AGP Executive Report

Market Risk: Investors turned to bonds as AI and technology shares slid, pushing 10-year real yields to 2.58%. The retreat reflects doubts about whether AI spending can sustain market growth. Factory Pulse: Japan’s manufacturing PMI eased to 53.3 in October from 54.1, while South Korea’s fell to 51.3 from 53.9. Both remained in expansion, but weaker orders and rising costs cloud the outlook. Consumer Tech: Global smartphone shipments dropped 20% year on year to 254.7 million in the third quarter, their lowest level since 2013. Omdia expects a 12% full-year decline; Samsung kept the top spot despite a 5% shipment drop. India Outlook: India’s economy has grown 7.7%–8.6% over the past five quarters, but its Sensex gained just 8% in that span and fell about 15% through October, as sluggish corporate earnings failed to match GDP growth. Credit Watch: Bank lending to Indian NBFCs jumped 41.8% year on year in September, raising concerns about reliance on bank funding and the risk of contagion if loan quality weakens. Auto Demand: Hero MotoCorp’s October dispatches rose 16% year on year, led by a 61% surge in scooter sales, though total volumes slipped 4.2% from September.

Saudi Growth: Saudi Arabia’s GDP contracted 3.8% year over year in Q3, but non-oil activity grew 1.9%, helping cushion a 20.4% drop in oil output amid regional disruptions. Emerging Markets: Fitch warned that a hawkish US Federal Reserve and rising bond yields could raise borrowing costs and trigger capital outflows, though funding conditions may improve in 2027 if inflation eases. Digital Advertising: Meta’s ad revenue climbed 26% in Q3, more than twice Google Search’s 12% growth, sharpening competition as investors weigh AI’s impact on Alphabet. Auto Exports: BYD sales rose 11% in October, with overseas shipments up 103% as exports helped offset weak demand and price competition at home. Housing Outlook: Goldman Sachs expects US existing-home sales to fall to 3.9 million in 2027 and price growth to slow to 0.8%, with high mortgage rates worsening affordability. India Markets: Investors are watching oil prices, US-Iran tensions and quarterly earnings; Mumbai property registrations rose 9% in October despite seasonal disruptions.

US Markets: AI-linked shares slid after weak results from Alphabet and Amazon and Intel’s 29% plunge, pulling the S&P 500 down 1.8% and the Nasdaq 2.9%. Investors now face US elections, earnings from Apple and AMD, and jobs data as tests of the market’s AI-led rally. Big Tech: Amazon’s shares have given back more than half their post-earnings surge; investors are looking to cloud growth for a fresh boost, with AWS revenue forecast to rise nearly 40%. Global Trade: South Korean exports jumped 93.7% in October, their strongest annual growth since 1974, led by soaring semiconductor and computer sales tied to AI demand. Thailand Outlook: The central bank raised its growth forecasts to 2.4% for 2026 and 2.1% for 2027, but warned that gains remain concentrated while household spending and small-business lending weaken. Crypto: The sector lost about $360 billion in October amid rate concerns, fund outflows and a major exchange hack. UK Housing: Annual house-price growth slowed to 0.5% in October, its weakest pace since January 2024, as higher borrowing costs weighed on buyers.

AI Spending and Markets: Investors recoiled from plans by major tech firms to spend as much as $828 billion on AI infrastructure this year, helping drive a sharp market sell-off. OpenAI has also cut its fundraising target by $10 billion to $20 billion as investor caution grows. Vietnam’s Growth and Trade: Vietnam reported 9.01% GDP growth in the first nine months of 2026, but new U.S. tariffs now affect about 70% of its exports. Shrimp shipments to the U.S. fell 15% year on year, while exports to China rose 37%. US Economy: Moderate labor-cost growth offered some relief on inflation, but voter pessimism remains high despite economic growth, reflecting continued pressure on household finances. Business Climate: Italy’s Chamber of Commerce in Albania urged predictable fiscal policy, warning that proposed tax increases could weigh on prices, profit margins and investment.

Market Shock: A tech-led sell-off pushed the Nasdaq 100 briefly into correction territory as weak Intel and Amazon outlooks revived doubts about whether heavy AI spending will pay off. Alphabet suffered a record market-value loss of about $511 billion. Oil Risk: Brent crude touched $118 a barrel as attacks on Gulf shipping and energy assets raised fears of renewed supply disruption. Economic Pulse: The global picture was mixed: US third-quarter growth came in at 3.4%, while Germany grew just 0.2% and France slipped into contraction. Slower US labor-cost growth offered some relief on inflation. Africa’s Growth Challenge: The World Bank urged sub-Saharan African countries to turn rapid urbanization into jobs through better infrastructure, planning and private investment; the region’s urban population is projected to reach 1.7 billion by 2050. Trade Outlook: Ahead of China’s import expo, an Indonesian expert said the event could help smaller firms access Chinese buyers, while an ADB report warned that weak digital-trade rules and coordination are holding businesses back. Vietnam Autos: Sales rose 20.2% in the first nine months, putting the market on track to approach 700,000 vehicles in 2026 as electric and hybrid models gain ground.

