Nikkei May Consolidate Amid Lingering Worry Over AI Boom — Market Talk
1940 ET - Japanese stocks may consolidate amid lingering worry over the artificial-intelligence boom. Investors remain concerned over whether AI-related companies can generate sufficient profits to meet rising credit obligations amid still-elevated yields. Nikkei futures opened 30 points lower at 64855 on the SGX. The dollar is at 158.58 yen versus Y158.10 around Monday's Tokyo market close. The Nikkei Stock Average closed 0.6% lower at 64916.70 on Monday. ([email protected])1410 ET - Gold futures settle lower as the U.S. dollar firms, yields rise and oil prices pare early losses. "The relationship between energy prices, inflation expectations, and Federal Reserve policy remains central to gold's near-term direction," Naeem Aslam of Zaye Capital Markets says in a note. Lower oil prices could favor bullion by easing inflationary pressure and expectations for tighter monetary policy, he says. But persistent geopolitical tension and high energy costs could mean interest rates remain restrictive for longer. "This would increase the opportunity cost of holding non-interest-bearing assets such as gold." Front month gold falls 0.5% in New York to $4,139 a troy ounce. Silver loses a couple of cents to $56.974 a troy ounce. ([email protected])1311 ET - There remains no clear-cut reason for the Bank of Canada to move interest rates in either direction, reckons Chartered Professional Accountants of Canada's chief economist. David-Alexandre Brassard says without clarity regarding the war in Iran or the trade conflict between Canada and the U.S., it remains unclear which risk will win out. Higher oil prices and ongoing geopolitical tensions continue to pose upside risk to inflation, while weaker consumer demand, slowing wage growth and recent labor market weakness are working in the opposite direction by helping contain broader price pressures, he says. ([email protected]; @RobbMStewart)1307 ET - The latest Canadian inflation data suggest limited spillover from higher energy prices into broader inflation, which should keep the Bank of Canada on hold through 2026 despite recent hawkish comments from Gov. Tiff Macklem, argues Nomura's Ruchir Sharma. Headline CPI inflation rose to 3.1% on-year in September from 3%, but excluding gasoline slowed to 2.2% from 2.4%. Sharma notes shelter inflation edged higher due to utility and insurance costs, while rent inflation remained subdued. Core services inflation moderated, and Sharma says weak labor markets and easing wage growth should mean wage-sensitive core inflation will cool. ([email protected]; @RobbMStewart)1257 ET - Sales of existing single-family homes fell in September to a seasonally adjusted 260,410, down 3.4% from August and 6.5% lower than in September of last year, the California Association of Realtors said. The median home price in September fell from the prior month, to $899,720, from $901,420 in August. However, the median home price was up 1.7% from the $884,390 price recorded in September 2025, the Association said. Statewide sales were below the 300,000-unit benchmark for the 48th consecutive month, underscoring struggles to build sustainable momentum, the Association added. ([email protected])1253 ET - Tokenized gold, or trading of gold using blockchain systems, is growing quickly, says the World Gold Council in a note. But it's still only a sliver of the $13 trillion market capitalization of the physical gold market worldwide, says the WGC. "Tokenised gold generated $90 billion of cumulative spot trading volumes in the first quarter of 2026, more than in the whole of 2025," says the WGC. The agency says that there's ample room for the tokenized commodity to grow, unlocking roughly $700B in what the WGC calls 'latent demand.' This demand would come from users of crypto platforms that don't currently have exposure to gold, says the agency. Most-active gold futures are down 0.5% to $4,162 per troy ounce at midday. ([email protected])1201 ET - Volatility in the bitcoin market is expected to remain elevated through November from a combination of the U.S. midterm elections and the approaching corporate earnings season, ZX Squared Capital's CK Zheng says in a note. That turbulence could create a final attractive entry point for long-term bitcoin investors before the next bull market takes hold, he says. Zheng maintains a $150,000 price target for bitcoin in 2027, which may look lofty but would be relatively modest compared with the cryptocurrency's historical performance during previous recovery cycle, he says. ([email protected])1152 ET - Coinbase is set to showcase how its diversification efforts are accelerating when it reports 3Q results next week, StoneX analyst Mark Palmer says in a note. Investors will likely — and wrongly — still be looking to see how much retail traders paid the exchange to trade crypto this past quarter, Palmer says. But the company has rebuilt its revenue base around derivatives, stablecoins, lending, payments and software agents that transact on their own, he says. The market has yet to price in the fact that Coinbase is becoming a full-fledged financial account for both people and the AI agents that are acting on their behalf, the analyst says. ([email protected])1137 ET - The Federal Reserve looks due to leave the federal funds rate unchanged in October and then issue quarter-point hikes in December and January, UBS analysts say in a research note. Things could certainly change between now and the FOMC meeting next week, but the meeting's proximity to the midterm elections bodes against a speedy hike, the analysts say. Inflation also isn't rising, its simply not coming down quickly enough, they say. Chairman Warsh appears to be leaning toward a sequence of three hikes total though, including the one in September hike, which would leave open December and January's FOMC meetings, the analysts say. After that, there will likely be a prolonged pause, they say. ([email protected])1119 ET - Major cryptocurrencies are mostly higher, reversing from losses seen last week. The S&P 500 is up 0.8%, in turn giving cryptocurrencies support to rebound from its recent weakness. "Renewed buying has helped stabilize market sentiment, but the foundations of the recovery remain fragile as interest rate pressures persist and investment flows have yet to improve meaningfully," says Linh Tran of XS.com in a note. Lacking spot buying weighs on the crypto complex, but data from Coinglass shows that volumes being traded are significantly higher in the past 24 hours - with bitcoin volume at $53.9 billion, up 57% in the past 24 hours. Bitcoin rises 1.6% to $82,186, ethereum up 2.4% to $2,405, and XRP up 3.2% to $1.30. ([email protected])1115 ET - Mortgage rates will likely settle around 7% through the fourth quarter thanks to a mix of higher oil prices and weakness in the stock market, loanDepot's Jeff DerGurahian says in a note. That weakness on the equities side, particularly for tech stocks, is bringing buyers back into the bond market, the economist says. But at the same time, high oil prices are fueling inflation concerns that could force the Federal Reserve to raise rates at least once this year, he says. Until one side takes control, rates are stuck, DerGurahian says. ([email protected])1105 ET - A new hard-fork of bitcoin called eCash is expected to go live by the end of the month, providing new features and modernizing a blockchain that has seen only sporadic changes since its inception nearly 20 years ago. In a note, analysts with CoinDesk say that eCash (ECX) will activate seven new sidechains for users that opt in. "eCash brings an app platform to Bitcoin, with seven sidechains going live at mainnet launch, from payments and privacy to prediction markets, identity and tokens," says CoinDesk. The fork will take place at block 973,728, says CoinDesk, crediting users with eCash tokens on a 1:1 basis with whatever bitcoin they hold. Bitcoin is up 1.2% to $81,878. ([email protected])