Schwab Strategist Warns a Single Mega-Cap Capex Miss Could Disrupt the AI-Driven Market

BeInCrypto2026/10/05 04:42

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Schwabs Kevin Gordon says the SP 500 sits 1% below its high, yet the average stock had a 14% drawdown. He says AI stocks carry the index, so one capex miss, a shortfall in AI capital spending, could disrupt earnings. However, that 14% is the average peak-to-trough drop among SP 500 members since early August, not their loss today. The index weights companies by market value, so the largest stocks dominate its moves. Why Is AI Carrying a Market That Looks Weak Underneath? Kevin Gordon, Schwabs head of macro research and strategy, spoke on Bloomberg This Weekend. Tech sat out much of the summer rally, he said, but AI-related stocks now hold up the market. Valuation worries and public pushback against AI are beginning to fade, he added. Similarly, Big Short investor Steve Eisman said in July that the whole market has become one AI bet. What Happens if Mega-Caps Post a Capex Miss? Gordon said one miss, paired with pared-back budgets, is where earnings disruption could begin. He relayed a line he said he could not claim as his own. its no longer earning season, its CapEx season. Kevin Gordon, via Bloomberg Meanwhile, FactSet projects 32.4% SP 500 earnings growth for 2026, up from about 15% at the start of the year. Apollo Global Management chief economist Torsten Slok issued an AI debt warning last month. He said the cost of insuring cloud giants debt against default signals risk in debt-funded AI spending. In contrast, Gordon said Federal Reserve hikes at roughly every other meeting would be the best case for stocks. Such a pace would not aim to slow growth sharply or hit the labor market. Still, the index now rests on a few spending budgets, while the average stock has already taken a double-digit hit. Third-quarter earnings season, which opens this month, will show whether those budgets hold.

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Bitget•2026/10/05 06:30

BUZZ - India's M&M Finance sees biggest 10-week surge in stock price due to growth in quarterly lending

On October 5, shares of non-bank lender Mahindra & Mahindra Financial Services (MMFS.NS) jumped as much as 6.53%, marking the largest intraday gain in 10 weeks, reaching 340.3 rupees per share; MMFS most recently rose 2.6%. According to MMFS’s business update, total lending in the September quarter rose 22% year-on-year to 164.9 billion rupees, boosting the stock price. Collection efficiency for Q2 of FY2027 reached 97%, compared to 96% in Q2 of FY2026. Morgan Stanley stated that MMFS’s Q2 update indicates good asset quality and a recovery in loan growth. However, Morgan Stanley and Jefferies reiterated a cautious outlook on FY2027 earnings due to insufficient monsoon and geopolitical uncertainties. Exchange data show that MMFS shares have fallen 18.8% so far this year. (For the convenience of non-English speakers, Reuters has generated automated translations of this report in several other languages. As automated translations may contain errors or lack necessary context, Reuters does not guarantee the accuracy of the automated translation and provides it solely for the reader’s convenience. Reuters assumes no liability for any damage or loss caused by the use of automated translation functions.)

路透社•2026/10/05 06:16