Global Growth: The IMF sees India remaining the fastest-growing major economy, forecasting 7% growth in both 2026 and 2027, while global growth is projected at 3.1% this year and 3.4% next year. China’s first three quarters were supported by high-tech investment and closer regional integration. U.S. Outlook: Third-quarter GDP grew at a 3.4% annualized pace, above expectations, but housing investment fell and September consumer spending stalled. Goldman Sachs is tracking 1.8% growth for the fourth quarter as fiscal support fades. Europe: Eurozone GDP rose 0.4% in Q3, beating forecasts, but France contracted 0.1% as economic and market concerns return. Tech and Markets: Intel’s shares plunged after its forecast pointed to a prolonged PC-market slump, despite 78% growth in data-center and AI revenue. The setback adds to investor concern that heavy AI spending may outpace growth in core businesses. Credit: Kazakhstan’s bank lending grew 13.1% year over year by September, though expansion has moderated.

AI Valuations: Alphabet shed about $500 billion in market value after shares fell 12.6%. Slower-than-expected search growth and negative free cash flow heightened doubts about the returns on its vast AI spending, dragging tech shares lower in Asia. Economic Outlook: U.S. GDP grew 3.4% in the third quarter, beating expectations, but firmer inflation complicates the outlook for interest rates. Trade: China and Switzerland are set to sign an upgraded accord granting Swiss exports broad access to China, an unusual move as protectionist barriers rise elsewhere. Crypto Risk: A suspected major Binance hack sent crypto prices sliding; Bitcoin hit a six-week low as the exchange and token issuers froze billions in assets. Chipmakers: Intel shares plunged more than 20% after its outlook disappointed. Strong data-center and AI sales were not enough to offset a weak PC market.

U.S. Growth: Third-quarter GDP rose at a 3.4% annual rate, accelerating from 2.2% and beating expectations, as investment and consumer spending strengthened; weaker exports partly offset the gains. Central Banks: The ECB held rates steady as higher energy prices threaten to lift inflation and weigh on growth. Market Volatility: Caterpillar shares plunged despite an earnings beat and record backlog, after the company forecast only moderate sales growth; the stock has lost about $190 billion in value since June. Alphabet also faced a steep selloff as disappointing ad and YouTube results and investment costs unsettled investors over AI spending. Corporate Results: Heineken’s third-quarter revenue rose 9.7%, with beer volumes growing across all regions and Asia Pacific leading.

AI and Cloud: Microsoft’s Azure revenue grew 48% as quarterly free cash flow reached $18.6 billion, underscoring how cloud demand is helping fund its AI push. Alphabet’s cloud sales doubled, but heavy spending left it with negative free cash flow, highlighting investor focus on returns as well as growth. Monetary Policy: The Fed held rates at 3.75%–4% and described growth as strong, while warning inflation remains elevated. Retail Growth: Aritzia aims to nearly double revenue to $10.5 billion within five years, with the U.S. expected to drive 85% of growth through store openings and digital sales. Investment Outlook: Kenya’s President William Ruto is courting Russian investors, citing 5.3% economic growth in 2025 and opportunities in mining, transport and manufacturing. Energy Markets: U.S. natural gas futures rose as forecasts pointed to stronger demand next week, though mild weather is expected to limit heating needs.

Malaysia Outlook: Kenanga Investment Bank raised its 2026 producer-price growth forecast to 7.4% from 6.4%, citing costly energy and climate risks. Separately, Malaysia’s digital economy is projected to expand 20% to $48 billion in 2026, matching Vietnam for Southeast Asia’s fastest growth. UK Economy: The OBR cut its 2027 growth forecast to 1% from 1.5% as Middle East conflict lifts energy costs; inflation could near 4%. Housing: The Bank of Canada raised its rate by a quarter-point to 2.5% and warned that higher borrowing costs and affordability pressures will weigh on home buying and construction. AI Infrastructure: Vertiv’s third-quarter orders more than doubled year over year, prompting the data-center equipment maker to raise its 2026 sales and earnings outlook. Freight Rates: Werner expects early contract bids to bring average double-digit rate increases as the truckload market tightens, though it said a full-year pricing forecast is premature.

