Stocks are trying to regain some lost ground in the early going today. Ditto for gold and silver. Crude oil is retreating a bit, while Treasuries and the dollar are flat.
Meta Platforms Inc. (META) said it would sell up to $95 billion in common and preferred stock to fund AI spending. Around $35 billion will be sold now, while the rest will be offered in at-the-market sales over time. Meta stock was down about 2.7% year-to-date as of Friday. Chip companies like Nvidia Corp. (NVDA), Advanced Micro Devices Inc. (AMD), and Broadcom Inc. (AVGO) said they would buy up to $5 billion in stock to help support the offering.
META (Blue), SPCX (Black), EWZ Red) – 3-Mo. % Change
Source: TradingView
Meanwhile, Elon Musk said SpaceX (SPCX) managed to sell $40 billion in bonds to pay for GPUs. But sources told Bloomberg that pricing discussions were still ongoing as of Sunday evening. AI company bonds have been falling in price, while yields have been climbing, on concern about the massive cost of the AI infrastructure buildout.
Brazilian stocks are in freefall after President Luiz Inacio Lula da Silva pulled off an unlikely election victory in the country. Lula is seen as less market friendly and financially disciplined than the right-wing candidate Flavio Bolsonaro he was running against. Investors had hoped Bolsonaro would take steps to rein in Brazil’s fiscal deficits, and bought stocks and the real currency on expectations of his victory. As of Friday’s close, the iShares MSCI Brazil ETF (EWZ) was up 31.8% year-to-date.
Finally, the Federal Reserve is meeting this week. Policymakers are expected to punt on an interest rate hike at the gathering that concludes Wednesday, despite rising inflation pressures. Instead, they will likely raise rates another 25 basis points at the next meeting that concludes Dec. 9. Long-term yields have been rising ahead of Fed hikes, though they dropped sharply recently amid selling in AI-related stocks and bonds.
