October
The current global bond rout has reminded many analysts & investors of the Eurozone banks 2011 debt crisis.
In the panic banks suffered steep losses in a bond selloff, forcing some national governments to bail them out, which added to national debts that have yet to be paid back.
Investors are backing away from AI-related bonds. The market value of bonds backing companies building data centres has been slumping recently, driving interest rates higher.
Investors demand to be paid extra for taking on what many see as an increasingly risky investment - FT.
After dumping U.S. treasury bonds and notes during the current global bond selloff, some investors are now snapping them up. The reasoning: yields are still near record highs.
Buying treasuries now will lock in those high yields when the selloff finally ends and rates descend again.
Last month, companies involved in AI’s infrastructure buildout dropped to $23b, less than half of the amount of bonded debt & private placements they tallied in August, according to Morgan Stanley analysts.
Issues of new bonds virtually halted in Sept, the analysts noted.
OpenAI has booked revenue at an annualized rate of about $50b so far this year, according to public documents it has filed. Roughly $20b less than analysts & investors had projected in late Sept based on company info.
Revenue is key to gauge the growth of demand for AI products.
Loans on apartment buildings made in 2021 are in trouble. The delinquency rate among loans have been bundled into securities for investors – collateralized loan obligations – has risen sevenfold since Oct 2023 according to Morgan Stanley.
These loans are subject to US Fed rates.
The construction boom in AI data centers is shaping up to be the biggest bet in U.S. history made on an emerging technology, The WSJ reported.
From the beginning of 2025 through 2032, the industry is expected to invest $10.3t, according to calculations by Columbia University.
$4.3t in corporate bonds issued by non-financial businesses will mature in 2027 through 2031 which will test the financial strength of companies who sold the bonds in 2021 when interest rates were lowest.
Roughly $572b will mature next year, while $1.03t will come due in 2030.
Many companies pushed their due dates further into the future through refinancing previously, Reuters noted.
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Qiagen, a German company making lab equipment, accepted a €10.8b takeover offer from a group led by EQT, a Swedish private equity firm specializing in buyouts. Qiagen’s board approved the sale, which pays stockholders €46 a share, 40% above negotiations became public knowledge.
France’s bond crash spills into stock market France’s flagship Cac 40 stock index has declined 3% this year while its equivalent in Europe, the Stoxx 600, has grown by more than 7%.
The gap is the largest since 2010- the country’s nat'l debt has grown to 119% of GDP- FT reported.
The AI buildout are Alphabet, Amazon, Meta, Microsoft & Oracle. Together they have announced capital spending this year totalling about $800b.
Their collective cash flow forecast for 2026 is $700b - data centre contruction would call on AI users to spend $3.7t a year. FT reported.
The worlds economy has become so narrowly balanced on the AI boom that a sharp reversal in AI stock values could spark a global financial crisis, the IMF has warned in its latest Global Financial Stability Report.
The AI boom has grown its value by 50% in the past two years.
About 12 million barrels of oil and two million barrels of refined products are transiting the Strait of Hormuz each day. Maintaining that flow is essential to avoiding a global oil shortage. However, producers and buyers are having trouble shipping it.
“Without it, you have that $200-a-barrel scenario so it’s important it continues,” Russell Hardy, CEO of Vitol, the world’s largest oil trader, told the Financial Times. The problem, he said, is “there’s not enough shipping to go around.”
Valuation multiple is a measure of how investors see a company’s future. The multiple is the price investors are willing to pay for each dollar a company earns. The collective multiple for the S&P’s 500 index has been sliding, even though the overall value has continued to rise.
The world’s credit market could see sharp swings as the surge in AI-related borrowing leaves the bond market “unusually concentrated,” private equity firm KKR warned in a 30 Sept analysis.
AI-related companies are expected to flood $8t into AI infrastructure before 2031.
That could leave 20% of the world’s investment-grade bond market, usually the safest, exposed to the risks of an industry now betting all its chips on an uncertain future.
The overall value of the U.S. stock market continued to reach new records in this year’s third quarter, with earnings among the Standard & Poor’s 500 companies again exceeding 25%.
Investors ignored the Iran War, persistent inflation, & the bond market’s flirtation with collapse.
This year through August, China has brought in $158.8b worth of gold, more than 1,000 metric tons. That compares with 886 metric tons worth $96.5b in all of 2025.
The Central bank & private investors are purchasing gold as long-term wealth preservation strategy - the FT reported.
Rising bond yields have become a major concern to governments as interest payments eat at their budgets. Borrowing costs are rising, in part, because investors feel a growing concern about the sustainability of government budgets that keep increasing faster than revenues - IMF.
This year through August, China has brought in $158.8b worth of gold, more than 1,000 metric tons. That compares with 886 metric tons worth $96.5b in all of 2025.
The Central bank & private investors are purchasing gold as long-term wealth preservation strategy - the FT reported.