Two things I'm thinking about:
1. Oracle's results, and what it says about what people say about AI
I won't add much to the pile-on over Oracle's results last night as an AI signal, other than noting they were largely celebrated by analysts during the call, whle pilloried by markets. I used to call that "atta boys!" during my equity research days, and it was always startling how little it had to do with the contents of the call, and more about maintaining access and deal flow.
I will, however, share this passage from The Economist on the results, however. It does a nice job of making clear just how little AI-besotted technology companies like Oracle resemble ... themselves of yore:
Consider how Oracle stacks up against the 1,000 biggest non-financial firms listed on the rich world’s top bourses along six measures of corporate performance: operating and free-cashflow margins; operating profit to interest expense; capex to revenue; total debt to operating profit (before depreciation and amortisation); and return on capital. Then run a regression to find the closest match to Oracle’s profile across these six variables
Ten years ago the answer was Amgen, an American biotech giant. The remaining top ten doppelgangers included other innovators (Pfizer and AbbVie in life sciences and Broadcom in chipmaking), reliable services firms (Equifax in credit scoring, Roper Technologies in business software and Verisk Analytics in consulting) and a few industrial businesses.
Today Oracle is a spitting image of Antofagasta, a London-listed Chilean copper miner, followed by nine American utilities.
2. Q3 GDP isn't out and it already makes no sense
JPM analysts are arguing that the latest U.S. trade and inventory data imply 3.5% GDP growth in Q3, a surprisingly strong number (when it eventually gets released). But the composition makes no sense.