AI and Markets: US stocks edged higher on AI shares, but Big Tech earnings will test whether costly AI investment can deliver returns as borrowing costs and market volatility raise bubble concerns. Chip Demand: SK Hynix expects DRAM demand to grow in the mid-20% range in 2027, with AI data centers tightening supply; South Korea’s economy grew 1% in the third quarter, more than three times the central bank’s forecast, though household spending weakened. China Outlook: Passenger-car sales could return to modest growth in 2027, with a central forecast of 2% after a steep downturn this year. Trade and Investment: South Carolina Ports plans to pursue growth by expanding beyond manufacturing cargo, while China’s high-tech industries drew 33.8% more foreign investment in the first nine months.

AI and IPOs: Anthropic’s Nasdaq filing showed first-half revenue soaring to $16.3 billion from $1.16 billion a year earlier. Its $80.7 billion net loss was largely tied to valuation changes in convertible notes; operating losses narrowed to $693 million. Aerospace: Boeing shares fell 9.5% after the company pushed its target of producing 47 737s a month into early 2027 and forecast lower free cash flow than analysts expected. Consumer Demand: Coca-Cola lifted its annual profit forecast on strong international demand, while warning that higher costs and pressure on consumers could persist into 2027. Economic Outlook: South Korea’s economy grew 1% in the third quarter, buoyed by chip demand, but spending fell. China’s export strength is also masking continued weakness at home. Energy Investment: The energy storage market is forecast to exceed $172 billion by 2030, supported by renewable-energy growth and demand for more reliable power grids.

Asian Outlook: South Korean consumer sentiment slipped to 105.4 in October as stock-market volatility and Middle East tensions weakened expectations, while China’s September industrial profits rose 14.4% year on year. The gains remain uneven: electronics firms surged, but furniture makers continued to struggle. Green Investment: Ho Chi Minh City opened GRECO 2026 to promote sustainable growth and investment; the city reported 9.06% economic growth in the first nine months and a sharp rise in foreign investment. AI and Markets: Anthropic’s IPO filing puts the AI boom’s economics under scrutiny, pairing explosive revenue growth with steep losses and heavy computing costs. Funding Trends: New Zealand start-ups raised $775.7 million in the first half of 2026, more than double the year-earlier total, with larger investment rounds driving the increase. China Tourism: Domestic trips rose 6.2% in January–September, but tourism spending grew more slowly, up 2.2%.

Trade Growth: Japanese seafood exports to Malaysia rose about 40% in January–August, reaching ¥5 billion as demand for premium food grew. Industrial Outlook: The global industrial automation market is projected to exceed $334 billion by 2030, reflecting manufacturers’ push toward digital operations. AI and Capital Markets: Anthropic filed for a US IPO after first-half revenue surged to $16.3 billion; heavy infrastructure spending and steep reported losses underscore the risks investors will weigh. Bank of America has also warned that AI financing pressures could threaten markets in 2027. Market Oversight: The CFTC and NBA agreed to share information on prediction markets, amid concerns over insider trading and disputes about regulatory authority. Company Results: Infosys reported 11% year-on-year revenue growth for its latest quarter, with AI contributing 10.5% of revenue.

Asian Markets: South Korea’s KOSPI opened about 1% lower as investors weighed global volatility and a packed earnings week. Samsung Electronics and SK Hynix are expected to post combined third-quarter operating profit of roughly 184 trillion won, lifted by AI-chip demand and higher memory prices. Energy Investment: Singapore plans a five-year infrastructure buildout as electricity demand could rise from 8.6 gigawatts to as much as 13GW by 2031, driven partly by data centres and semiconductor manufacturing. Currency Outlook: Goldman Sachs says the yen may offer better protection against an AI-led market shock, after it strengthened during last week’s tech sell-off. China’s Consumer Economy: Outdoor recreation reached an estimated 3.17 trillion yuan in 2025, with more than 500 million participants and growing demand beyond major cities. Nigeria’s Business Growth: MTN Nigeria’s CEO urged better execution of reforms, citing digital infrastructure, easier access to credit and wider market access as priorities for small businesses.

China’s Market Reversal: Chinese stocks have entered bear-market territory, with the CSI 300 down nearly 20% from its June peak as investors reassess AI valuations and economic growth. AI Costs: A new southern China power market gives data centers and other large users more flexibility to buy electricity, potentially helping manage the rising cost of AI computing. Growth Outlooks: Jordan’s economy grew 3% in the second quarter despite regional pressures, while Vietnam is targeting at least 10% growth in 2026 after a strong first nine months. Cambodia, facing weaker tourism and higher costs, is shifting toward small-scale manufacturing and higher-value agricultural processing. Trading and Jobs: Indian brokerages posted strong profit growth despite an 11.7% quarterly drop in equity turnover, while U.S. jobless claims remain near historic lows even as hiring stalls—a warning sign for consumer spending.