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Goldman Sachs

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11 Sept

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Goldman Sachs and Deutsche Bank Agree: The S&P 500 Rally Isn't Over

Goldman Sachs pushed back hard against fears of an S&P 500 earnings bubble on Tuesday. The firm projects another quarter of double-digit growth starting next week. Deutsche Bank echoed that confidence separately, reaffirming its year-end target of 8,000 points for the benchmark index. Goldman Sachs Dismisses S&P 500 Bubble Talk, Reaffirms Bullish Outlook An earnings

BeInCryptoBeInCrypto•Luis Blanco23h ago
  • neutral toward Goldman Sachs · 90%

Investors grow selective as AI-linked companies flood bond market with debt

New York: The corporate bond market is increasingly splitting into two camps, with investors showing greater caution towards debt issued by AI-related companies while continuing to enthusiastically back more traditional issuers such as financial and industrial firms. According to portfolio managers and market analysts, concerns are not centred on the creditworthiness of major technology companies. Instead, investors are focused on the unprecedented scale and uncertainty of borrowing required to finance data centres, semiconductors and AI infrastructure. Goldman Sachs estimates that gross debt issuance by hyperscalers could reach a record $420 billion in 2027, representing a 60 per cent increase compared with 2026 forecasts. By comparison, overall US corporate bond issuance rose 30 per cent year-on-year to $1.9 trillion through August, according to data from the Securities Industry and Financial Markets Association. "We're being very selective in terms of how we invest within hyperscaler debt," said Colby Stilson, Head of Fixed Income at Brown Advisory. "Our degree of investment conviction needs to be very high because of the coming supply and because of the lack of visibility into that return on invested capital," he said. Investors look beyond AI Market participants say many investors are increasingly directing money towards sectors outside the AI ecosystem. Loren Moran, fixed-income portfolio manager at Wellington Management, pointed to recent pharmaceutical and insurance acquisition financings that attracted strong investor demand with little or no pricing concessions. While investors still have substantial cash available to deploy, many are seeking opportunities away from large technology issuers heavily exposed to AI spending. The contrast was evident in recent debt offerings. Google parent Alphabet reportedly had to offer significant pricing concessions during an August bond sale, while insurance broker Aon's $13.5 billion acquisition financing attracted approximately $65 billion in orders. Strong demand enabled Aon to tighten pricing on its 30-year bonds by 35 basis points, highlighting investor appetite for less heavily supplied sectors. AI bonds trade at wider spreads As borrowing by hyperscalers, chipmakers and data-centre operators continues to increase, investors have demanded wider spreads to absorb the growing supply. According to Goldman Sachs data, AI-related issuers are trading at spreads of around 115 basis points, compared with 78 basis points for the broader investment-grade market, according to ICE BofA figures. Lon Erickson, portfolio manager at Thornburg Investment Management, said debt issued by companies such as Meta Platforms and Alphabet has consistently traded at wider levels than similarly rated peers, despite their strong balance sheets and cash generation. The additional yield reflects expectations that these companies will continue to return to the bond market as AI-related capital expenditure grows. "Investors are only able to digest so much, so fast," Erickson said. Concentration concerns emerging Beyond pricing, investors are becoming more conscious of concentration risk. Some institutional investors are approaching internal limits on exposure to individual companies once debt issued through related structures, including data-centre financing vehicles, is combined with existing holdings. Analysts say many investors also want flexibility in case enthusiasm for AI investments begins to cool. Rather than taking large positions today, some are opting to preserve capital in anticipation of potentially higher yields in future issues. Nick Elfner, co-head of research at Breckinridge Capital Advisors, noted that some hyperscaler deals have attracted lower levels of demand than investors typically expect from large, high-profile issuers. He added that several transactions have traded poorly after issuance, contributing to investor caution. Credit quality remains strong Despite the growing selectivity, market participants emphasise that concerns are focused on supply rather than financial strength. Russell Brownback, Deputy Chief Investment Officer for Global Fixed Income at BlackRock, said wider spreads among AI-related companies reflect basic supply-and-demand dynamics rather than deteriorating credit quality. Companies continue to borrow because they believe returns from AI investments will exceed financing costs, while investors are receiving yields more commonly associated with lower-rated issuers despite lending to highly rated companies. For now, bond investors appear less concerned about the ability of hyperscalers to repay debt and more focused on managing exposure amid an unprecedented wave of AI-related borrowing. "There are a lot of investors that just want something other than hyperscaler debt for now," said Wellington's Moran. "The market is a bit starved for anything ex-hyperscaler."

MBMobile Business•Reuters22 Sept

Will Record Copper Futures Trigger a Global Energy Crisis?

