital spending.
- If that happens, expect CFOs to rethink AI capex and potentially scale back future investments.