Japan’s economy printed its first quarterly contraction in six quarters, shrinking 0.4% q/q (–1.8% annualized) in Q3. Meanwhile, China’s property crisis lingers, consumer spending remains weak and a 25% drop in shipments to the US is difficult to replace in the short run. European growth continues to limp along — military-spending boosts don’t yet show up in headline GDP, and even Switzerland is not immune. The Swiss GDP contracted 0.5% in Q3 — and believe it or not - state workers are striking in Vaud and Geneva today!

The good news is, all of the economic angst doesn’t automatically translate into poor investor sentiment. Markets run on different vibes — and slowing fundamentals don’t always spook risk appetite.

The bad news is that some of the more bullish vibes — AI enthusiasm, massive government stimulus, dovish central-bank expectations — are starting to fade.

First, appetite for AI is under pressure from circularity worries and bubble fears. The US Nasdaq recently closed below its 50-day moving average (for the first time since late April), and Chinese and South Korean AI-tech players are also seeing outflows. This is happening even though South Korea’s giants (Samsung, SK, Hyundai, LG) have promised around $550 bn in investment over the next five years in AI, chips, energy, and biotech.

Second, the dovish Federal Reserve (Fed) expectations have been crumbling on realization that the Fed may not cut rates come December. Then there’s the Fed. Dovish expectations are crumbling. The market is increasingly doubting a rate cut in December — futures suggest a cut is less likely than once hoped, and even positive political news (like Trump reducing tariffs on beef, tomatoes, and bananas) may not be enough to give the Fed the green light.

Finally, Japan just rolled out a $110 billion stimulus package under PM Takaichi — targeting growth through tax cuts, direct aid, and investments in AI, chips, defense, and shipbuilding. Normally, that kind of stimulus would ignite a sugar rush for markets. But instead of rallying, the Nikkei barely flinched. The focus has shifted to bond yields: the 30-year Japanese yield spiked above 3.30%, making the spending expensive. In FX markets, USD/JPY has returned above 155, with potential pressure toward 160 even amid the threat of intervention.

So now, all eyes are on Nvidia. When it reports its Q3 results tomorrow after the bell, analysts expect another stellar quarter: revenue of ~ $54 bn (implying ~50–60% YoY growth) and a gross margin guidance near 73.3%. But even with a blowout quarter, there’s no guarantee that bulls come rushing back — especially after the news that big names like SoftBank and Peter Thiel are already scaling back their exposure.

From here, for the rest of the OpenAI-linked players in the market, careful stock-picking might be the game. Debt-heavy growers (I’m looking at you, Oracle) are falling out of favour, while big, cash-rich companies like Google may fare better. Oracle’s collapse since its September highs — and even its 30-year bonds taking a beating — is a clear warning. Google, in contrast, has extended gains in that same period. But what “doing better” will mean in a tougher AI-investment environment is yet to be seen.

Nasdaq futures are leading losses again this morning — a pretty good signal that today’s session may not offer relief. Crude oil is stuck around $60pb, with top sellers showing no urgency to let the bulls run, while gold offers no relief; rare are the bulls willing to buy above the $4000 now that the momentum has weakened.

So let’s pray that Nvidia gets something extraordinary out of its hat on Wednesday.