Week Ending 03/10/2025 - Boom, Baby Boom! Why AI Can Be World Changing And A Financial Bubble. The Market Call podcast

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Week Ending 03/10/2025 - Boom, baby boom! Why AI can be world changing and a financial bubble.

2d ago 14:54

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After a short break, Gareth and Jeremy discuss the current state of markets as we head into Q4 of 2025. Jeremy suggests that the US recession has been cancelled, and while the music is playing, equity investors feel compelled to dance.

Over Q3, the $ has stabilised and the £ has weakened. The US is "boom baby boom", while the UK is flatlining with no economic growth and a long wait for the Budget on November 26th.

The primary driver of growth in the US is a vast circular investment pattern in AI data centres. With increasing political pressure, the Fed is being compelled to initiate a rate-cutting cycle. However, AI might be a world-changing technological revolution, but as the dot-com bubble showed us, it can also be a financial bubble.

In a week that Open-AI was valued at $500bn Gareth talks about the similarities to the early 2000s.

To complete the bearish take, there are also some early signs of stress in the US credit sector, which some compare to the early stages of the GFC.

Gareth covers updates from some UK companies, including Pharos Energy, Watkin Jones, and Xaar, that continue to show resilient performance.

Finally, there are signs of life in the IPO market as Beauty Tech begins life as a new £300m market cap company, which might be the first of several new issues on their way to the London market in the coming months.

Looking forward, the US government shutdown has put the production of economic data in doubt, with the inflation numbers for October 15th also in question.

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