Duttenhoefer´s Daily Aug 12

S&P -32bps @7728 (+13% ytd) on low volumes; AI stocks and Semis a bit higher on Nvidia´s $500bn financing partnerships; CoreWeave +15% post market positive for sentiment; KOSPI +4% led by Samsung/SkHynix up 4-5%; rates unchanged with US 10yr at 4.68%; Brent back at $90; Gold $4400 and Bitcoin <$64k; US and Houthis reported separate attacks on shipping; US CPI in focus today.

circular financing: FT has a long piece exploring a $200bn financing structure that Google put together for Anthropic to use TPUs; Google designs them, and provides a guarantee, Broadcom sells them to an SPV that leases them to Anthropic while providing another guarantee, and the SPV itself pays for the hardware with debt from Apollo and Blackstone. Link

Google: Gemini surpassed 1bn users; it was the 14th Google product to hit the 1bn mark; 63% of Gemini users talking directly to the assistant using the voice feature; Gemini now generates >150m images daily; has >100m active users on iOS. Link

interesting read on AI coding costs: Databricks published a few thoughts on agentic coding and how to reduce costs; moving to open source and lower cost models; dynamic request and task routing; giving developers visibility, tripwires, and budgets. Link

US macro: our economist have looked at AI investments and their impact on US GDP and crowding out effects; the analysis suggests that both AI’s contribution to US GDP growth and its crowding out effects are smaller than often thought. We estimate that the direct effects of AI investment will boost measured GDP growth by just 0.1% in 2026. Link

prefer equity to credit: we continue to prefer equity to credit in our asset allocation in 2H26; despite high all-in yields, credit spreads and term premia remain low, creating less incentive to move up the risk curve; late cycle restructuring and releveraging tend to support equity relative to credit; while AI capex is supporting positive earnings growth and revisions boosting equities, additional debt issuance puts upward pressure on credit spreads. Link

Nvidia preview: reports 2Q earnings on 26th Aug; we expect a solid quarter with meaningful upside to guidance supported by tight GPU supply/demand trends, but think the bar for the stock is elevated given its +12% move in two weeks; details here: Link

Stat of the Day: our volatility panic Index has collapsed from 7.9 in late July to below 1, its lowest level since June 2024; in less than 2 weeks, the market has moved from elevated anxiety to effectively no panic at all. Link

European Equities: good update looking at common misconceptions about European Equities; 1H26 EPS growth is tracking +14%yoy (strongest pace in 3yrs); ROE has improved markedly as margins and buybacks have risen; European Banks (SX7P) have considerably outperformed the Magnificent 7 since 2022; China competition is a huge negative but Autos are just 1% of Europe market cap (but 9% of sales); European equities are seeing the best inflows in 10-years ex 2021. Link

EV charging: China’s newest EVs have the ability to fill its battery up to 80% in a few minutes; several interesting announcements from BYD, Geely and CATL. Link

Chart of the Day: AI-related financing has grown to nearly 25% of gross IG issuance. Link

Source: Goldman Sachs; past performance is no indicator for future performance.