Macroeconomics and Economic Realities Copper futures recently hit historic highs across major global exchanges. COMEX contracts touched a record $6.894 per pound on September 10. London Metal Exchange three-month contracts reached a record $14,858.50 per metric ton the same morning. LME copper has climbed about 19% in 2026 and roughly 48% over twelve months. Hours after that peak, futures fell more than 4% on reports that Washington had not decided on refined copper tariffs. That reversal reveals two forces at work: a genuine structural deficit and a fragile tariff premium. Global mine output fell 1.1% during the first half of 2026. High interest rates and inflation complicate capital expenditure for major mining operators. Meanwhile, non-discretionary industrial demand continues to outpace physical extraction capacity. Geopolitics and Geostrategy Resource nationalism increasingly dominates international copper trade and supply chain dynamics. Major producing nations like Chile and the Democratic Republic of Congo tighten domestic regulations. Goldman Sachs estimates disruption could put 200,000 tonnes of Chilean and 125,000 tonnes of DRC output at risk this year; together, that equals roughly 1.4% of global mined supply. Furthermore, trade policy friction creates significant volatility in global inventory distribution. Washington imposed 50% tariffs on semi-finished copper products in July 2025, excluding refined cathode and concentrate. Commerce is reviewing whether a 15% refined copper tariff should begin in 2027, rising to 30% in 2028. Consequently, traders moved massive copper stockpiles into domestic American COMEX warehouses. LME stockpiles fell for 42 consecutive days, the longest run of declines since 2014. Sovereign nations now treat refined copper as a critical national security asset. High-Tech Industry Trends Electrification and artificial intelligence drive unprecedented demand for physical red metal. Artificial intelligence data centers require massive power distribution infrastructure and dedicated transformers. Engineering teams utilize thick copper busbars to deliver megawatts of electrical power. Thermal constraints prevent operators from substituting lower-cost aluminum in high-density facilities. Simultaneously, utility companies modernize electrical grids to connect utility-scale renewable energy assets. Wind and solar installations consume four to six times more copper per megawatt than legacy power plants. These converging high-tech trends guarantee sustained long-term consumption growth. Technology, Science, and Pharmaceuticals Copper plays a pivotal role across modern material science and medical technology. Advanced semiconductor manufacturing leverages high-purity copper interconnects to accelerate processing speeds. In pharmaceutical settings, copper's innate antimicrobial properties provide continuous biological surface protection. Medical facilities install specialized copper alloy surfaces to eliminate healthcare-associated pathogen transmission. Furthermore, high-performance computing clusters utilize copper cold plates to dissipate massive thermal heat load. Thus, copper remains an essential physical element bridging physical computing hardware and biological sciences. Business Models and Leadership Major mining corporations face a dramatic shift in commercial pricing power. Spot treatment and refining charges plummeted into negative territory for Asian metallurgical smelters. Miners now dictate terms to intermediate processors desperate to secure scarce raw concentrate. Freeport-McMoRan declared force majeure at its Grasberg operation and cut 2026 output guidance. Executive leadership across the sector prioritizes operational efficiency over aggressive output expansion. Mining executives cut non-essential capital spending while optimizing existing Tier-1 assets. Rising energy costs compound the pressure, since a 10% oil price increase lifts mining costs by 3.5%. Constrained shipping through the Strait of Hormuz keeps diesel and process inputs expensive. Custom smelters absorb the squeeze while low-cost extractors expand margins. Company Culture and Cybersecurity Modern mining operations embrace digital transformation and automated extraction technology. Autonomous haulage fleets and remote control rooms define modern company culture at Tier-1 mine sites. Engineers collaborate across international offices to monitor real-time pit operations and processing run rates. However, heavy reliance on connected internet-of-things sensors elevates severe industrial cybersecurity risks. Cybercriminals increasingly target critical infrastructure, automated conveyor systems, and remote refining controls. Mining leaders prioritize hardware-level cybersecurity encryption to safeguard physical operations and international supply chains. Patent Analysis and Future Outlook A detailed patent analysis highlights extensive corporate innovation in hydrometallurgy and solvent extraction. Leading miners hold valuable patents in heap leaching technologies and low-grade ore processing. Advanced processing patents enable extractors to recover valuable metal from previously unusable tailings. These proprietary chemical processes protect operating margins as natural ore grades decline globally. Will current copper futures records push industrial consumers past their financial breaking point? While the tariff premium may unwind, fundamental supply constraints ensure high long-term price floors. Copper remains the irreplaceable backbone of global electrification.

TITradingView Ideas15 Sept